Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) has entered into a farm-in agreement with Mantis Resources to earn into two lithium-prospective tenements near its Lake Johnston Project in Western Australia.
The Mantis tenements include outcropping lithium-bearing pegmatites with historical composite sampling returning high grades from 2.80% up to 3.85% lithium.
Notably, subject to satisfying certain conditions, Poseidon can earn-in up to a 100% ownership interest in the tenements.
Furthermore, Mantis tenements will now be included in Poseidon’s current review of the lithium potential at Lake Johnston.
In other news, Poseidon has signed an agreement with Mt Morgans WA Mining, a subsidiary of Genesis Minerals (ASX:GMD), to undertake trial processing of up to 100,000 tonnes of Lancefield gold tailings through their Laverton processing facility and to have access to 2.5GL per annum of water from the South Windarra pit.
“Strategic step forward”
Poseidon CEO Craig Jones said: “As we enhance our understanding of the lithium potential in the district, the farm-in agreement with Mantis is a strategic step forward to build the value of our lithium portfolio at Lake Johnston.
“The limited historical exploration work completed to date within the Mantis tenements for lithium has already identified outcropping lithium-bearing pegmatites.
“With the recent increase in lithium-focused exploration activity in the region, it is opportune timing for Poseidon to farm-in to these highly prospective tenements.
“The strategic value of the minerals processing infrastructure located at Lake Johnston is becoming more valuable given the heightened levels of exploration for lithium by numerous companies in close proximity to our Lake Johnston 1.5 million tonnes per annum process plant.
“Our first phase of work on the Mantis tenements will be to expand upon and validate the historical lithium results with low-cost soil and grab samples as soon as we have access to the ground, and in parallel continue with the exciting lithium work programs over our 100% owned tenements at Lake Johnson.”
Location of farm-in tenements (E63/2244 and E63/2256) in proximity to Lake Johnston project
Lake Johnston lithium review
Poseidon has kicked off a review of the lithium potential at Lake Johnston.
The Mantis tenements will be included in the review with the first phase of exploration being a groundwork soil sampling program of the outcropping pegmatites.
This will expand on and validate the historical results overseen by lithium expert consultants engaged by Poseidon.
Lancefield gold tailing trail
Prior to kicking off the Lancefield gold tailings trial, parties are to enter into a profit share agreement, with costs being borne solely by Mt Morgans if there is nil profit.
The agreement does not impact Poseidon’s rights to the remainder of the Lancefield gold tailings or the Windarra gold and nickel tailings for which the company continues to receive inbound interest
Jones said: “This is a great result for both Poseidon and Mt Morgans as we look to monetise our non-core assets and Mt Morgans progress with the restart of their operations at Laverton with a secure water supply and the opportunity to process the Lancefield gold tailings.
“The supply of water from South Windarra will not affect our development plans for the tailings recovery project at Windarra and allows for discussions to continue with third parties to advance various opportunities.
“The cost of the trial will be borne by Mt Morgans and any profit generated will be shared on an agreed basis, if successful.”
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