Mineral Resources (MinRes) will take over Poseidon Nickel’s Lake Johnston nickel concentrator and tenures in Western Australia and convert it into a lithium hub.
Located approximately 185km southwest of Kalgoorlie, the acquired tenure covers 86km2 with one exploration license and 10 mining leases. MinRes will own the tenure outright, including all mineral rights.
The Lake Johnston nickel concentrator plant has a 1.5-million-tonne-per-year capacity and is capable of being converted to treat lithium ores, including dense media separation fines.
MinRes will pay $1 million on execution of the binding heads of agreement, $6.5 million on completion of the sale and purchase agreement and $7.5 million a year after completion of the transaction.
“This is an exciting opportunity to develop MinRes’ third lithium processing hub in the Goldfields and the first to include flotation capacity to treat fines,” MinRes managing director Chris Ellison said.
“We intend to bring our expertise in spodumene production to Lake Johnston, which has the potential to service projects throughout the world’s most prospective region for lithium.”
Poseidon said the $15 million will support its exploration of high-grade nickel discoveries, continuing with reduced care and maintenance activities at its Black Swan nickel project in WA, as well as pursuing new opportunities.
“The proposed transaction will crystallise value for shareholders through the monetisation of one of our assets and will enable the company to continue with its strategy to progress the exciting exploration targets identified at Windarra, maintain Black Swan as our near-term production asset and progress new opportunities that are complementary to our portfolio,” Poseidon chief executive officer Craig Jones said.
“The proposed Lake Johnston divestment will also reduce our annual expenditure commitments by approximately $1.4 million and remove the rehabilitation provisions for that project from our balance sheet.”
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