PERTH (miningweekly.com) – Melbourne-based Kidman Resources has slammed Marindi Minerals’ legal proceedings against the company as “opportunistic” and vowed to defend itself.

Marindi earlier this week launched legal action against Kidman in the Supreme Court of Western Australia, claiming that the company had failed to comply with a binding agreement to sell lithium rights to Marindi.

Marindi claimed that the two companies had reached a heads of agreement in April, via email. The alleged agreement would see Marindi acquire the lithium rights to the Mt Holland project, in the Forrestannia lithium belt, subject to Kidman retaining a 2% net smelter return on all pegmatite minerals, and rights to all other minerals within the relevant tenements.

Kidman maintains that no such agreement exists.

The company on Wednesday confirmed that it had received correspondence from legal representatives for Marindi, but had not received a writ of summons or any other documentation relating to any legal proceedings.

Kidman told shareholders that the company was disappointed by the allegations by Marindi, saying that discussions between the two companies had ended in April, without an agreement being reached.

Kidman said that prior to the last few days, Marindi had not alleged any agreement.

Meanwhile, Kidman on Wednesday told shareholders that it had secured exclusive rights to nickel miner Poseidon Nickel’s nearby Lake Johnston processing plant, to treat ore from the Earl Gray lithium deposit, in Western Australia.

Under the agreement, Kidman has an exclusive option to lease the Lake Johnston plant, some 100 km from Earl Gray, for a three-year period. The company will pay Poseidon a nonrefundable deposit of A$500 000 for the option, which expires at the end of August next year.

Should Kidman exercise its option, the company will pay Poseidon the greater of a yearly fee of A$6-million or a processing fee equivalent to A$10 a dry tonne. The lease will run for three years.

Kidman’s preliminary studies have indicated that the required plant and tailing storage facility modifications and commissioning will cost some A$8-million, with the company adding that the Lake Johnston plant was capable of producing between 200 000 t/y and 300 000 t/y of spodumene concentrate.

While operating the Lake Johnston plant, Kidman is hoping to build its own plant at Mt Holland, benefiting from the knowledge and experience gained from Lake Johnston.

The Lake Johnston plant has a capacity of 1.5-million tonnes a year, and includes associated existing infrastructure. Poseidon said on Wednesday that upon the completion of the lease agreement, the company would have a commissioned and operating plant at no cost to itself, and potentially some A$18.5-million in cash.