Kidman Resources Limited announced that the first round of metallurgical testwork at its world-class Earl Grey lithium deposit in WA has yielded positive results that continue to demonstrate potential for Earl Grey to be developed in the near-term to produce a high quality spodumene concentrate for export markets. Metallurgical testwork was undertaken on samples from two holes (KEGR031 and KEGR033) at the shallower, southern end of the Earl Grey resource which is anticipated to be mined first. Lithium oxide recoveries of up to 89.5% were recorded, highlighting the excellent potential to produce a highly sought-after lithium oxide concentrate. The tests also suggest that most of the Earl Grey lithium is hosted in spodumene which typically produces a higher-grade concentrate. Furthermore, abundant coarse spodumene grains were observed increasing the likelihood that lithium minerals can be easily liberated from the waste minerals which in turn improves the economics of increasing the concentrate grade and overall recovery rates. Kidman announced in November last year that it had secured an exclusive right, via an option until August 2017, to use Poseidon Nickel's nearby Lake Johnston processing plant to treat ore from Earl Grey (see ASX release dated November 16, 2016). The company's preliminary studies indicate that the required Lake Johnston plant and tailings storage facility modifications would be capable of production in the order of 200,000-300,000 tonnes of spodumene concentrate per year grading approximately 6% Li2O.