The Poseidon Nickel Ltd (ASX: POS) share price has returned from its trading halt and is racing higher on Thursday.
In morning trade, the nickel developer's shares jumped almost 13% to 98 cents.
The Poseidon Nickel share price has since pulled back a touch but remains up 9% to 9.5 cents at the time of writing.
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Why is the Poseidon Nickel share price shooting higher?
Investors have been bidding the Poseidon Nickel share price higher today after the company became the latest (indirect) recipient of a Modern Manufacturing Initiatives (MMI) Grant from the Australian Federal Government.
According to the release, Pure Battery Technologies (PBT), in partnership with Poseidon Nickel, has been granted a $119.6 million MMI grant to advance a proposed battery material refinery hub in Kalgoorlie, Western Australia.
The release explains that the battery material refinery hub is targeting initial production of up to 50,000tpa of precursor Cathode Active Material (pCAM), with potential for further production expansion in time.
"Wonderful news"
Poseidon Nickel's Managing Director and CEO, Peter Harold, was very pleased with the news.
He commented: "This grant is wonderful news for Poseidon and PBT and a major vote of confidence by the Federal Government supporting PBT's plans for the Kalgoorlie pCAM Hub. This project will add significant value to the battery minerals it processes, and Poseidon is well placed to be a major beneficiary given it has the potential to be a significant supplier of feed to PBT's proposed PCAM Hub from our existing 400,000 tonne nickel resource base and nickel concentrators at Black Swan and Lake Johnston."
"Given the nature of the processing route, being direct to pCAM, and the proximal location of the proposed pCAM Hub to our mines, there is an opportunity to enhance the margins on our concentrates," he added.
What now?
At present, PBT and Poseidon Nickel only have a memorandum of understanding (MoU) in place. This means that the two parties will now need to execute a definitive supply agreement to take things forward.
The company explained: "The MoU noted that obligations of the parties were not binding or enforceable unless and until a Definitive Agreement has been entered into. The receipt of the grant is a major milestone for the pCAM Hub project and will be a key driver for the parties to formalise their collaboration through the proposed Definitive Agreement."
