Kidman shares rose by as much as 10% this morning on the announcement.

Metallurgical testwork was completed on finer crush sizes to achieve better liberation of the spodumene material, recovering 62% of the lithium by gravity in 17% of the mass at a concentrate grade of 6.5% lithium oxide.

Tests returned grades of up to 7.32% lithium oxide.

Further work will now be conducted on a larger scale to confirm the results and for use in the upcoming feasibility study.

The company said a gravity only process would allow lower operating and capital costs.

Flotation work will also be carried out to look at the recovery of further high-grade concentrates from the middlings fractions of the gravity plant.

Earl Grey, near Southern Cross in Western Australia, has a resource of 128 million tonnes at 1.44% lithium oxide.

Kidman is looking to fast-track the deposit into production.

Kidman shares dropped by 12% in two days after initial met work results were released in January, though managing director Martin Donohue later said the release was misunderstood.

The company has until August to decide whether or not it will exercise an option over Poseidon Nickel’s nearby Lake Johnston plant.

Capital costs to get into production would be just $A8 million, and the company is aiming to deliver first lithium concentrate production by December.

A feasibility study is targeted for completion by mid-year to allow Kidman to make a decision in time.

Kidman shares last traded 5.6% higher at 47c, after peaking at 48.5c earlier this morning.