Metallurgical testwork will now be undertaken to assess the company's graphite as feedstock for an expanded purified spherical graphite (PSG) production facility based in Queensland.

Lithium Energy listed a couple of years back as an offshoot from former Peru iron ore company Strike.

Its mainstay project is lithium brine ground in Argentina called Solaroz near Allkem's Olaroz project.

Drilling is underway at Solaroz.

Lithium Energy had A$8 million cash at the end of the March quarter.

A $15 million placement in the second half of last year was priced at $1 per share.

Shares in Lithium Energy were trading this week at 92c, capitalising the company at $87 million.