ASX-listed Jindalee Lithium subsidiary HiTech Minerals has successfully produced high-grade magnesium oxide from the McDermitt lithium project, in Oregon, ahead of its merger with Constellation Acquisition Corporation - as a special purpose acquisition company for investment firm Antarctica Capital.

Upon completion of the merger, McDermitt will be held by newly formed US lithium development company US Elemental focused on advancing large-scale domestic lithium resources.

US Elemental will be listed on Nasdaq.

Meanwhile, the magnesium production is an important proof of concept in HiTech's magnesium value optimisation programme. The McDermitt project contains a substantial magnesium endowment and prior prefeasibility study (PFS) testwork confirmed that magnesium can be efficiently extracted alongside lithium using sulphuric acid leaching.

The PFS, however, treated magnesium as waste, removing it from the process as magnesium sulphate with no revenue credit applied. This latest work demonstrates a potential route to convert that stream into magnesium oxide - which is an important feedstock for primary magnesium metal production and a range of industrial applications, such as refractories.

HiTech will now undertake further testwork, engineering and commercial assessment to establish product specifications, scalability and commercial viability for magnesium at McDermitt. In turn, Jindalee has commissioned preliminary independent market analysis to help inform its magnesium product strategy and identify potential higher-value pathways for magnesium recovered at McDermitt.

Notably, China currently controls about 90% of global magnesium supply, which means the US supply chain is exposed to substantial concentration and import risk.

"Given McDermitt's substantial magnesium endowment, the ability to produce magnesium oxide from McDermitt-derived magnesium sulphate is strategically encouraging, offering a potential pathway to help derisk the US magnesium metal supply chain," says incoming CEO of US Elemental and Jindalee CEO Ian Rodger.