PERTH (miningweekly.com) – ASX-listed Galaxy Lithium on Tuesday confirmed a binding agreement with Korean major Posco for the $280-million sale of a package of tenements located on the northern portion of Sal de Vida project, in Argentina.

The two companies in May this year announced the transaction over the northern tenement package, which hosts an estimated 4.09-million tonnes of lithium carbonate equivalent resource, and 1.14-million tonnes of reserves.

Galaxy told shareholders on Wednesday that it would retain full interest in the tenements on the southern area of the Salar de Hombre Muerto, which are included in the updated feasibility study for the Sal de Vida project.

The proceeds from the transaction would be used to advance the development of the Sal de Vida project, with the transaction expected to settle in the fourth quarter of this year, subject to the completion of the relevant tenement transfer and the registration procedures in Argentina.

“The transaction with Posco underlines the significant previously unrecognised value of Galaxy’s tenements on the Salar de Hombre Muerto and provides a substantial cash injection which underwrites the development of the Sal de Vida lithium brine project,” said Galaxy chairperson Martin Rowley on Tuesday.

“This transaction provides Galaxy maximum flexibility for the parallel process being led by JP Morgan, to evaluate and consider options for strategic partners for the development of Sal de Vida.”

A May feasibility study estimated that the Sal de Vida project would require a capital investment of $474-million, to produce 25 000 t/y of battery-grade lithium carbonate and 95 000 t/y of potash over a 40-year mine life.

Rowley said that the transaction with Posco was also economically significant, as it meant that there were well advanced plans for two lithium projects to be developed concurrently on the Salar del Hombre Muerto spanning across both the Catamarca and Salta provinces, which carried obvious benefits for all stakeholders in both regions in Argentina.

Posco on Monday revealed that it would build a lithium plant in Argentina, with plans to produce 25 000 t/y for a 20-year period, starting in 2021.