Galaxy Resources Limited announced that it has entered into a non-binding agreement with POSCO to sell a package of tenements located on the northern area of the Salar del Hombre Muerto in Argentina, for cash consideration of US$280 million. The tenement package is situated to the north of Galaxy’s world class Sal de Vida Project (“Sal de Vida” or the “Project”) in Argentina.
Galaxy retains 100% of the tenements in the southern area of Salar del Hombre Muerto in the Catamarca Province included in the recently announced updated feasibility study for the development of Sal de Vida. The southern tenements contain an estimated 4.09million tonnes LCE of JORC compliant measured and indicated resource and 100% of the current 1.14 million tonnes LCE of JORC compliant reserves.
The proceeds from the transaction with POSCO will be available to progress the development of Sal de Vida in the Catamarca Province and places Galaxy in a strong financial position to continue the planned development of the Project.
The non-binding agreement is conditional on completion and execution of definitive documentation and receipt of POSCO Board approval which are expected to be satisfied during the third quarter of 2018. Galaxy will continue to keep the market informed as the conditions are satisfied.
Galaxy and POSCO will also enter into cooperation agreements intended to maximize potential development, operational, infrastructure and logistical synergies for their respective projects.
Chairman of Galaxy, Martin Rowley commented that “this transaction with POSCO provides a substantial cash injection which underpins the development of Galaxy’s Sal de Vida brine project in the Catamarca Province of Argentina. The development of Sal de Vida by Galaxy, as a 40-year mine life project producing the equivalent of 25ktpa of battery grade lithium carbonate, will be based on the 100% retained reserves and will not include any of the estimated resource contained in the tenements being sold to POSCO. This transaction allows Galaxy maximum flexibility with the parallel formal process being conducted with JP Morgan. We look forward to working closely with POSCO on our projects for long term mutual benefit. With the geographical coverage of Galaxy and POSCO’s tenements spanning across both Catamarca and Salta Provinces, this transaction is also strategically significant as it means there will now be two new lithium projects developed concurrently on the Salar del Hombre Muerto, with obvious benefits for all stakeholders in the region”
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