Lithium business Galaxy Resources Limited [ASX:GXY] has seen their shares grow by 13.04% this morning.
Due to Galaxy securing a multimillion dollar sale to POSCO, a Korean company, their shares were able to gain altitude.
The Perth-based company stated it will be selling the northern part of its Salar del Hombre Muerto tenements in Argentina to POSCO.
The 40-year mine life project has been progressing well, producing a vast amount of battery grade lithium.
Galaxy has been reserving the resources within the southern part of its project.
How the transaction affects Galaxy
POSCO, a South Korean metals company, has agreed to enter a cooperation agreement to maximize potential development and infrastructure with its respective projects.
This means that not only has Galaxy made a great sale, they have gained a potential business partner as they can both work with each other to ensure strengthened results.
Galaxy reported on its ASX update that chairman Martin Rowley stated:
‘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.’
Galaxy will be able to operate with a lot more flexibility and a more formal process which can be furthered by working alongside POSCO and developing its portfolio in the process.
Now, Galaxy can work a lot closer with POSCO on their projects which can benefit both.
Two new lithium projects will be developed that will benefit all of their stakeholders within the region.
For Money Morning
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