Galaxy Resources’ Share Price Shoots Upwards

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.


Ryan Clarkson-Ledward,
For Money Morning

PS: Free Report: Galaxy is apart of the mining boom that has taken the exchange by storm. To learn more, download your free report ‘The Top 10 Australian Mining Stocks’ today.

Ryan Clarkson-Ledward is an Editor at Money Morning.

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