Galaxy Resources has reached an agreement to offload lithium tenements located in the northern basin of Argentina’s Salar del Hombre Muerto to South Korean steel-making firm POSCO for $280m.

Located to the north of Galaxy’s Sal de Vida project, the tenement package comprises around 1.58 million tonnes lithium carbonate equivalent (LCE) of JORC-compliant measured and indicated resources and 2.54 million tonnes of LCE of JORC-compliant total resources.

Despite the sale, Galaxy will retain the complete ownership of all tenements in the southern basin.

“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 company will use the proceeds from the sale to progress the Sal de Vida project development in Catamarca province.

Galaxy Resources chairman Martin Rowley said: “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.

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“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.”

Based on estimates, the company expects the southern tenements to contain 4.09 million tonnes LCE of JORC-compliant measured and indicated resource, as well as 100% of 1.14 million tonnes LCE of JORC compliant reserves.

Scheduled to be closed in the third quarter of this year, the transaction is subject to completion, the finialisation of documentation and the receipt of Posco board approval.

The companies are also expected to sign cooperation agreements to maximise potential development, operational, infrastructure and logistical improvements for their respective projects.