Lithium South Development Corporation has signed a non-binding letter of intent (LoI) with POSCO Argentina to sell its Hombre Muerto North Lithium (HMN Li) Project and associated concessions in Salta, Argentina.

POSCO has offered $62m (Won86.33m) in cash for the Lithium South assets.

The HMN Li Project, along with the Sophia 1, 2 and 3 concessions and the Hydra X and Hydra XI concessions, are collectively referred to as the Project.

POSCO Argentina is the Argentine subsidiary of POSCO Holdings and the sole owner and operator of the nearby Sal de Oro lithium project. The offer is free from any finder's fee.

The deal is contingent upon regulatory and government approvals, as well as the endorsement of Lithium South's shareholders at a forthcoming meeting.

There is no certainty that the conditions outlined in the LoI will be met or that the proposed transaction will be finalised. Lithium South has stated that it will not provide further comments on the LoI until it is deemed necessary or appropriate.

Canaccord Genuity is the financial advisor to Lithium South for this potential transaction.

Last week, Lithium South appointed Claudio C. Zalewski as director of development and construction for the project.

The company is looking to launch the feasibility study for the project before the end of the third quarter of 2025 (Q3 2025) and to deliver the full feasibility by late in Q1 2026.

The company has completed drilling across 75% of the project area, which encompasses the Alba Sabrina, Natalia Maria and Tramo claim blocks.

The exploration has resulted in the identification of a lithium carbonate equivalent resource of 1.58 million tonnes, with 90% classified in the Measured category, indicating the highest level of resource confidence, stated the company.