Once the deal settles, expected before the end of the year, Galaxy will use the cash to help advance its adjacent Sal de Vida (Salt of Life) project in the south of the basin.

 

Salar Del Hombre Muerto (Dead Man's Salt) contains an estimated 1.58 million tonnes lithium carbonate equivalent in measured and indicated resources and 2.54Mt of resources while Sal de Vida contains an estimated 4.09Mt measured and indicated resources and 1.14Mt reserves.

 

The pair will enter into cooperation agreements intended to "maximise potential development, operational, infrastructure and logistical synergies for their respective projects".

 

Galaxy is looking at a 40-year lithium brine operation producing the equivalent of 25,000tpa of battery grade lithium carbonate.

 

A feasibility study was updated in May, and Galaxy is working with JP Morgan to evaluate strategic partners.

 

Galaxy chairman Martin Rowley said the cash injection from POSCO would provide Galaxy maximum flexibility in assessing its options for the development, which would be its second lithium development after the successful start-up of the Mount Cattlin hard rock lithium mine in Western Australia, which is ramping up to 220,000-240,000tpa.

 

The company has almost A$70 million in cash and securities and is debt-free. 

 

Shares in Galaxy rose some 9% in morning trade to $3.02, capitalising the company at $1.23 billion.