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Galaxy to sell tenement package at Sal de Vida to POSCO for US$280M

Galaxy Resources Ltd. signed a US$280 million deal to sell a package of tenements on the northern area of the Salar del Hombre Muerto at its Sal de Vida lithium operation in Argentina, to South Korea's POSCO.

The company will retain the tenements in the southern area of Salar del Hombre Muerto, which were included in the recently updated feasibility study at Sal de Vida.

Galaxy plans to use the proceeds to advance development at Sal de Vida, it said May 29.

The nonbinding agreement is subject to the completion and execution of definitive documentation and receipt of POSCO's board approval, expected during the third quarter.

The companies will also ink cooperation agreements intended to maximize potential development, operational, infrastructure and logistical synergies for their respective projects.

Earlier in May, Galaxy confirmed that it tapped JP Morgan Australia Ltd. to "evaluate strategic options" regarding the Sal de Vida project. The Australian reported that certain Chinese companies and POSCO were interested in the asset.

Galaxy noted that the deal would allow the company maximum flexibility, with the parallel formal process being conducted with JP Morgan.