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August, 2018 3:28 PM



Galaxy Resources jumps on $371m asset sale

Galaxy Resources jumps on $371m asset sale

Galaxy Resources shares are rallying following the sale of some mining assets to Korean steel making giant Posco.

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By AAP 29.05.2018 01:26 PM

Galaxy Resources shares have surged after the lithium miner announced a $US280 million ($A371 million) asset sale deal with Korean giant Posco.

The stock jumped more than 18 per cent to $3.53 on Tuesday morning after the company announced the sale of a package of mining tenements in northern Argentina, and plans to work together with Posco on future projects.

Galaxy is developing the Sal de Vida lithium and potash brine projects in Argentina, situated in the lithium triangle where the country meets with Chile and Bolivia.

The lithium triangle is currently the source of 60 per cent of global lithium production.

Galaxy also has lithium production facilities, hard rock mines and brine assets in Australia and Canada.

Lithium is a key ingredient in many types of batteries, and growth in the lithium mining sector has been fuelled by the rise of the electric vehicles market.

Posco is one of South Korea's biggest companies with operations across steel, engineering, construction, trading and battery materials.

Galaxy chairman Martin Rowley says the disposal of the assets, which are based in the northern basin of the Salar del Hombre Muerto, will provide a "substantial cash injection" to the company.

Mr Rowley also said the transaction is strategically significant because there will now be two new lithium projects developed concurrently on the Salar del Hombre Muerto.

The disposal is subject to Posco board approval, which is expected during the third quarter of 2018.

Galaxy retains 100 per cent of the tenements in the southern area of Salar del Hombre Muerto in the Catamarca Province.

At 1324 AEST, Galaxy shares were up 40 cents, or 13.4 per cent, to $3.39 in a slightly higher Australian stock market.

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