Wedoany.com Report-Aug. 4, Lithium South Development Corporation signed a non-binding Letter of Intent (LoI) with POSCO Argentina S.A.U. for the sale of its Hombre Muerto North Lithium (HMN Li) Project, along with the Sophia 1, 2, and 3 concessions and the Hydra X and Hydra XI concessions under a purchase option. The transaction, valued at up to $62 million in cash, involves no finder’s fee and is conducted at arm’s length.

The transaction is contingent upon regulatory and government approvals, as well as the endorsement of Lithium South’s shareholders.

POSCO Argentina, a wholly owned subsidiary of POSCO Holdings, operates the adjacent Sal de Oro lithium project in the Hombre Muerto Salar. The HMN Li Project, located in Salta and Catamarca Provinces, includes key claim blocks: Alba Sabrina, Natalia Maria, and Tramo, covering 3,287 hectares in Argentina’s lithium triangle. Exploration efforts have confirmed a lithium carbonate equivalent resource of 1.58 million tonnes, with 90% in the Measured category, reflecting high confidence in the resource estimate.

“The proposed transaction with POSCO Argentina represents a significant opportunity for Lithium South to advance its strategic objectives,” said Adrian F. C. Hobkirk, President and Chief Executive Officer of Lithium South. “We are committed to working closely with all stakeholders to ensure a smooth process as we move toward finalizing this agreement.”

The agreement requires regulatory and government approvals, as well as shareholder endorsement at a future meeting. The LoI includes a 60-day due diligence period, followed by a 60-day period for negotiating a definitive agreement, during which Lithium South will not entertain other offers. There is no assurance that the deal will be completed, and Lithium South will provide updates only when necessary.

Canaccord Genuity is advising Lithium South on this transaction. The company recently appointed Claudio C. Zalewski as director of development and construction to support ongoing project efforts. Lithium South plans to initiate a feasibility study for the HMN Li Project before the end of Q3 2025, with completion targeted for late Q1 2026. Drilling has been completed across 75% of the project area, covering the Alba Sabrina, Natalia Maria, and Tramo claim blocks.

The HMN Li Project is strategically positioned near major lithium operations, including a $4 billion development by POSCO and the Sal de Vida project by Arcadium Lithium. This sale aligns with Lithium South’s transition from exploration to development, leveraging Argentina’s favorable investment climate for lithium projects.