POSCO offers $62M cash for Lithium South assets in Argentina

[Ben Graham]

Drilling at Alba Sabrina claim block. Credit: Lithium South Development

Lithium South Development (TSXV: LIS) says it has received a $62 million cash offer from South Korea’s POSCO for its portfolio of exploration assets in Argentina’s Hombre Muerto salar.

The offer, which was presented last week, is non-binding and subject to several conditions, including a 60-day due diligence period, followed by a 60-day period for the negotiation and execution of the definitive agreement, Lithium South said in a news release Wednesday.

The company’s main asset is the 100%-owned Hombre Muerto North (HMN) project in Salta province, comprising nine mining concessions covering a combined area of 56.9 sq. km. It also holds the purchase rights to two additional claim blocks totalling 55.5 sq. km nearby.

Vancouver-based Lithium South and POSCO are currently partners on the HMN project, having established a 50/50 brine sharing agreement on two of the claim blocks (Viamonte and Norma Edith) that cross over into the Catamarca province, with POSCO assigned to the areas in that province.

The South Korean giant is also developing the Sal de Oro lithium project in the Hombre Muerto salar next to HMN, with plans to build a $4 billion plant to anchor its operation. Meanwhile, the newly merged Arcadium Lithium is developing the west and east portions of the salar.

A new preliminary economic assessment (PEA) for HMN last year gave the project an after-tax net present value (at 8% discount) of $934 million with an internal rate of return of 31.6%, along with a 25-year mine life and a 2.5-year payback period.

The lithium carbonate production rate is estimated at 15,600 tonnes per year, based on proven solar evaporation technology and a resource base of 1.58 million tonnes in lithium carbonate equivalent (LCE) delineated from three of the mining concessions (Alba Sabrina, Natalia Maria and Tramo).

Since the PEA release, Lithium South has been looking to further explore the HMN property with the aim of expanding this resource and producing a feasibility study. Just last week, the company said it plans to make a comprehensive development schedule covering every stage of the feasibility process, through construction and commissioning, to deliver the report as early as the first quarter of 2026.

Shares of Lithium South surged by 28% on the project sale announcement, sending the company’s market capitalization to C$35.3 million.