This is absolutely great news for Galaxy Resources.
As we all know, obtaining funding is tough in the lithium sector. You almost can't get any loan from banks and most funding is provided by off takers or private equity firms.
Sal De Vida without this funding from Posco will remain undeveloped for quite a while, especially during this period of correction in the lithium sector. What's the point of holding the assets if the company can't generate any cash out of it. With this deal, Sal de vida can be fully funded without further dilution or taking on anymore debts. The cash generated from future revenue will pay for itself.
In the future, 2 cash generating assets and no debts. What a great prospect.
GXY Price at posting:
$2.77 Sentiment: Buy Disclosure: Held