Lithium South Announces Signing of Acceptance Letter for Share Purchase Agreement with POSCO Argentina S.A.U.
Lithium South Sets C$0.505 Payout in $65 Million POSCO Asset Sale, Turning Explorer Into Arbitrage Play
On December 8, 2025, Lithium South Development Corporation announced it has signed an acceptance letter for a definitive Share Purchase Agreement (SPA) with POSCO Argentina S.A.U. Under the agreement, Lithium South will sell its wholly-owned subsidiary, NRG Metals Argentina S.A., which holds the Hombre Muerto North Lithium Project, for US$65 million in cash.
Following the completion of the sale, the company intends to redeem all of its issued and outstanding common shares for an estimated price of CAD$0.505 per share. The company will then apply to delist from the TSX Venture Exchange and commence its dissolution.
The transaction is subject to several conditions, including approval by Lithium South shareholders, the court, and the TSX Venture Exchange. A special meeting of shareholders to vote on the transaction is scheduled for February 19, 2026, with a record date of January 5, 2026. The deal is anticipated to close on or about March 1, 2026.
This news is a definitive and game-changing event for Lithium South. It represents the culmination of a strategic process that began with a Letter of Intent (LOI) announced on July 30, 2025. The investment thesis has now completely shifted from a long-term, high-risk mineral exploration venture to a short-term, special situation arbitrage play.
A chronological review of the deal's progression shows a positive outcome for shareholders: - July 30, 2025: An LOI was signed with POSCO for a sale price of "up to US$62 million." - September - November 2025: The company provided updates on the successful completion of due diligence and internal approvals from POSCO. - November 20, 2025: A brief extension to the agreement deadline was announced, which could have been a point of concern, but was quickly resolved. - December 8, 2025: The definitive agreement is announced at US$65 million, an increase of US$3 million from the initial LOI price.
The proposed redemption price of CAD$0.505 per share represents a 14.8% premium to the last closing price of $0.44 (December 5, 2025). This spread reflects the time value of money until the expected closing in March 2026 and, more importantly, the inherent risks that the transaction may not be completed.
For existing shareholders, this provides a clear and relatively near-term liquidity event at a valuation that the market had not fully ascribed to the company prior to the initial LOI. The key risk has transitioned from exploration and development uncertainty to transaction execution risk.
Lithium South Development Corporation is a junior mineral exploration company focused on its 100%-owned Hombre Muerto North (HMN) Lithium Project in Salta Province, Argentina. The project is strategically located in the prolific "Lithium Triangle," adjacent to major lithium operations run by POSCO and Rio Tinto. The HMN project has an established NI 43-101 compliant resource and a Preliminary Economic Assessment (PEA) dated April 30, 2024. The project is subject to a 3% Net Production Royalty. With the announced sale, the company is effectively liquidating its only significant asset.