The memorandum of understanding document for the strategic partnership was set to expire June 30, but has now been extended until August 31st. POSCO, with operations in energy, chemicals and materials, is one of the largest steel manufacturers in the world, with $56 billion in annual revenues.
The South Korean company invests in several resource development projects globally, especially with regards to lithium projects.
Indeed, the agreement between Li3 and POSCO was to jointly explore and evaluate the development of Li3's Maricunga lithium project in Chile, including the establishment of a commercial plant.
This is because one of the primary uses for lithium is in the production of batteries for hybrid and electic vehicles. As demand for these cars increase, so will the world's requirements for lithium, resulting in many battery and automakers in Korea and Japan partnering with lithium exploration companies to ensure a steady supply.
"After concluding a week in Korea with POSCO's senior management team, advisors and legal counsel, I am extremely pleased that both companies have expressed a desire to continue working towards a mutually beneficial transaction," said Li3 CEO, Luis Saenz.
"Our objective is to align the companies in a manner that provides Li3 with capital, while minimizing dilution and still providing POSCO with a range of possible involvements including both financial and technological exchanges.
"Li3 is very proud to be considered as a potential strategic partner in lithium and other minerals and we look forward to exploring financial, technical and commercial opportunities with a global strategic partner of this magnitude".
Li3 has a controlling interest in the Maricunga property, which has been independently ranked as one of the top eleven lithium projects in the world, with the potential to become the largest lithium-based salar in brine-bearing deposits.
A report by SignumBOX concluded securing a multi-national strategic off-take partner was one of the missing elements that could elevate the project even further, said the company.
Li3, which looks for lithium properties in Peru, Argentina and Chile, has begun the initial $3.8 million development work program on the project, placing Maricunga into feasibility stage. A preliminary economic assessment report is anticipated by the end of the fourth quarter.
Maricunga covers an area of approximately 1,438 hectares, comprising six concessions, and is located in the northeast section of the Salar de Maricunga in Region III of Atacama.