Li3 Energy in Memorandum of Understanding with POSCO to Construct Test Facility

Li3 Energy, Inc., (OTCBB:LIEG) entered into a non-binding Memorandum of Understanding with its strategic partner POSCO (NYSE:PKX) to design, build and operate a test facility for the recovery of lithium and other products at POSCO’s sole expense.

As quoted in the press release:

The Memorandum of Understanding was entered into as of Thursday, March 7th, 2012 in Seoul, Korea. The key terms of the non-binding Memorandum of Understanding include:

• POSCO will design, build and operate a test facility for the recovery of lithium and other products at its sole expense;
• Li3 will provide all technical support as necessary;
• Products from the demo plant will not be commercialized and will be for testing purposes only;
• Although it is the parties’ desire that the test facility be built on the Maricunga Project site, the final determination of its location will be based on the needs, timing and permits required to construct the test facility;
• Once testing of the Maricunga Project lithium brine is complete, the technology may be used by POSCO on other Li3 projects;
• The parties will make every reasonable effort to obtain the necessary permits and to advance the plans for the design and building of the test facility in 2012, and effort will be made for the test facility to begin operations in December 2012;
• Upon successful completion of the test facility, evaluating the merits and validation of the technology, the parties may discuss commercialization of the products in detail, including off-take agreements between the parties.

Li3 Energy CEO, Luis Saenz, said:

“Li3 is very pleased with this new phase of our relationship with POSCO. Upon validation, POSCO’s technology could substantially elevate Li3′s competitive advantage against its lithium-mining peers and, shift the paradigm in the production cost curve of the lithium industry. This technology could revolutionize the industry by substantially increasing the lithium recovery and accelerate the production process times, which could significantly improve Li3′s expected return on investment. Moreover, the investment commitment by POSCO and its non-dilutive nature to Li3 is yet another demonstration of our efforts to add value for our shareholders. Li3 looks forward to working together with POSCO and advancing the test facility. In the meantime, we are on target to complete the Phase One Exploration Program to demonstrate achievement of the milestones required, triggering the second, $10 million tranche of the POSCO $18 million investment commitment in Li3.”

Click here to read the Li3 Energy, Inc. (OTCBB:LIEG) press release