(Yicai) March 6 -- China's Ganfeng Lithium will invest up to USD70 million to buy a minority stake in an Argentinian lithium mining firm to expand its overseas lithium resources.

Ganfeng Lithium will purchase no less than 14.8 percent of Proyecto Pastos Grandes' total equity, the Jiangxi province-based company announced yesterday.

PGOC will use the proceeds from the stake sale to promote the development and construction of the lithium salt lake project it owns in the Pastos Grandes Basin in Argentina, which mainly produces battery-grade lithium carbonate as a raw material for the production of lithium battery cathodes, Ganfeng Lithium noted.

The purchase will expand Ganfeng Lithium's lithium resources, advance the integration and development of the lithium salt-lake project the company already owns in Argentina, and ensure demand for lithium resources, the firm added.

Shares of Ganfeng Lithium [SHE: 002460] were trading up 0.4 percent at CNY38.83 (USD5.39) as of lunch break in Shenzhen today. The firm's Hong Kong-listed stock [HKG: 1772] rose 2.6 percent to HKD25.20 (USD3.22) as of 11.50 a.m.

Founded in 2016, PGCO owns the Pastos Grandes lithium salt lake project and the Cauchari East lithium salt lake project in Argentina’s Jujuy province. The Pastos Grandes project's licensed mining and exploration area is about 24,000 hectares, with measured reserves of over 3.4 million tons.

PGCO's total assets were worth USD19.8 million as of the end of last year, with net assets of minus USD50 million and an asset-liability ratio of 352 percent. The firm reported a net loss of USD54.3 million last year.

Editor: Futura Costaglione