Guess which ASX lithium share is rocketing 16% today

This lithium share is defying the market weakness and shooting higher on Monday…

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Key points

  • Jindalee Resources shares have returned from a trading halt
  • The lithium share is racing higher in morning trade
  • An memorandum of understanding with a Korean giant has boosted it shares

The Jindalee Resources Limited (ASX: JRL) share price is back from its trading halt with a bang.

In early trade, the lithium developer's shares were up as much as 16% to $2.79.

The ASX lithium share has pulled back since then but remains up a solid 8% to $2.60.

Why is this ASX lithium share surging?

Investors have been buying this ASX lithium share on Monday due to the release of a positive update.

According to the release, the company has signed a memorandum of understanding (MOU) with Korean conglomerate POSCO Holdings. It is a major lithium producer and cathode active materials supplier.

Under the terms of the MOU, POSCO and Jindalee have agreed to undertake joint research designed to optimise the flowsheet for processing ore from Jindalee's 100% owned McDermitt Lithium Project in the United States.

Jindalee will provide a large composite sample from McDermitt for testing at POSCO's research facility in Korea. This follows the seemingly successful initial analysis of a smaller sample of ore undertaken by POSCO last year.

The testing of the McDermitt ore will investigate three separate metallurgical processes. It is expected to take approximately six months at a cost of approximately $2 million, which will be funded entirely by POSCO.

After which, if everything goes to plan, POSCO and Jindalee will jointly evaluate the commercialisation of the project following completion of the testwork.

Jindalee's chairman, Justin Mannolini, was very pleased with the news. He said:

I am delighted that Jindalee has been able to sign a MOU with POSCO Holdings, a leading Korean company and lithium producer as well as supplier of cathode active materials to major US auto maker General Motors. This arrangement will allow Jindalee to further examine the potential of the McDermitt Lithium Project in Oregon, a very large and strategically important domestic source of lithium for the US battery industry. We look forward to receiving the results from POSCO's testwork as part of our efforts to accelerate development of McDermitt through 2023.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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