Argosy said it had executed binding investment and off-take agreements involving “fast-growing” Chinese battery company Qingdao Qianyun High-tech New Material Co, with A$26.4 million to be received upfront through an equity placement and prepayment under a one-year preliminary off-take agreement.

The payment is said to exceed the budgeted development expenditure budget for the second stage of Argosy’s Rincon lithium project in Argentina, and according to the ASX company, the “cornerstone shareholding at a premium combined with long-term off-take validates Argosy’s strategy to develop Rincon into a commercial lithium project”.

The equities market agreed marking the stock up more than 53% in early trade.

Quindao is also involved with ASX company Mineral Resources, from which it has purchased DSO spodumene out of the Pilbara region of Western Australia.

Argosy’s plans at Rincom have involved a first stage development producing 100-150 tonnes per annum of lithium carbonate, followed by a second stage increase to 1000-1500tpa.

A further increase to “full commercial lithium carbonate” production is anticipated, with a decision on that planned for the first quarter of 2019.

A full scale development could cost in the order of US$130 million and produce 10,000tpa of lithium carbonate.

Quindao will have a 19.9% stake in Argosy after investing A$16.9 million for shares priced at 8.5c.

Shares in Argosy were up 35% to 10.5c in morning trade, capitalising the company at $62 million.