Perth, Jan 14, 2009 AEST (ABN Newswire) - Emerging lithium producer, Galaxy Resources Limited (ASX:GXY) announced this week the final results of a Definitive Feasibility Study (DFS) for its Mt Cattlin Lithium Tantalum project. In view of the positive outcome of the DFS, the Board of Galaxy Resources Limited ("Galaxy") has now resolved to proceed with the development of the lithium project.
Managing Director, Iggy Tan said that the Company will proceed to the "Value Engineering" phase where further optimisation of the project will be undertaken before tender and selection of an EPCM contractor. We have identified further refinements to the project that could potentially reduce both our capital and operating costs. The Company intends to finalise these opportunities before we proceed to the appointment of an EPCM contractor and subsequent "detailed engineering".
The impetus to proceed with development is driven by a desire to take advantage of the anticipated increase in demand for lithium-ion batteries to power electric and hybrid cars. The Company will now proceed to select an off-take partner for the project, said Mr Tan.
Mr Tan said the project is planning to ship spodumene concentrate during Q3 2010. As announced this week with the release of the DFS, the two key factors in the positive results were the favourable characteristics of Galaxy's flat lying pegmatite resource and the attractive economics of processing a simple concentrate for the lithium carbonate producers.
Further to the announcement dated 15 December 2008 in regards to a capital raising, the Company has successfully raised an additional $0.2M over the announced $1.0M amount. Subject to ratification of this issue by shareholders at a general meeting to be called shortly, the Company has finalised another $0.45M raising via a capital book build to sophisticated investors, resulting in a total of $0.65M to help fund the next phase of the project. The book build placement consists of an issue price of 35 cents per share, together with free attaching, unlisted 1 year option exercisable at 35 cents each.
Galaxy will continue discussions with large international commodity marketing groups with respect to partnering, off take arrangements and project financing for the project. Subject to the necessary regulatory approvals Galaxy plans to commence mining and production activities during Q3, 2010.
About Galaxy Resources Limited
Galaxy Resources Limited (ASX:GXY) (OTCMKTS:GALXF) is an international S&P / ASX 200 Index company with lithium production facilities, hard rock mines and brine assets in Australia, Canada and Argentina. It wholly owns and operates the Mt Cattlin mine in Ravensthorpe Western Australia, which is currently producing spodumene and tantalum concentrate, and the James Bay lithium pegmatite project in Quebec, Canada.
Galaxy is advancing plans to develop the Sal de Vida lithium and potash brine project in Argentina situated in the lithium triangle (where Chile, Argentina and Bolivia meet), which is currently the source of 60% of global lithium production. Sal de Vida has excellent potential as a low cost brine-based lithium carbonate production facility.
Lithium compounds are used in the manufacture of ceramics, glass, and consumer electronics and are an essential cathode material for long life lithium-ion batteries used in hybrid and electric vehicles, as well as mass energy storage systems. Galaxy is bullish about the global lithium demand outlook and is aiming to become a major producer of lithium products.
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