Galaxy Resources Limited (ASX:GXY) Signs Partnership Deal with US Li Battery Producer
Perth, July 27, 2011 AEST (ABN Newswire) - Galaxy Resources Ltd (
ASX:GXY) (PINK:GALXF) is pleased to announce it has signed a technology license agreement (the Agreement) with the well established US-based lithium ion battery producer K2 Energy Solutions Inc. (K2 Energy).
Under the Agreement, K2 Energy will provide Galaxy with battery technology expertise, licensing and commercial support for the construction and operation of Galaxy's proposed Jiangsu battery manufacturing plant in China.
Galaxy Resources Managing Director, Iggy Tan, welcomed the prospect of K2 Energy as a technology partner for Galaxy's prospective battery plant.
"Ensuring that we will be able to complete construction and operation of the Jiangsu Lithium Carbonate plant in accordance with our revised timetable is our first priority, nonetheless this license agreement is important preparatory work for our proposed pipeline battery project. It is one of many important milestones that the Galaxy Board has set the Company before it approves the final battery project," said Mr Tan.
"Galaxy will have the unrestricted and unlimited use of specific K2 Energy lithium battery technologies, valuable for the Ebike and other battery markets. Subject to the Galaxy Board approving the Battery project, K2 Energy's superior and proven lithium battery technology coupled with Korean state-of-the-art automated plant equipment, will help Galaxy to leap frog research and development and produce world-class lithium ion batteries."
K2 Energy has a rapidly growing annual turnover, based upon its development of an innovative family of large format batteries and battery systems based upon lithium iron phosphate (LiFePO4 or "LFP") technology. The company possesses key intellectual property for high performance lithium iron phosphate batteries, with some of its technology applications pending patent approvals.
K2 Energy also has significant experience in the pre-operational stage of battery manufacturing, in particular providing technology and licensing support to European Batteries Oy's lithium battery manufacturing facility in Varkaus, Finland.
K2 Energy's CEO, Dr. Johnnie Stoker said that it was a pleasure to be in partnership with a progressive company like Galaxy who has a very strategic ownership of the upstream lithium carbonate process and lithium resource base.
"It is our belief that with our proven technology recipe and the Galaxy's selection of Korean battery processing plant equipment will produce world class lithium batteries for any application," said Dr. Stoker.
About K2 Energy Solutions Inc
K2 Energy is a lithium ion battery producer with an rapidly growing annual turnover. The Company has developed an innovative family of large format batteries and battery systems based upon lithium iron phosphate ("LFP") technology. Since inception in 2006, K2 Energy has successfully built a strong portfolio of core technology and has commercialised a market leading product line. K2 Energy's proprietary battery technology built on an LFP foundation provides increased safety and reliability over traditional lithium ion battery products.
K2 Energy's technology also provides improved weight, power, and cycle life performance versus existing Nickel Metal Hydride ("NiMH") technology to competitively address high performance mobile applications.
K2 Energy's energy and power cells are currently believed to have the highest energy densities of any LFP products on the market and, with its focus on product development and continuous improvement, K2 Energy will continue to lead the LFP market.
The Company has successfully launched a complete line of standardized format 18650 and 26650 lithium ion cylindrical cells for both energy (E) and power (P) applications. K2 Energy currently produces its battery cells and packs in China under its strict processing and quality specifications and has R&D, prototyping and battery pack assembly facilities in Nevada, US. Most of the company's battery packs are sold in the United States of America and Europe.
http://www.k2energysolutions.com
Galaxy's Battery Project Feasibility Study Economics
Galaxy completed a feasibility study for the battery project in Q4, 2010. For the production of 350,000 e-bike batteries per annum, the project is estimated to generate annual revenue of A$68 million and an average pre-tax net cash of A$30 million per annum. The non geared, net present value (NPV) of the project at a discount rate of 10% is estimated at A$187 million, with a project capital cost of around A$134 million. The internal rate of return (IRR) is around 29%.
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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