Quarterly Activities and Cashlow Report - March 2012
Perth, April 30, 2012 AEST (ABN Newswire) - Galaxy Resources Limited (
ASX:GXY) is pleased to provide its Quarterly Activity Report for the quarter ended 31 March 2012.
HIGHLIGHTS
- Merger offer made for Canada's Lithium One Inc
- Merger to Create Significant Global Lithium Company
- Successful A$30 M Placement To Support Merger
- Jiangsu Lithium Carbonate Plant Officially Opened
- Jiangsu Hot Commissioning Progressed (completed subsequent to quarter)
- First Lithium Carbonate Produced at Jiangsu (subsequent to quarter)
- Lithium Hydroxide Expansion Study Commenced
- Mt Cattlin Exceeded Design Output
- Fourth Spodumene Shipment Due in Mid May 2012
CORPORATE DIVISION
Proposed Merger with Lithium One
The Company announced that it had entered into an agreement to effect a merger ("Proposed Merger") of Galaxy and Canadian lithium and potash exploration and development company Lithium One Inc. (CVE:LI). Lithium One owns the highly prospective Sal de Vida lithium and potash brine project in Argentina ("Sal de Vida"), for which a preliminary economic assessment ("PEA") completed in October 2011 estimated a net present value of US$1.07 billion (at 8% discount). Lithium One also owns the James Bay lithium pegmatite project in Quebec ("James Bay"), in which Galaxy has an existing 20% stake under a farm-in arrangement.
The Proposed Merger with Lithium One represents an excellent opportunity for Galaxy to boost its global lithium resource base and become a major global lithium company. Galaxy has spent the last 18 months searching the world for a high quality, undeveloped lithium brine deposit and believes Sal de Vida fits that criterion. The Sal de Vida brine chemistry is highly favorable, with high levels of lithium and potash, and low levels of magnesium and sulphate impurities. Sal de Vida is located adjacent to FMC Lithium's El Fenix lithium operation in the Salar del Hombre Muerto, which has been in operation for the last 15 years.
Galaxy will require more lithium resources over the next few years, and Sal de Vida along with James Bay would significantly add to its existing Australian resource inventory and give it ample resources to continue to grow the lithium business and drive the long term value of the Company.
The Proposed Merger is not only a good strategic fit for Galaxy, it also represents an opportunity for Lithium One shareholders to become part of a lithium producing company with hard rock and brine assets around the world.
With Galaxy's expertise across project development and lithium mining, processing and marketing, the Company believes it would be able to fast track development of Sal de Vida as it did at the Mt Cattlin lithium mine and Jiangsu Lithium Carbonate Plant ("Jiangsu Plant").
In addition, Galaxy plans to retain Lithium One's current management team and incorporate it into Galaxy's successful business.
The Galaxy Board of Directors unanimously support the Proposed Merger and recommend that Galaxy shareholders vote in favour of it at the Annual General Meeting, which is intended to be held in May 2012.
The Proposed Merger is also unanimously supported by the Lithium One Board of Directors, which recommends that Lithium One shareholders vote in favour accordingly.
Lithium One Chairman, Martin Rowley, said this offer from Galaxy was attractive and represented an outstanding opportunity for Lithium One shareholders to realise the value of their investment.
To view the complete Galaxy Resources Quarterly Report, please refer to the following link below:
http://media.abnnewswire.net/media/en/docs/ASX-GXY-587408.pdf
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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