Raises $2.25 Million Through Share Purchase Plan
Perth, May 1, 2012 AEST (ABN Newswire) - Galaxy Resources Limited (ASX:GXY) is pleased to announce it has raised A$2.25 million via a Share Purchase Plan ("SPP"), which was launched in conjunction with a A$30 million Placement ("Placement") to support the Company's recommended merger ("Proposed Merger") with Lithium One Inc (CVE:LI) ("Lithium One").
Galaxy said it received applications for a total of 2.92 million ordinary shares from existing eligible shareholders, and that the SPP was now closed.
Together with the Placement proceeds, existing funds available to the merged entity, and Lithium One's A$10 million in cash reserves, the SPP funds will be used for working capital for the Mt Cattlin Mine and Jiangsu Lithium Carbonate Plant, to accelerate development of the Sal de Vida Lithium Project in Argentina, debt servicing, capital raising fees and merger costs.
Galaxy Managing Director Iggy Tan said: "The Galaxy Board wishes to acknowledge the support of shareholders in the Share Purchase Plan."
Galaxy added the allotment of the shares had occurred and holding statements would be despatched to shareholders shortly.
Galaxy said the Proposed Merger with Lithium One was progressing as planned on both sides, with Target Circular to be finalised in the next fortnight.
The Proposed Merger, which is unanimously recommended by both the Galaxy and Lithium One Boards, and is supported by key shareholders of both companies, requires Lithium One shareholder approval 1 at a shareholder meeting. The meeting is expected to be held in early June 2012.
Galaxy shareholders will also be asked to vote on certain resolutions relating to the Proposed Merger at an Extraordinary General Meeting (EGM) presently intended to be held before the Lithium One shareholder meeting also in early June 2012.
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.