Redemption Date Extension on L1 Exchangeble Shares
Perth, June 8, 2012 AEST (ABN Newswire) - Galaxy Resources Limited (ASX:GXY) advises it has agreed with Lithium One Inc (CVE:LI) to extend the redemption date on exchangeable shares ("Exchangeable Shares") issued under Galaxy's proposed merger ("Merger Proposal") with Lithium One, from three years to five years.
The Exchangeable Shares may be issued to certain eligible shareholders of Lithium One who elect to receive Exchangeable Shares under the Merger Proposal, which is to be effected via a Plan of Arrangement (the "Arrangement"). The Exchangeable Shares will now be redeemable for five years (previously three years) after the effective date of the Arrangement.
Under the terms of the Arrangement, Galaxy is offering 1.96 Galaxy shares in exchange for each Lithium One common share. Certain eligible Lithium One shareholders can elect to receive all or a part of their consideration in the form of Exchangeable Shares in lieu of the Galaxy shares, which would allow for potential benefits from a deferral of capital gains tax consequences.
Galaxy shareholders will be asked to vote on certain resolutions relating to the proposed merger at a Galaxy EGM to be held 18 June 2012.
The Proposed Merger requires Lithium One shareholder approval, to be voted on at a shareholder meeting also on the 18 June 2012.
The Arrangement is expected to close in late June, 2012 shortly after receipt of all security holder and court approvals.
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.