A blast and subsequent shutdown of Galaxy Resources’ Chinese processing plant has cost the miner a potential $66.2 million cornerstone investment from the East China Mineral Exploration & Development Bureau.
Galaxy today confirmed it had been advised by ECE that its board has withdrawn its proposed investment, which would have been through the subscription of 132.4 million shares at 50c each. The placement would have delivered ECE a 19.8 per cent stake in Galaxy.
The investment was unveiled in November last year, weeks before Galaxy announced that an employee had passed away from injuries sustained from a blast at the Jiangsu plant.
Earlier this week, a second worker passed away as a result of infection from injuries.
Galaxy earlier this week said a probe into the cause of the incident had found an “abnormal and unexpected blockage” contributed to the blast. The miner said it planned to replace the ruptured U-bend section with stainless steel material with additional load support.
The plant is expected to be up and running next month.
Galaxy today said ECE has indicated it is willing to re-consider the investment when the plant returns to “stable operation”.
“Galaxy is continuing discussion with potential strategic investors and will keep the market informed of their progress,” it said.
Shares in Galaxy closed down 0.5c to 39.5c today.