27/10/2009 - 11:35

Galaxy, GMC strike overseas alliance

27/10/2009 - 11:35

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Galaxy Resources has extended its relationship with unlisted public company General Mining Corporation, with the pair forming an alliance to explore for lithium in Kazakhstan and Mongolia.

Galaxy, GMC strike overseas alliance

Galaxy Resources has extended its relationship with unlisted public company General Mining Corporation, with the pair forming an alliance to explore for lithium in Kazakhstan and Mongolia.

General Mining Corp already holds tenements and interests in the countries, and its main projects of focus include the Uvs Basin project in Mongolia while GMC is targeting potash and will also test for lithium and potassium.

Under the agreement, once a lithium project has been identified, Galaxy will fund further exploration and development up to completion of a bankable feasibility study, to earn an 80 per cent interest in the project.

GMC will be free-carried up until the completion of the BFS, and should it elect not to contribute to the costs, its interest will dilute to a free-carried 2 per cent net smelter royalty.

Galaxy managing director Iggy Tan said the company's proposed $55 million Jiangsu lithium carbonate processing facility in China could be used as a possible downstream processing option, adding value to any potential projects.

He added that both countries represented a new frontier in lithium exploration with the close proximity of burgeoning lithium ion battery markets in China, Japan and Korea.

"The Alliance will help Galaxy pursue some new lithium based exploration projects without diverting its current focus of rapidly advancing the Mt Cattlin Mine and Jiangsu Lithium Carbonate project towards production," he said.

GMC and Galaxy already have a joint venture agreement over the Shoemaker iron ore project in the Mid West.

Meantime, GMC today lodged its initial public offer prospectus with the Australian Securities and Investments Commission to raise up to $8 million through the issue of 40 million shares at 20 cents each.

As part of the alliance deal, GMC has agreed to set aside 40 per cent of shares to be issued in the IPO to Galaxy shareholders.

GMC recently appointed Boris Matveev as managing director of the company.

GMC, which recently raised $240,000 through seed capital to help it prepare for the float, anticipates listing on the ASSX on December 11.

State One Stockbroking is the lead manager of the IPO.

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