Galaxy Resources has abandoned its search for a joint venture partner for Sal de Vida, after no company was willing to inject enough capital for the Argentinian project.
Since the second half of 2018, Galaxy appointed JP Morgan to evaluate strategic joint venture opportunities and partners for the US$376 million project.
In a statement, Galaxy said it had not been able to agree on a transaction structure with a joint venture partner that offered an appropriate valuation of the asset.
“Due to prevailing market sentiment and current weakness in short-term contract prices for lithium chemicals, the company believes that it is prudent to remain patient regarding any third-party transaction for the Sal De Vida project,” it said.
But it said it remained confident in the underlying fundamentals of lithium and market growth potential, particularly after Korea-based POSCO agreed to pay $US280 million for the project’s Salar del Hombre Muerto tenements last year.
Galaxy also released its quarterly report today, which revealed lower-than-expected recovery rates at its Mt Cattlin lithium operation near Ravensthorpe.
Recovery rates were at 51 per cent for quarter end March 31, below the targeted rate of above 70 per cent.
Earlier this month, Galaxy replaced managing director Anthony Tse with Iluka Resources head of resource development e Simon Hay.
Shares in Galaxy closed 11.62 per cent lower at $1.64 each.
