Galaxy Resources plans to capitalise on the anticipated growing demand for power electric and hybrid cars as it approves development of its $68 million Mt Cattlin lithium-tantalum project near Ravensthorpe.
Galaxy Resources plans to capitalise on the anticipated growing demand for power electric and hybrid cars as it approves development of its $68 million Mt Cattlin lithium-tantalum project near Ravensthorpe.
The announcement is below:
Emerging lithium producer, Galaxy Resources Limited (ASX: GXY) announced this week the final results of a Definitive Feasibility Study (DFS) for its Mt Cattlin Lithium Tantalum project. In view of the positive outcome of the DFS, the Board of Galaxy Resources Limited ("Galaxy") has now resolved to proceed with the development of the lithium project.
Managing Director, Iggy Tan said that the Company will proceed to the "Value Engineering" phase where further optimisation of the project will be undertaken before tender and selection of an EPCM contractor. We have identified further refinements to the project that could potentially reduce both our capital and operating costs. The Company intends to finalise these opportunities before we proceed to the appointment of an EPCM contractor and subsequent "detailed engineering".
The impetus to proceed with development is driven by a desire to take advantage of the anticipated increase in demand for lithium-ion batteries to power electric and hybrid cars. The Company will now proceed to select an off-take partner for the project, said Mr Tan.
Mr Tan said the project is planning to ship spodumene concentrate during Q3 2010. As announced this week with the release of the DFS, the two key factors in the positive results were the favourable characteristics of Galaxy's flat lying pegmatite resource and the attractive economics of processing a simple concentrate for the lithium carbonate producers.
Further to the announcement dated 15 December 2008 in regards to a capital raising, the Company has successfully raised an additional $0.2M over the announced $1.0M amount. Subject to ratification of this issue by shareholders at a general meeting to be called shortly, the Company has finalised another $0.45M raising via a capital book build to sophisticated investors, resulting in a total of $0.65M to help fund the next phase of the project.
The book build placementconsists of an issue price of 35 cents per share, together with free attaching, unlisted 1 year option exercisable at 35 cents each. . Galaxy will continue discussions with large international commodity marketing groups with respect to partnering, off take arrangements and project financing for the project. Subject to the necessary regulatory approvals Galaxy plans to commence mining and production activities during Q3, 2010.
