25/11/2020 - 11:00

Galaxy launches $161m capital raising

25/11/2020 - 11:00

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Perth-based lithium miner Galaxy Resources has sought up to $161 million to fund the first stage of its Sal de Vida development in Argentina.

Galaxy launches $161m capital raising
Galaxy is undertaking stage one works on its Sal de Vida lithium project in Argentina. Photo: Galaxy Resources

Perth-based lithium miner Galaxy Resources has sought up to $161 million to fund the first stage of its Sal de Vida development in Argentina.

Sal de Vida, situated in the Puna region, has an ore reserve of 1.1 million tonnes of retrievable lithium carbonate equivalent (LCE) and 4.9mt of LCE in mineral resources.

Proceeds from a placement and rights issue will go towards stage one of the project, expected to complete by the first quarter of 2021.

Early works including contracting long lead items will also begin next year ahead of front-end engineering and design, as part of stage two of the project.

Galaxy chief executive Simon Hay said Sal de Vida was a lowest-quartile cost lithium brine operation.

“Securing this funding for stage one would allow us to confidently proceed into the early works phase, contract long lead items and complete pond construction in 2021 during the weather window,” Mr Hay said.

“With electric vehicle demand continuing to rise in Europe and North America, we will also accelerate James Bay to a construction ready status as these regions seek to localise raw materials supply and/or build-out lithium chemicals capacity.”

Galaxy’s James Bay lithium pegmatite project is situated in Quebec, Canada.

Some of the funds raised will go towards pre-development activities for the project, including a preliminary economic assessment and updated feasibility study.

Galaxy will issue 65 million shares, priced at $1.70 each, to raise $111 million under the placement. 

Canaccord Genuity and UBS acting as lead managers, underwriters and bookrunners to the offer.

Further, Galaxy will launch a one-for-14 rights issue of about 29 million shares to raise a further $50 million.

Its balance sheet will increase to $US219 million ($A298 million), post transaction.

Galaxy has requested a trading halt, which is expected to lift tomorrow.

The company operates the 8.2mt Mt Cattlin lithium mine in Western Australia, which restarted production in late 2016 after being placed on care and maintenance for three years.

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