Galaxy mine projected to cost $68m

A definitive feasibility study into Galaxy Resources' Mt Caittlin lithium-tantalum project has pegged capital costs at $68 million, with construction to start in August this year.

The study centred on a 1 million tonne per annum operation with the first stage involving the establishment of a mine and minerals plant to produce spodumene and tantalum concentrates.

"From the minerals plant, the company can produce spodumene to sell to current lithium carbonate producers as a feed or establish toll treating partnerships," Galaxy said.

"An important by-product of the proposed operation is production of a high quality tantalite concentrate."

The first stage of the operation is estimated to deliver a life-of-mine average pre-tax cash flow of $26 million each year and a pre-tax net present value of $128 million.

The operation, located near Ravensthorpe, is estimated to a have a life of some 15 years.

Cash operating costs have been pegged at an average of $41 per tonne compared with estimated revenue of $71/t.

Construction is expected to take 10 months and the plant will be commissioned during the third quarter of 2010.

Shares in Galaxy were unchanged at 43c at 13:48 AEDT.