- Galaxy Resources (GXY) has picked up the pace at its global lithium operations over the final quarter of 2020
- GXY’s Mt Cattlin operations in Western Australia are set to be scaled up to full rate as the company flags an increase in lithium prices and consumer demand
- Lithium concentrate at the facility was up 369 per cent on the previous quarter at the project
- Over at Sal de Vida in Argentina, the explorer draws closer to completing the front-end engineering design of its pilot low-cost lithium brine operation
- Galaxy Resources shares are off by 4.33 per cent following the announcement, trading at $2.87 each
Galaxy Resources (GXY) has picked up the pace at its global lithium operations over the final quarter of 2020.
Mt Cattlin, Western Australia
Production at Galaxy’s more mature lithium concentrate operation in Ravensthorpe Western Australia was up across most metrics for the period.
Mt Cattlin produced 33,344 dry metric tonnes of lithium concentrate at a grade of 5.94 per cent lithium oxide, representing a significant 349 per cent increase on the previous quarter.
Plant recovery however declined to 51 per cent, averaging 54 per cent for FY2020, and slightly below GXY’s annual guidance figures.
The increasing global demand for lithium offered some respite for GXY, as it shipped a record 75,366 dry metric tonnes of spodumene concentrate during the quarter.
In aggregate, the shipments represent a 349 per cent increase on the prior quarter and a 14 per cent increase on the year prior.
Galaxy appears to maintain a more positive sentiment for the future, advising it will take Mt Cattlin operations to full rate in the near-term on account on improving lithium prices, low inventory and strong demand from its customers.
Sal de Vida, Argentina
Galaxy flagged the “de-risking” process it is currently undertaking at the Sal de Vida lithium project in Argentina, which it is gearing up to be a highly-competitive, low-cost lithium brine operations.
The process encompasses using more mature technologies and breaking up development into stages based on potential easings of COVID-19 restrictions.
The project’s pilot stage is nearing completion according to GXY, with front-end engineering design (FEED) at 95 per cent completion and showing encouraging initial results, producing 0.8 tonnes of high-grade lithium carbonate peaking at 99.9 per cent purity.
The explorer maintains the project is on track for completion for the first quarter of 2021.
Galaxy also commenced an eight well drilling program for stage one brine production at the project, which is expected to be completed over the next 10 months ahead of a mineral resources update towards the end of 2021.
Galaxy says it continues to target first production for late 2022.
Finances
Galaxy wrapped up an entitlement offer and institutional placement totalling $160.7 million in November last year, with the financing package expected to provide funding certainty and positions for Galaxy to execute delivery of Sal de Vida Stage one and meet its development timeline.
Post equity financing, Galaxy affirms it is debt-free with cash and financial assets sitting at US$215.1 million (roughly A$281 million), as at 31 December 2020.
At the end of the quarter, Galaxy successfully extended the maturity date of its US$40 million (roughly A$52 million) undrawn debt facility with BNP by 12 months to 31 December 2021.
Galaxy Resources shares are off by 4.33 per cent following the announcement, trading at $2.87 each at 11:57 am AEDT.