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Galaxy Resources Limited (ASX:GXY), is pleased to announce it has sold 120,000 tonnes of lithium concentrate from the Mt Cattlin Project in Ravensthorpe, Western Australia, for US$830 per tonne (FOB, minimum 5.5% Li2O) to be delivered in calendar year 2017, having signed binding agreements with its existing China-based buyers.
Highlights
- Binding agreements signed with current Chinese customers for CY2017
- 120,000 tonnes of lithium concentrate sold for 2017 delivery at US$905/t (FOB Esperance) for 6% Li2O
- Following initial production from Mt Cattlin which yielded higher than anticipated grades after flow sheet redesign, Galaxy is now confident of producing an improved 6% grade lithium concentrate product
- Galaxy is currently discussing more longer term arrangements with its existing customers beyond 2017, and will also look at options to diversify its customer base
- Offtake arrangements to settle through partner Mitsubishi Corporation
- Mining operations at Mt Cattlin commenced on 12 December 2016
Offtake Agreement
Galaxy Resources Limited (ASX:GXY), is pleased to announce it has sold 120,000 tonnes of lithium concentrate from the Mt Cattlin Project in Ravensthorpe, Western Australia, for US$830 per tonne (FOB, minimum 5.5% Li2O) to be delivered in calendar year 2017, having signed binding agreements with its existing China-based buyers. Customers will also be paying an additional US$15/t for every 0.1% improvement in grade of Li2O delivered, resulting in an agreed price of up to US$905/t for a 6% lithium concentrate.
The sale of this 120,000 tonnes of lithium concentrate is with chemical converters in China who produce both lithium carbonate and lithium hydroxide. The Company’s current guidance for 2017 is for 160,000 tonnes of lithium concentrate production, based on an approximate 50% recovery – this production level will satisfy both the outstanding balance of 2016 contracted volumes to be delivered, as well as the newly contracted 2017 volumes. The Company intends to continue on working to improve recovery at the Mt Cattlin processing plant and with any incremental production available in the future, it will look to place such volume to existing and/or new customers.
Read the full company profile.
Galaxy Managing Director, Anthony Tse said the Company had experienced very strong interest from a wide range of customers since the planned restart of the Mt Cattlin Project and significant demand for the project’s planned production.
“The Mt Cattlin team will be working on a number initiatives through the course of 2017, with the objective of increasing production recovery above and beyond the initially targeted 50% level, to provide its customers with the volume and quality of product they require as they continue to grow,” Mr Tse said.
“Initial lithium concentrate production has produced Li2O grades ranging from 5.8% to 6.4%. This product quality has been achieved as a result of the design changes that have been made to the processing plant flowsheet and represents a significant improvement in specifi- cations over that of the historical product from Mt Cattlin when it previously operated. The increase in price is indicative of the continued robust demand, as well as the key role that Galaxy will now be playing as the newest producer supplying up to 20,000 tonnes LCE of raw material into the growing market. These agreements also underscore the strong relationship Galaxy has with its customers and consoli- dates a long-term partnership with a number of the significant chemical converters in China, who are in turn integrated into the fast growing lithium battery materials sector in that market.”
Mining Commencement
Following its recent engagement of Piacentini & Sons (“Piacentini”) as mining contractor, Galaxy officially recommenced mining at the Mt Cattlin Project on 12 December. In achieving this milestone, both the Company and Piacentini have guaranteed supply for run of mine ore to support the continued ramp up of the Mt Cattlin processing plant.
First Load Tipped On ROM Pad
Mining In Pit
First Load In Pit
For more information, please contact:
Corporate
Nick Rowley
Director – Corporate Development
+61 (8) 9215 1700
Media Enquiries (Australia)
John Gardner
+61 413 355 997 or +61 (8) 6160 4901
Media Enquiries (International)
Heidi So
Strategic Financial Relations Ltd
+852 2864 4826
Heidi.so@sprg.com.hk
Caution Regarding Forward-Looking Information
This document contains forward-looking statements concerning Galaxy.
Forward-looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors. Forward-looking statements are inherently subject to business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Company’s actual results to differ materially from those expressed or implied in any forward-looking information provided by the Company, or on behalf of, the Company. Such factors include, among other things, risks relating to additional funding requirements, metal prices, exploration, development and operating risks, competition, production risks, regulatory restrictions, including environmental regulation and liability and potential title disputes.
Not For Release in US
This announcement has been prepared for publication in Australia and may not be released in the U.S. This announcement does not constitute an offer of securities for sale in any jurisdiction, including the United States, and any securities described in this announcement may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer and that will contain detailed information about the company and management, as well as financial statements.
Forward looking statements in this document are based on Galaxy’s beliefs, opinions and estimates of Galaxy as of the dates the forward looking statements are made, and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments.
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