Galaxy Resources recently received notice from its partner, General Mining, that mining operations have commenced at the Mt Cattlin hard-rock lithium mine in Western Australia.
Last week, Galaxy Resources (ASX:GXY) received notice from its partner, General Mining (ASX:GMM), that mining operations have commenced at the Mt Cattlin hard-rock lithium mine in Western Australia.
As per the company’s release, an initial five-week program will recover and stockpile spodumene and tantalum concentrates. Crusher and coarse-circuit commissioning is expected to take place during the June quarter, with the company working through a three-month ramp up to a base-case throughput rate of 800,000 tonnes per year.
The project is fully funded through this optimization phase via offtake payments. At the start of March, Galaxy announced a $36-million spodumene concentrate offtake agreement with two Chinese buyers, to be settled through Mitsubishi (TSE:8058).
Certainly, the milestone is an important one for Galaxy. Mt Cattlin was put on care and maintenance in 2012, but the company signed an agreement with General Mining last September to bring the mine back online by Q1 2016.
“The recommencement of production at Mt Cattlin represents another major achievement by General Mining in not only meeting its obligations to Galaxy Resources, but also in becoming a reliable, independent and growing supplier of spodumene concentrate to the global lithium market,” said General Mining Executive Chairman Michael Fotios in a statement.
“The Project team has delivered against a very tight commissioning timeline in order to take advantage of market demand, and I’m confident in our ability to continue to meet our ramp up schedule over the coming months,” he added.
General Mining has an option to earn a 50-percent interest in the Mt Cattlin project. The company provided the capital for the restart and ramp up of operations at Mt Cattlin.
First delivery of concentrates to the company’s Chinese customers is expected to take place in July or August.
Shares of Galaxy were trading at $0.255 on Friday. The company’s share price is up 37 percent in the past month and 121 percent so far in 2016. General Mining is up 49 percent so far in 2016 at $0.38 per share.
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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Galaxy Resources is a client of the Investing News Network. This article is not paid-for content.