Galaxy Resources And General Mining To Merge Creating Leading Diversified Global Lithium Producer

- May 30th, 2016

Galaxy Resources Limited (ASX:GXY) and General Mining Corporation Limited (ASX:GMM) (General Mining) announced they have entered into a definitive Takeover Bid Implementation Agreement to merge the two companies.

Galaxy Resources Limited (ASX:GXY) and General Mining Corporation Limited (ASX:GMM) (General Mining) announced they have entered into a definitive Takeover Bid Implementation Agreement to merge the two companies. It is proposed that Galaxy will acquire all of the issued shares of General Mining that it does not already own in a share based transaction by way of an off-market takeover offer.
As quoted in the press release:

Highlights of the Merger

  • Creation of a leading diversified global lithium company with a large wholly-owned portfolio of hard rock and brine based lithium assets located in multiple
  • Leading growth profile underpinned by Mt Cattlin production, the development of the Sal de Vida brine project in Argentina and James Bay hard rock project in Quebec,
  • Positioned to be a major supplier of high quality lithium, servicing the growing demand from energy storage
  • Strong financial position with a strong pro-forma balance sheet and growing cash flow generation to support continued project expansion and development, and further industry opportunities.
  • Enhanced equity and capital markets profile with a combined pro-forma market capitalisation in excess of A$700
  • Significant growth potential with existing and expanding production, diversified and superior growth profile, proven management and operating teams, strong balance sheet and greater international market
  • Galaxy and General Mining Boards unanimously support the
  • 94% of General Mining shares have entered into pre-bid acceptance agreements. In addition, other General Mining shareholders associated with Michael Fotios, the Chairman of General Mining, representing a further 10.56% of General Mining shares outstanding have made statements of intention to accept the Offer, in absence of a superior proposal.

Galaxy Resources Chairman, Martin Rowley, stated:

We are extremely pleased that the joint venture arrangement we entered into with General Mining in 2015 has resulted in a merger proposal that makes sound strategic sense and, importantly, gives the shareholders of both Galaxy and General Mining the opportunity to participate in the upside of a merged lithium company of global significance.
The arrangement struck between Galaxy and General Mining has enabled the re-commissioning of the Mt Cattlin mine, drawing on General Mining’s financial and technical resources, with Mt Cattlin now poised to deliver first production of spodumene to contracted buyers in the third quarter of calendar 2016.
We are confident that merging the companies will result in significant benefits to both sets of shareholders with the opportunity for a re-rating for the expanded shareholder base from the enhanced equity and capital markets profile.

Connect with Galaxy Resources Limited (ASX:GXY) to receive an Investor Presentation.

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