Perth, Mar 12, 2009 AEST (ABN Newswire) - Galaxy Resources Limited (ASX: GXY) announced today that it is on track to commission the Mt Cattlin Lithium Tantalum project by Q3 2010 and has provided further information on the expected milestones it expects to deliver leading up to the commissioning.
With the Definitive Feasibility Study (DFS) completed by the end of 2008 as planned, Galaxy has been able to quickly advance the next stages of the project timeline. The "Value Engineering" phase of the project is continuing and further refinements that have the potential to reduce both capital and operating costs at the project are being made. Once completed, Galaxy will then move to tender and select an EPCM contractor for the project.
The Company is in the process of finalising off-take discussions with key partners in Europe, Japan, Korea, and China. Once Galaxy has selected and finalised off-take security and partners, it will look to secure funding for the $68 million project. Risk advisory group, Noah's Rule has been appointed to advise on debt and equity structuring.
Galaxy believes the current economic climate presents an ideal time to commence building a project. Greater availability of labour and engineering resources mean projects can be established at a significantly lower cost. Operating costs are also declining.
In addition, a recent report from Roskill indicates that demand for lithium is expected to grow substantially from 2010 onwards, which is ideal timing for the planned commissioning of Mt Cattlin.
Managing Director Iggy Tan said the Company was encouraged by the opportunities that the downturn in the market was presenting for Galaxy and the development of the Mt Cattlin project.
"While the present market conditions are obviously challenging for many companies in the resources sector, we see a number of benefits arising from this market including access to people and engineering capability and lower labour and operating costs," said Mr Tan.
"Our plan is to secure off-take partners and project funding within the next 6 months with an aim to commission and start up the mine and minerals plant by Q3 2010.
"This is an aggressive plan in the current financial market , however , we believe this milestone is still very achievable," he said.
The following is the breakdown of key milestones:
---------------------------------------------Key Milestones Timeframe Status---------------------------------------------Completion of Definitive Feasibility Study End 2008 Completed Value Engineering Phase Q1 2009 In progress Off take Partners Finalised Q2 2009 In progress Award of EPCM Contract Q2 2009 Project Finance Finalised Q3 2009 Construction Commencement Q3 2009 Minerals Plant Commissioning Q3 2010 Minerals Plant Start Up & First Shipment Q3 2010---------------------------------------------
The Company has recognised that the value of the Mt Cattlin project could be significantly enhanced by producing the lithium carbonate itself rather than just selling the spodumene concentrate. The Company is currently considering toll treatment options as well as establishing its own lithium carbonate production facility. If a lithium carbonate plant can be established in the same timeframe as the mine and minerals plant, Galaxy intends to pursue this option.
About Galaxy Resources Limited
Galaxy Resources Limited (ASX:GXY) (OTCMKTS:GALXF) is an international S&P / ASX 200 Index company with lithium production facilities, hard rock mines and brine assets in Australia, Canada and Argentina. It wholly owns and operates the Mt Cattlin mine in Ravensthorpe Western Australia, which is currently producing spodumene and tantalum concentrate, and the James Bay lithium pegmatite project in Quebec, Canada.
Galaxy is advancing plans to develop the Sal de Vida lithium and potash brine project in Argentina situated in the lithium triangle (where Chile, Argentina and Bolivia meet), which is currently the source of 60% of global lithium production. Sal de Vida has excellent potential as a low cost brine-based lithium carbonate production facility.
Lithium compounds are used in the manufacture of ceramics, glass, and consumer electronics and are an essential cathode material for long life lithium-ion batteries used in hybrid and electric vehicles, as well as mass energy storage systems. Galaxy is bullish about the global lithium demand outlook and is aiming to become a major producer of lithium products.
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