Galaxy Resources Limited (ASX:GXY) To Receive First Creat Placement Settlement Of A$6 Million
Perth, Dec 9, 2009 AEST (ABN Newswire) - Galaxy Resources Limited (ASX:GXY)(PINK:GALXF) is pleased to announce that it will receive A$6 million on or about 21 December 2009 being the first stage share subscription placement ("First Subscription") from Creat Resources Holdings Limited ("CRHL"), an investment vehicle for Creat Group Co Limited ("Creat"). Creat is a 70% major shareholder of CRHL listed on the AIM market of the London Stock Exchange. The owners and employees of Creat also comprise the Chairman, Managing Director/CEO and CFO of CRHL. Galaxy will be issuing 5,280,000 shares to CRHL.
The second and final stage share subscription placement of A$23 million ("Final Subscription") will occur on or about 30 January 2010 immediately after the CRHL AGM to formally approve this Final Subscription.
Creat Group has nominated CRHL as the subscriber for the Galaxy shares in accordance with its right to do so under the Share Subscription Agreement. Galaxy has agreed with Creat to a delayed and staged share placement program because of the nomination of CRHL as the subscriber and the need for CRHL to comply with AIM listing requirements.
As a result of this delay, Galaxy will need to refresh its shareholder approval for these placements and the nomination of CRHL, which it will do at an EGM to be convened for late January 2010.
Managing Director, Iggy Tan said that facilitating Creat's nomination has resulted in an unforeseen delay, but noted that Creat has already otherwise proved a valuable partner by procuring bank funding independent of the parties, through its significant banking relationships with RZB Bank of Austria and the China Development Bank, as well as providing a guarantee to the banks for the A$130 million project loan facility. The first tranche of the project loan was drawn on 27 November 2009.
"The commercial benefits to the transaction are significant, marking the beginning of what Galaxy expects to be a long and mutually beneficial relationship".
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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