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Galaxy Resources Limited (ASX:GXY) (PINK:GALXF) Provide Update on Funding
Perth, Feb 15, 2010 AEST (ABN Newswire) - Emerging lithium producer, Galaxy Resources Limited (
ASX:GXY) (
PINK:GALXF), is pleased to provide a finance update as it progresses the development of its Mt Cattlin Spodumene Project and the Jiangsu Lithium Carbonate Plant.
Following the transfer of the Debt Facility Agreement from Creat to an independent syndicate of banks comprising Austrian Bank RZB and China Development Bank in November, Galaxy achieved the first of three drawdowns to the value of US$20 million.
The Company is currently working with its finance partners and legal representatives on loan and security arrangements and expects the documents to be finalised in time for the second US$40 million drawdown in April 2010.
The final drawdown of US$45 million is scheduled for November 2010.
Galaxy Resources Managing Director, Mr Iggy Tan, said the Company, with a current cash balance of A$80 million, is in a strong position to continue expediting the development of its projects.
"The Company's debt position is complemented by the A$33.5 million equity funding package provided by private Chinese investment firm Creat Group Company Limited.
Creat Group has nominated its Alternative Investment Market (AIM) listed subsidiary Creat Resources (CRHL) to participate in the placement which has been staged to accommodate the investment structure of CRHL.
The first stage of the placement, comprising A$6 million was received from CRHL on 16 December 2009. Mr Tan said the second and final tranche of the placement of A$27.5 million was expected to be completed in early April 2010 once the AIM compliance requirements have been completed.
"Galaxy shareholders overwhelmingly ratified the first placement and approved the second placement at General Meeting held on 10 February 2010," he said.
"The Company will still maintain a cash buffer of around A$52m on start up of both projects, after the loan facility is fully drawn down and project financed" Mr Tan said.
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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