Signs Long Term Offtake Agreements for Mt Cattlin
Perth, Nov 29, 2017 AEST (ABN Newswire) - Galaxy Resources Limited (ASX:GXY) (GALXF:OTCMKTS) ("Galaxy") ("Company"), is pleased to announce that it has executed binding long term offtake contracts with multiple customers throughout Asia. Galaxy Lithium Australia Limited, a wholly owned subsidiary of Galaxy, which owns the Mt Cattlin Project ("Mt Cattlin") in Ravensthorpe, Western Australia has agreed to sell 100% of the planned production of lithium concentrate from Mt Cattlin for 5 years beginning in 2018. Pricing is on either a CIF (cost plus insurance and freight) or CFR (cost plus freight) basis and will be subject to an annual pricing review between Galaxy and its customers in Q4 of each calendar year. The parties have agreed the pricing for FY 2018. Annual volumes are subject to standard commercial terms with delivery on a +/- 10% basis.
- Binding offtake agreements for minimum 200,000 tonnes per annum of lithium concentrate signed with multiple customers for 5 years
- 100% of total planned lithium concentrate production from Mt Cattlin sold for contract term
- Headline pricing achieved for 2018 higher than 2017
- A portion of Mt Cattlin lithium concentrate to be converted on Galaxy's behalf into lithium carbonate and or lithium hydroxide
- Galaxy to commence selling lithium chemical products to the end-user market in 2018
- Offtake arrangements to settle through Mitsubishi Corporation
Key Terms of the Agreements
Galaxy's offtake partners are each leading and reliable producers of lithium carbonate (Li2CO3) and lithium hydroxide monohydrate (LiOH.H20) and are all key suppliers of lithium products and materials throughout Asia.
Galaxy Managing Director, Anthony Tse said the Company had experienced very strong interest from a wide range of current and new buyers after the consistent quality and delivery of production from Mt Cattlin throughout 2017, with the Company seeing significant increasing demand over the 5 year contract term.
"The Mt Cattlin team will be working on a number of initiatives through the first half of 2018, to provide its customers with the increasing volume and consistent quality of product they require as they continue to expand their own operations," Mr Tse said.
"These agreements also underscore the strong relationship Galaxy has with its customers and consolidates long-term partnerships with a number of the larger and high quality chemical converters in Asia, who are in turn suppliers into the fast-growing lithium battery materials sector in that market."
Galaxy has also agreed for a portion of the Mt Cattlin lithium concentrate sold under the offtake agreements to be converted on Galaxy's behalf into lithium carbonate and or lithium hydroxide. Detailed agreements evidencing these arrangements will be prepared in early 2018. This will allow Galaxy to commence selling its own lithium chemical products into the end-user market, which is currently exhibiting a robust demand and pricing environment.
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.