Galaxy Bids for Lithium One
Galaxy is headquartered in West Perth, Western Australia, and wholly owns the Mt. Cattlin project near Ravensthorpe, Western Australia, where it mines lithium pegmatite ore and processes it on site to produce a spodumene concentrate and tantalum byproduct. The concentrate is shipped to Galaxy’s lithium carbonate plant in China’s Jiangsu province.
Lithium One’s principal asset is the Sal de Vida lithium and potash brine project in Argentina. End-user partners KORES, LG International, and GS Caltex are earning a maximum of 30% project equity by funding a minimum of $15 million in feasibility work, providing an off-take agreement for up to 50% of the lithium production, and providing a completion guarantee for the debt component of the capital development costs ( E&MJ, November 2011, p. 14).
Lithium One also owns the James Bay bulk-tonnage spodumene project in Quebec. Galaxy is earning a maximum 70% project equity in the James Bay pro-ject through an earn-in agreement that includes delivery of a feasibility study by early 2013.
Commenting on the transaction, Galaxy Managing Director Iggy Tan said, “A merg-er with Lithium One represents an excel-lent opportunity for Galaxy to boost its global lithium resource base and become a major lithium company. Galaxy has spent the last 18 months searching the world for a high-quality, undeveloped lithium brine deposit, and we believe Lithium One’s Sal de Vida lithium-potash project in Argentina fits that criterion. The Sal de Vida brine chemistry is highly favorable, with high levels of lithium and potash and low levels of magnesium and sulphate impurities.
“Galaxy will require more lithium resources over the next few years, and the Sal de Vida project, along with the James Bay project, will significantly add to our existing Australian resource base at Mt. Cattlin and give us sufficient resources to continue to grow the lithium business and drive the long-term value of the company.
“With Galaxy’s expertise across project development and lithium mining, process-ing, and marketing, we will aim to fast track development of Sal de Vida as we did at Mt. Cattlin and the Jiangsu lithium carbonate plant. Galaxy plans to retain Lithium One’s current management team and incorporate it into Galaxy’s successful business,” said Tan.