Sal de Vida Lithium Brine Project is a Go for Galaxy

Galaxy could produce 25,000 mt/y of Li2CO3.
Galaxy Resources has completed an update of the definitive feasibility study (DFS) of its Sal de Vida lithium brine project on the Salar del Hombre Muerto in northwest Argentina that reaffirms the potential for a long-life, low-cost, highly profitable operation, with a revised posttax net present value estimated at $1.48 billion at an 8% discount rate.

Galaxy plans to produce both battery- grade lithium carbonate (Li2CO3) and potash products through the treatment of lithium enriched brine from the Salar del Hombre Muerto. The updated DFS calls for production of 25,000 metric tons per year (mt/y) of battery-grade Li2CO3 and 94,000 mt/y of potash over an initial project life of 40 years.

The project also has significant, potential- future upside from further resource definition and subsequent reserve upgrade. The DFS models an operation with an initial three-year ramp up to full planned Li2CO3 production. Potash production is deferred for two years after the start of Li2CO3 production.

At the planned production rate, Sal de Vida has the potential to generate average annual revenues of $360 million and average annual operating cash flow (EBITDA) of $270 million. Average operating costs to produce battery-grade Li2CO3 are estimated at $3,144/mt after potash credits FOB Antofagasta, Chile, evidencing the low-cost nature of project. Revised total capital costs for the project are estimated at $474 million.

Current mineral reserve estimates for Li2CO3 equivalent at Sal de Vida are 181,000 mt proven and 958,000 mt probable. Combined measured, indicated and inferred resources stand at 7.2 million mt of Li2CO3 equivalent. The Sal de Vida project is well serviced by nearby infrastructure, including major highways, a national and international rail link that connects to the Port of Antofagasta in Chile, and access to the power grid and a gas pipeline.

“We are very pleased that the formal revision to the economics of Sal de Vida continue to reinforce a world-class asset, as well as a project with a robust financial profile,” Galaxy Managing Director Anthony Tse said. “Galaxy has appointed JP Morgan Australia as financial advisor to assist in evaluating potential strategic partnership and/or off-take opportunities to advance project development.”

Galaxy is a lithium-focused, Australia- based company whose assets include the Mount Cattlin mine in Western Australia and the James Bay lithium pegmatite project in Québec, Canada.

As featured in Womp 2018 Vol 06 -