For those who couldn't make the link work.
Taxing times could put Galaxy's focus on Tawan
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Tawana's $173 million market capitalisation could be acquired by Galaxy using less than half the proceeds of Galaxy's recent Argentinian tenement sale.
When
Galaxy Resources raised $386 million from the sale of some lithium tenements in Argentina in May, the money looked destined to be spent on construction of its $US474 million Sal de Vida lithium brines project in Argentina.
But the introduction of a new tax in Argentina and a sharp fall in the share price of Australian lithium producers could see that money spent closer to home.
And few lithium miners are closer to home for Galaxy than
Tawana Resources.
Well-placed sources told Street Talk on Thursday that Galaxy was sitting just below the 5 per cent ownership level on the share register of both Tawana, and the Singapore-listed company that is currently merging with Tawana: Alliance Mineral Assets.
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Galaxy had declined to comment at the time of going to print.
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Tawana's Bald Hill mine is not exactly next door to Galaxy's Mt Cattlin mine, but both ship through the same port at Esperance, meaning that synergies and blending opportunities could be achieved under a combination.
Bald Hill is about 300 kilometres north of Esperance at Widgiemooltha, while Mt Cattlin is about 200 kilometres west of Esperance near Ravensthorpe.
Even more compelling for Galaxy is the 55 per cent slump in Tawana shares over the past eight months, despite the fact the company bought Australia's fourth lithium mine into production during that period.
Tawana's $173 million market capitalisation could be acquired by Galaxy using less than half the proceeds of Galaxy's recent Argentinian tenement sale.
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That market cap was 22 per cent higher on Thursday as murmurings about Galaxy's interest in the company roared across the market.
While Sal de Vida would be Galaxy's flagship asset if developed, the company does need more resource in Western Australia, where Mt Cattlin's mine life is expected to cease around 2023.
Tawana's Bald Hill also has a short mine life of about four years currently, but its leases are under-explored raising hopes it could yet be a longer life asset.
Lithium prices and equities have been sold down savagely in 2018 on expectations of too much supply from new mines, and Galaxy could do itself (and the entire industry) a favour if it took control of Bald Hill and slowed its rate of production to bolster prices.
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Tawana has typically turned to Canaccord Genuity for M&A advice, while King & Wood Mallesons is house legal adviser.
