Galaxy Resources Limited ("Galaxy" or the "Company") (ASX: GXY) notes the media speculation today regarding the Company’s Sal de Vida lithium and potash brine project in Argentina (“Sal de Vida”). Galaxy has appointed J.P. Morgan Australia Limited as its financial advisor to evaluate strategic options for Sal de Vida. As previously advised to the market, the Company is currently in discussions with a range of parties in relation to potential offtake and strategic partnership opportunities. These discussions are preliminary in nature and there is no certainty as to whether any definitive transaction will eventuate from them. Galaxy will keep the market informed of any material developments in line with its continuous disclosure obligations. The Company released a Revised Definitive Feasibility Study for Sal de Vida on 22 August 20161, which supports a low cost, long life project with robust economics. This revised DFS estimates: A post-tax net present value of US$1.416 billion at an 8% discount rate (US$1.043 billion at a 10% discount rate). Sal de Vida having the potential to generate average annual revenue of US$354 million and average operating cash flow of US$273 million per annum before tax (net operating cashflow of US$182 million after tax). Average operating costs of US$3,369 per tonne before potash credits and US$2,959 per tonne to produce battery grade lithium carbonate. A total capital cost of US$376 million. The Company confirms that all the material assumptions underpinning these estimates continue to apply and have not materially changed. Galaxy expects to announce the results of an updated Revised Definitive Feasibility Study on Sal de Vida during May 2018, which shall include updated economics for the project.
GXY Price at posting:
$2.88 Sentiment: Buy Disclosure: Held
