Galaxy back to profit as it chases lithium purity premiums
Stuart McKinnonThe West Australian
Thursday, 30 August 2018 3:40PM
Stuart McKinnon
Better recovery rates at its flagship Mt Cattlin project near Ravensthorpe will lift production by a minimum 40,000 tonnes a year.Picture: Supplied
Lithium player Galaxy Resources says it is on track to boost recovery rates at its flagship Mt Cattlin project near Ravensthorpe this year, lifting production by a minimum 40,000 tonnes per annum.
The Anthony Tse-led miner said construction of yield optimisation circuits at the Mt Cattlin plant would boost recovery rates from 56 per cent to a range of 70-75 per cent, which would lift annual production volume rates to between 220,000 and 240,000dmt by the end of the year.
Chief operations officer Brian Talbot said there would be an improvement in the company’s 5.8 per cent concentrate grade but the yield optimisation program aimed at removing impurities such as iron, sodium and potassium levels.
“Obviously there will be a consequential raise in lithium grade, but that’s not the focus,” he said.
Mr Tse said downstream customers were willing to pay a premium for product that was low in impurities.
“Your ability to produce a quality above and beyond the mean in the market is ultimately going to be able to deliver benefits down the road,” he said.
Galaxy said it was planning a 60,000m greenfields drilling campaign around Mt Cattlin over the next 12 months aimed at boosting the existing resource of 11.8 million tonnes at 1.25 per cent lithium oxide.
Galaxy this morning posted a first-half profit of $11.5 million, up from a loss of $5 million in the previous corresponding period.
The result was bolstered by a 682 per cent revenue surge to $88.4 million in the half backed by a near doubling of spodumene sales from its ramped-up Mt Cattlin project to 90,019t.
The company reported a 140 per cent jump in cash per tonne margins to $US488/t.
Galaxy boosted its cash balance by 46 per cent to $45.1 million and held no debt.
Earlier this week, Galaxy confirmed the $US280 million sale of its non-core northern tenements of its $US376 million Sal de Vida lithium brine project in Argentina to South Korea’s POSCO.
Mr Tse said the company was still weighing financing and development options for Sal de Vida, with JP Morgan evaluating potential strategic partnership and offtake opportunities to advance the development of the project.
He also revealed the company was fielding a “reasonable level of inbound interest” in its James Bay hard rock lithium project in Canada.
“In terms of the interested parties, who we’ve been interacting with on James Bay we’ve probably been speaking with them or catching up in person every two to three months,” he said.
However, he said the company still needed to round out test work and its feasibility study on what would be a fully integrated upstream and downstream solution.
“Really only after completing that study will we get a better handle on where we think the overall capital requirements will be for James Bay,” he said.
