Galaxy Update - COMPLETION OF FUNDRAISING AND FARM IN AGREEMENT
Creat Resources Holdings Limited ("CRHL") (AIM: CRHL) advises that the following announcements have been made by Galaxy Resources limited ("Galaxy"), in which CRHL has a major shareholding.
On 11 January 2011 Galaxy Resources Limited (ASX: GXY, "Galaxy") announced completion of its review of the Ponton Rare Earths Project.
"During the review, Galaxy analysed historical rare earth element (REE) exploration and drill data completed by Herald Resources Limited in 1994. Detailed aerial and ground magnetic and radiometric surveys were completed, which outlined a strong radiometric anomaly in the east of the tenement, in addition to several magnetic anomalies".
On 17 January 2011 Galaxy completed the second tranche of its previously announced $ 91.5 million capital raising. $ 10.5 million in convertible bonds was settled and received by Galaxy.
"The settlement deadline to finalise Fengli's part of the second tranche (comprising A$19 million convertible bonds and a
A$30 million equity placement) has been extended by 31 days to 15 February, 2011, due to the very sad and unexpected passing of Mr Wu Yue Ming, President and major shareholder, Fengli Group.
The purpose of the extension is, at Fengli's request, to allow time for appropriate administrative arrangements to be made by Fengli due to Mr Wu's passing to enable it to be able to complete its investment. All parties have agreed to the deadline extension. The extension will have no impact on the total funds raised or the terms of the capital raising.
The first tranche of the capital raising comprising A$32 million in convertible bonds was settled on 19 November 2010.
As previously advised, this capital raising as well as the Company's intentions to list on the Hong Kong Stock Exchange will provide the platform for Galaxy to become a vertically integrated lithium company, from raw product lithium production through to chemical processing and lithium-ion battery manufacturing."
On 2 February 2011 Galaxy received a one month extension from the ASX for the issue of shares relating to its proposed listing on the Stock Exchange of Hong Kong ("SEHK").
"At its General Meeting on 22 December 2010, Galaxy shareholders overwhelmingly approved the issue of up to 197,000,000 fully paid ordinary shares in connection with the Company's proposed listing on the SEHK. The shares were to be issued within three months of the General Meeting (by 22 March 2011).
At the request of the Company, the ASX has granted a waiver from requirements of ASX Listing Rule 14.7 to permit the
Company to issue the shares later than originally stipulated on the following conditions:
- That the shares are issued by no later than 22 April 2011; and
- That the terms of the waiver are released to the market."
On 15 February 2011 Galaxy completed its fundraising issuing 21,582,733 shares to Fengli Group (Hong Kong) Co Limited at Aus$1.39 per share, resulting in income of $29,999,998. As a result, the Company's interest in Galaxy is 17.78%.
In addition, on 15 February 2011 Galaxy signed a formal farm-in and joint venture agreement ("Agreement') with Lithium One Inc. (TSX-V:LI) of Canada to acquire up to 70% of the James Bay Lithium Pegmatite Project in Quebec.
"Under the terms of the Agreement, Galaxy will acquire an initial 20% equity interest in the James Bay Project for C$3 million. Galaxy will have the potential to increase its stake to 70% through the completion of a definitive feasibility study within a 24 month period. Whilst the formal agreement has been executed, the initial payment of C$3 million is subject to minor conditions involving transfer of some minor tenements from one option holder to Lithium One. Galaxy expects the conditions to be satisfied within the next month."
Furthermore, in connection with its impending listing on the Hong Kong Stock Exchange, on 11 February 2011 Mr Michael Spratt was appointed an independent non-executive director of Galaxy.
Further information on Galaxy can be obtained from www.galaxyresources.com.au.
CRHL's Chief Operating Officer Mr Rex Chow said: "We are confident that the successful completion of Galaxy's new fundraising, its impending listing on the Hong Kong Stock Exchange and the continued enhancement of its lithium resource-base all further underpin our strategic investment and will help add new value for CRHL shareholders. At the same time, we continue to explore similar opportunities for international expansion, and to appraise the development prospects on our existing exploration tenements in Western Tasmania."
CRHL last year completed the acquisition of its shareholding in Galaxy at an agreed price of Aus$0.88 per Galaxy share. CRHL Executive Chairman Yuewen Zheng and Non Executive Director Xiaojian Ren are both non-executive directors on the Galaxy Board.
For further information please visit www.creatresources.com or contact:
Creat Resources Holdings Limited Yasmine Healy
GXY Price at posting:
7.8¢ Sentiment: None Disclosure: Not Held
