pfs calculations, page-9

From miningnews.net


Galaxy fails to dazzle on Mt Cattlin PFS
Friday, December 14, 2007
Lorna Seatter

SHARES in Galaxy Resources dropped 30.46% in the past seven days to a low of 60.5c in early afternoon trade today, following the company's maiden resource estimate and pre-feasibility study results.
The company's shares peaked at $1.03 at the end of November but have fallen back significantly since then, despite the company's series of announcements about its Mt Cattlin project.

The PFS, announced today, identified the Mt Cattlin lithium-tantalum deposit as a viable mine with a 10-year life at an annual processing rate of 1 million tonnes.

Galaxy Resources managing director Michael Fotios told MiningNews.net the share price drop was not a reflection of the quality of the company's assets.

"I think what has happened in the last month is people have known for some time that this information was coming and we noticed about two or three weeks ago that a lot of day traders were starting to build up into the stock and pushed the price up," he said.

"When they started buying, the stock was probably around mid sixties, and they've pushed it from there through to a dollar."

"Once [the day traders] have withdrawn, I think it will creep back up and regain its growth."

Fotios said the fundamentals of the project were strong and lithium demand was picking up, especially with the growth of the electric vehicle market requiring large quantities of lithium batteries.

Last week, Galaxy reported an initial measured, indicated and inferred resource at Mt Cattlin of 24.8 million tonnes at 8.2% spodumene (0.56% lithium) and 120 parts per million tantalum for 2.03Mt spodumene and 6.62 million pounds tantalum.

Fotios said the only other projects with comparable resources were in Canada and China.

"And ours is the same size, if not bigger," he said.

"The fundamental difference with ours is our pegmatite is very close to the surface … so its mining economics in particular are very good."

"Size-wise, we are up there as one of the bigger examples of that type of mineralisation in the world."

Galaxy said the Mt Cattlin mine will be an openpit operation with an annual production target of 116,666t of spodumene concentrate grading 6% lithium, and 364t at 25% tantalum for 200,000 pounds of contained tantalum.

The company said revenue from production, at current market values, could be about $US400 ($A456) to $500 per tonne for spodumene concentrate and $45-50 per pound.

Negotiations with potential customers at these prices are underway, the company said.

"We are very pleased with the robust results returned from the pre-feasibility study and look forward to now moving ahead with the bankable feasibility study," Fotios said.

A bankable feasibility study into the project is due by June next year.

Shares in Galaxy climbed back up to 68.5 at close of trade today.