SAL DE VIDA PROJECT
Project Development
A lease has been signed for a new corporate office location in Catamarca City which will act as the principal base for theproject team. Construction and fit-out of the office is scheduled to be completed early in Q2, 2019.WorleyParsons will be engaged as Project Management Consultant (“PMC”
and a contract covering early works is beingnegotiated.Mike Nelson, a highly experienced mining professional has been appointed as the SDV Project Director. Recruitment iscurrently underway for other key project team positions.
*** There is no down side risk for galaxy. The project is continuing to be developed.
Option 1 - Self funded 100% ownership. There are no delays, the project has started so I see no JV as no issue at all. The company is in a sound financial position to secure adequate funding via a mixture of corporate bonds, debt securities and bank financing (remember we have a solid credit rating from PNB Paribus as we had a $60m loan facility that was paid on time and in full).
Option 2 - Partially fund the Capex and JV. Again no hold up here as the project has already commenced. There is a lot of work to be completed prior to requiring the capital construction (plant) costs. In fact, the longer this process drags out the more that galaxy pump $$ into SDV and guess what! the more the JV partner will have to pay. It will all need to be factored in. Management know they are in a sweet spot, hence the silence. Either you are with us or you are not. Take you pick.
Geology & Hydrogeology
The resource extension drilling campaign advanced in Q4 2018 and will continue into Q1 2019 following some delays. Wells#25 and #26 have achieved depths of 311m and 183m respectively with well #25 now widened to a 16” diameter.When completed, results from the new wells will be modelled to
enable a recalculation of the resource, as well as tostrengthen the knowledge base upon which the current hydrogeological model of the salar is founded.
***GLN released positive results yesterday as a result of their recent drilling campaign in Salar del Hombre Muerto, Argentina. The drill hole they released results on was a mere 1km away from the 2 holes GXY are currently drilling.
This will almost certainly result in a resource upgrade for galaxy. We may well have just found the additional 25kt pa that the binding offer partner has requested. Perhaps someone can assist with total out put pa from SDV and the return. From memory US$320 pa at full run rate?
Process Development
As part of the Company’s continuous product validation and process optimization strategy the project team is currentlyundertaking
two concurrent test work programs. Work is currently underway to prove up and fine tune each unit process inthe existing process flowsheet (incorporating solar evaporation ponds) to produce a battery-grade lithium carbonate. A strategic decision was also made in late 2018 to
further assess alternative processing technologies through a parallel testwork program utilizing several non-conventional technologies that are in already in commercial use, albeit in non-lithiumindustries. To assist this process, an independent process advisory committee has been established to oversee and guidethis work program. The committee comprises three technical industry experts, with former experience at FMC, Rockwoodand Tianqi, as well as two senior Galaxy representatives.
*** Proprietary conversion technology POSLX - 3.3k dmt Shipment from MC to POSCO.
Engineering Development and Site Works
Following the completion of the sale of the northern tenement package to POSCO as well as a series of comprehensiveplanning and alignment technical workshops, the workplan and budget for development works for FY2019 was developedduring the quarter. This refined execution plan details the key milestones and all required engineering, as well as otherfunctional activities required in order to take the project to a position where the Board can resolve to commit the full updatedproject capital estimate required for the construction of the Sal de Vida project.Value engineering studies were initiated during the quarter,
primarily focused on identifying potential capital reductionopportunities and advancing project engineering to the detail required to prepare and commission bid packages for detailedengineering. A detailed geotechnical survey was also well advanced in during the quarter. This work program will form thefoundation of engineering input to civil works, most notably for the construction of the evaporation ponds and the preciselocation of the process plant. Further value engineering analysis, including energy generation options, water supply andoffsite precast and pre-assembly options will be advanced in 2019.
Construction of a 15 hectare pilot evaporation pond commenced with progress of earthworks approximately 50% completeat the end of the quarter.
*** Capex potentially reduced. The 15 Hectare pilot evaporation ponds can be seen in the google images posted early today.
Given the fact that there are some extremely sensitive strategic negotiations in progress, resulting in limited ability for management to keep the market informed on said items, management have been very open and transparent in my opinion. I also think that A LOT of the above information has been not only over looked but simply disregarded purely on the basis that the market was expected the announcement of a deal.
The reality is that the absence of a deal is not a bad thing due to the above. Shorts have began covering. FACT. The smart money will take profits and begin to take a long position, this momentum shift will be swift. The price should never have dropped below $3. But hey, where is the fun in that....
Galaxy Friday?
