Shortfall placement brings total capital raising to $37.5 million

Shortfall placement brings total capital raising to $37.5 million 

    --  Galaxy successfully raises an additional $20.3 million,
        following well received site visit from institutional
        investors, high net worth private investors and broker dealers
    --  This brings the total raise from the entitlement issue and
        shortfall placement to $37.5 million which is over three times
        the minimum subscription of the Rights issue
    --  With this significant working capital position, Galaxy now has
        the capacity to pursue initial debt reduction initiatives
    --  Operations at Jiangsu continue to track positively

PERTH, Australia, Sept. 19, 2013 /CNW Telbec/ - Galaxy Resources Ltd (ASX: 
GXY) ("Galaxy" or "the Company") is pleased to advise that a further amount of 
$20.3 million has been raised as proceeds under the shortfall component of the 
pro-rata non-renounceable entitlement offer (Entitlement Offer).

Galaxy has now raised a total of $37.5 million since 1 July 2013, which 
includes some funds raised from listed options expiring 31 December 2014 
already being exercised. The additional $37.5 million raised includes a $3.5 
million conversion of a short-term loan facility into equity and options.

During the course of the Entitlement Offer the Company has been and continues 
to engage with certain large Strategic investment institutions in respect of 
subscribing for a substantial equity position in the Company. As such the 
Company intends to set aside the entire remaining $9.2 million shortfall block 
for these ongoing discussions.

The proceeds from the raisings to date will be used for partial debt pay down 
to Chinese lenders, working capital for the Jiangsu Lithium Carbonate Plant 
(Jiangsu) in China and the Sal de Vida Lithium Brine and Potash Project (Sal 
de Vida) in Argentina and to pay costs associated with the raisings.

Galaxy Interim Managing Director Anthony Tse said that the significant 
improvement in Galaxy's balance sheet and capital position since the launch of 
the Entitlement Offer was very pleasing.

"With over $37.5 million raised, or over three times the minimum subscription 
level under the Entitlement Offer, we have been able to make significant 
improvements in the company's financial position. Importantly, as well as 
the receipt of additional capital we have been successful in negotiating 
significant improvements in the structure of both the Chinese bank debt and 
convertible bonds. This is an area we are continuing to work upon, and will 
make further progressive improvements, as we pursue debt reduction 
initiatives," Mr Tse said.

Now that in excess of $35 million has been raised, we have the capacity to 
pursue additional debt reductions in line with the convertible bond 
restructuring plan previously agreed with the bond holders.

I was also very pleased to recently host a visit to Jiangsu from several 
institutional investors, interested private investors and Australian brokers 
from which we have received very positive feedback best evidenced by a number 
of them participating in this shortfall placement. Jiangsu is clearly the 
company's most significant producing asset, with a steadily improving 
production and operating profile. All visitors seem to always come away with a 
favourable impression.

"Alongside our shareholders who participated in the Entitlement Offer, I would 
like to welcome these new institutional investors investing with us and I look 
forward to their long and healthy association with Galaxy. We also note that 
our Chairman Mr. Craig Readhead, has committed to subscribe $365,000 in 
shares, and a general meeting of shareholders to approve this issue will be 
convened as soon as practicable. The Company is focused on initiatives that 
will continue to strengthen our financial position, and drive growth in our 
business operations at Jiangsu, as well as enhancing value in our other 
principal assets such as Sal de Vida and Mt Cattlin - all with a view to 
creating and maintaining long term shareholder value," Mr Tse said.

The ramp-up of Jiangsu continues to progress with the focus on achieving full 
production capacity. A full update on operations will be contained in the 
regular September Quarter Activities and Production report (as per ASX Listing 
Rule 5.2). Production run rates continue to improve with current month 
production run rate in excess of 50% of nameplate capacity. The Company 
remains confident of reaching a cash flow break even status at the Jiangsu 
operation later this year.

The Jiangsu Plant has a nameplate production capacity of 17,000 tonnes per 
annum of lithium carbonate, which at full production has the potential to 
generate annualized revenues in excess of US$100m. Galaxy is targeting 
reaching full production rates in the early part of 2014. At this level of 
production, Galaxy would become the largest capacity producer of battery grade 
lithium carbonate in the Asia Pacific region.

Galaxy has also now received the final approval document for Jiangsu from the 
Administration of Environmental Protection of Jiangsu province. The Company 
previously was awarded the approval for safety and occupational health from 
the Suzhou Municipal and Jiangsu Provincial Safety Bureaus. The entire project 
regulatory approval process has now been concluded.

Discussions remain ongoing with respect to project funding and development 
options for the company's core Sal de Vida project. The Company's focus with 
respect to Sal de Vida is ensuring the right development structures and 
partners are in place to successfully take the project from the study to 
construction phase.

About Galaxy (ASX: GXY)

Galaxy Resources Ltd ("Galaxy") is an Australian-based global lithium company 
with lithium production facilities, hard rock mines and brine assets in 
Australia, China, Canada and Argentina. The Company is a lithium producer 
listed on the Australian Securities Exchange (Code: GXY).

Galaxy has built an advanced and fully-automated Lithium Carbonate production 
facility in Jiangsu Province, China ("Jiangsu Plant"). The Jiangsu Plant has a 
name-plate capacity of 17,000 tpa, is primarily focused on producing battery 
grade lithium carbonate, and is aiming to become the largest producer in the 
Asia Pacific region and the fourth largest in the world.

Galaxy is currently advancing plans to develop the Sal de Vida Lithium and 
Potash Brine Project ("Sal de Vida") in Argentina, which is situated in the 
Lithium Triangle, a region where Chile, Argentina and Bolivia meet, and 
presently accounts for 60% of global lithium production. Sal de Vida has 
excellent promise as a future low cost production facility.

The Company also owns the Mt Cattlin Spodumene Mine near Ravensthorpe in 
Western Australia and the James Bay Lithium Pegmatite Project in Quebec, 

Lithium compounds are used in the manufacture of ceramics, glass, electronics 
and are an essential ingredient in producing battery materials such as cathode 
and electrolyte, in the manufacture of long life lithium-ion batteries, which 
are used in consumer electronics, power tools, electric bikes, hybrid and 
electric vehicles. Anticipating the growing demand in coming years, Galaxy is 
positioning itself to become a major producer of lithium products.

Caution Regarding Forward Looking Information.

This document contains forward looking statements concerning Galaxy.

Forward-looking statements are not statements of historical fact and actual 
events and results may differ materially from those described in the forward 
looking statements as a result of a variety of risks, uncertainties and other 
factors. Forward-looking statements are inherently subject to business, 
economic, competitive, political and social uncertainties and contingencies. 
Many factors could cause the Company's actual results to differ materially 
from those expressed or implied in any forward-looking information provided by 
the Company, or on behalf of, the Company. Such factors include, among other 
things, risks relating to additional funding requirements, metal prices, 
exploration, development and operating risks, competition, production risks, 
regulatory restrictions, including environmental regulation and liability and 
potential title disputes.

Forward looking statements in this document are based on Galaxy's beliefs, 
opinions and estimates of Galaxy as of the dates the forward looking 
statements are made, and no obligation is assumed to update forward looking 
statements if these beliefs, opinions and estimates should change or to 
reflect other future developments.

Not For Release in US

This announcement has been prepared for publication in Australia and may not 
be released in the U.S. This announcement does not constitute an offer of 
securities for sale in any jurisdiction, including the United States, and any 
securities described in this announcement may not be offered or sold in the 
United States absent registration or an exemption from registration under the 
United States Securities Act of 1933, as amended. Any public offering of 
securities to be made in the United States will be made by means of a 
prospectus that may be obtained from the issuer and that will contain detailed 
information about the company and management, as well as financial statements.

SOURCE  Galaxy Resources Limited 
Corporate  Andrew Meloncelli Company Secretary Galaxy Resources Ltd 
Tel (office): +61 (0) 8 9215 1700 
Media Contact Shane Murphy FTI Consulting Tel (office): +61 (0) 8 9485 8888 
Tel (mobile): + 61 (0) 420 945 291 
To view this news release in HTML formatting, please use the following URL: 
CO: Galaxy Resources Limited
-0- Sep/19/2013 02:17 GMT
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