Galaxy Strategy Update


    --  Successful $37.5 million raising strengthens balance sheet
    --  Global lithium demand continues strong growth
    --  Jiangsu ramp up continues as planned
    --  Focus on Sal de Vida as next stage of strategic development
    --  Retirement of US$4 million of Chinese bank debt
    --  Further $1.1 million in annual corporate cost reductions

PERTH, Australia, Sept. 23, 2013 /CNW Telbec/ - Galaxy Resources Ltd (ASX: 
GXY) ("Galaxy" or "the Company") is pleased to provide an update on ongoing 
strategic initiatives, following the successful raising of $37.5 million under 
the recent entitlement offer.

With the successful raising completed, Galaxy is now driving production levels 
and cost reduction initiatives at Jiangsu to achieve break-even cash flow 
status this year. The Company is now in a position to recommence detailed 
analysis of the best structure technically and financially to pursue the 
future development of the Sal de Vida brine project. With a strengthened 
balance sheet, the Company is also now in a much stronger financial position, 
allowing it to commence its debt reduction initiatives.

"As the proud owners of the largest lithium carbonate production facility in 
the Asia Pacific region and one of the best low cost lithium and potash brine 
projects in South America, and with the balance sheet now strengthened Galaxy 
can continue it's progress towards becoming a leader in the rapidly growing 
global lithium industry.

"Lithium demand growth remains robust, driven by strong fundamental demand. 
The consumer electronics sector continues to step up its demand, with each 
generation of mobile and portable devices having ever-larger energy storage 
capacities, while requiring ever-higher quantities and qualities of lithium 
battery materials. Technological developments in hybrid and electric vehicles 
continue to progress, along with accelerations in consumer adoption, as 
evidenced by significant sales growth from leading firms such as Tesla Motors 
with their Model S vehicle, as well as the market penetration of hybrid 
vehicles, which in 2012 attained a 3% share of all vehicles sold in the United 
States. Lithium market share of other end user applications such as power tool 
and energy storage continue to grow. Governments around the world are 
increasingly recognizing the environmental and economic advantages inherent in 
moving to electric vehicles for a larger share of private and public 
transportation needs, with continued rollout of preferred policies, such as in 
China, the recent renewal of the 'New Energy Vehicle' subsidy scheme for new 
purchases of electric vehicles," Mr Tse said.

The Company confirms that production levels at the Jiangsu Lithium Carbonate 
Plant ("Jiangsu Plant") continuing to increase according to the recent 
timetable advised to the market, and the Company remains confident of 
achieving a cash flow break-even status 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$100 million.

Funds received from the entitlement offer have been used to commence certain 
debt reduction initiatives, with US$4 million of Chinese bank debt now repaid. 
Discussions will continue regarding possible further reductions in outstanding 
corporate liabilities, which is in line with the restructuring plan as 
previously agreed with the convertible bondholders.

Galaxy's Corporate Adviser, Deutsche Bank, has been assisting the Company in a 
comprehensive strategic review to assess reductions in corporate and other 
overhead costs. Recently, the Company has implemented certain personnel 
retrenchment with a 50% reduction in corporate office headcount, which will 
reduce a further $1.1 million from its annualized corporate costs, as part of 
its ongoing focus to deliver a robust financial structure. Full redundancy 
entitlements have been met for departing staff.

"We will concentrate on maintaining strong financial discipline and ensuring 
that cost control is a principal strategic objective. Sadly this means that 
we have had to make some head count reductions in the Perth office." Mr Tse 
said

Galaxy will also now be looking at the optimal way of developing the Sal de 
Vida Lithium and Potash Brine Project ("Sal de Vida") which is situated in the 
northern part of Argentina - in a region also known as the Lithium Triangle, 
where Chile, Argentina and Bolivia meet, and which presently accounts for 60% 
of global lithium production. Sal de Vida has excellent potential as a low 
cost lithium and potash from brine facility.

The Company has received strong feedback from both current large investors and 
new institutions joining the Company in the recent capital raising that, with 
strong and sustained, profitable operations at Jiangsu, the future development 
of the Sal de Vida Project is an important initiative strategically in the 
further value enhancement of Galaxy.

Galaxy's Definitive Feasibility Study for Sal de Vida, completed in April this 
year, indicated that the project had potential annual revenues of ~US$215 
million & operating cash flow before interest and tax of US$118 million. A 
pre-tax (Net Present Value (NPV) at a 10% discount rate, was estimated at 
US$645 million, representing an IRR of 23%, and a post-tax NPV at a 10% 
discount rate was estimated at US$380 million, representing an IRR of 19%.

The Company will now focus on ensuring the right development structures and 
partners are in place for the Sal de Vida Project, and ensure that analysis of 
the project both technically and financially is disciplined in order to 
successfully take the project through to the construction and production 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, 
Canada.

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 Email:ir@galaxylithium.com 
 Media Contact Shane Murphy FTI Consulting Tel (office): +61 (0) 8 9485 
8888 Tel (mobile): + 61 (0) 420 945 291 Email:shane.murphy@fticonsulting.com  
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