-- Jiangsu Plant achieves record production month of 795 tonnes in
-- Total production for the September quarter at 2,040 tonnes
-- Sales volumes of 632 tonnes for September
-- Total sales volume for the September quarter at 1,816 tonnes
-- Record high monthly volumes of battery grade production and
-- Steady ramp up at Jiangsu Plant indicates sustained improvement
in production and sales
PERTH, Australia, Oct. 11, 2013 /CNW Telbec/ - Galaxy Resources Ltd (ASX: GXY)
("Galaxy" or "the Company") is pleased to announce its best ever production
and sales month at its Jiangsu Lithium Carbonate Plant ("Jiangsu").
In September, Jiangsu produced 795 tonnes of lithium carbonate, which is a
monthly production record high for the plant. Production volumes recorded for
the quarter were at 2,040 tonnes, a 15% increase quarter-on-quarter versus the
quarter ending June 2013. Importantly, 1,373 tonnes or 67% of volumes produced
in the September quarter were battery grade, which is a 95% improvement
quarter on quarter.
Sales volumes for the month of September were 632 tonnes, another monthly
record high. Sales orders achieved for the month were impacted by seasonality
in customer demand due to the Mid-Autumn Festival Holiday, and also the
weeklong National Day Golden Week Holiday in early October, when most
businesses and manufacturing operations in China close down. For the September
quarter total sales volume was 1,816 tonnes, representing a 9% increase
quarter-on-quarter versus the June 2013 quarter. Also significant, battery
grade sales continue to increase and now comprise 64% of total sales volume,
representing a 70% improvement quarter on quarter.
Galaxy Interim Managing Director Anthony Tse said that "the production and
sales records achieved for the month to complete the quarter were very
encouraging and indicated that strategies being implemented at Jiangsu to
improve operating efficiency were proving successful. The record production
and sales volumes for September and for the September quarter are a strong
indication that the ramp up at Jiangsu to achieve a positive operational cash
flow and steady state design production capacity is on track and progressing
The record tonnes produced by Galaxy in September demonstrates that the ramp
up and efficiency strategies that the new management team have introduced at
the Jiangsu plant are having a positive impact on production levels,
particularly given the sustained and steady increases seen over recent months.
We are firmly on track to achieve our aim at least a cash-flow break even
status at Jiangsu this year and the robust demand for Jiangsu's product and
improving production results further underpin our ability to achieve this,"
said Mr Tse.
The record September rate represents an annualised production rate of
approximately 9,600 tonnes per annum, which is close to 60 per cent of the
plant's nameplate production capacity of 17,000 tonnes per annum of lithium
carbonate. At full production Jiangsu has the potential to generate
annualised revenues in excess of US$100 million.
These significant milestones follow the completion of Galaxy's successful
raising of $37.5 million under the recent entitlement offer. Funds received
from the entitlement offer have been used to commence certain debt reduction
initiatives, with US$5 million of Chinese bank debt repaid recently.
Discussions continue regarding further reductions in outstanding corporate
liabilities in accordance with the restructuring plan previously agreed with
the convertible bondholders.
"With a strengthened balance sheet and record production and sales results
achieved in September, the Company is now in a much stronger financial
position with a positive outlook" said Mr Tse.
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 Email:firstname.lastname@example.org
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