Galaxy Resources Limited (ASX: GXY) today provided an operational update at its Mt Cattlin Project in Ravensthorpe, Western Australia. Following the completion of the Yield Optimisation Circuits in Q1 2019, the project reportedly delivered record monthly production output and improved final product quality for the month of April.
In the announcement dated 13 May 2019, Galaxy Resources announced that the record monthly production volume was 21,901 dry metric tonnes of lithium concentrate for April 2019, representing an equivalent annualised run rate of over 260,000 dmt.
The production figures highlight strong operational execution and ramp up of performance that reached to an average final product grade of 5.92% Li2O compared to 5.75% Li2O in Q1 2019. Overall plant recovery was 61% compared with an average 51% reported in the first quarter of 2019.
Commenting on Mt Cattlin operations in April 2019, Galaxy’s Chief Executive Officer and Managing Director, Anthony Tse said “Following a comprehensive review of operations in the latter part of 2018, the team at Mt Cattlin focused on operational improvements and an efficient ramp-up of the newly installed YOP throughout the start of 2019. Management has concentrated on cost reduction, together with the YOP efficiency and I am pleased to report that this effort has resulted in the strongest month at Mt Cattlin, both in terms of production output and product quality, since the Mt Cattlin operations were recommissioned at the end of 2016.”
GXY’s customer base is backed by some of the top-tier lithium supply chain end users in China, demonstrating the strong company’s relation with partners and wide-acceptance of the Mt Cattlin product. The company is setting the bar high with a high-grade product at low cost, notwithstanding the recent softening of lithium feedstock and chemical pricing. Cash cost per tonne of lithium concentrate produced recorded at US$329/dmt compared to US$453dmt reported in Q1 2019.
Mr Tse stated that besides quality, the continued reduction in unit production costs has provided a competitive edge to Galaxy Resources, allowing the company to consistently deliver a healthy operational cash margin.
Going forward the company aims to continue focus on maintaining Mt Cattlin as high quality, lowest cost, lithium concentrate producers in Western Australia. The company reaffirmed its production guidance at 45,000 dmt to 50,000 dmt of lithium concentrate for Q2 2019. Shipment volume and sales guidance has been set to 45,000 dmt to 50,000 dmt of lithium concentrate for the same period.
Galaxy Resources also notified about the BlackRock Group ceasing to be a substantial holder in GXY with effect from 2 May 2019.
GXY stock price has edged up by decent 3.106% in the morning session to trade at $1.660 as at 13 May 2019 (12:52 PM AEST). The stock is trading at a price to earnings multiple of 3.080x with a market capitalisation of $656.11 million.
Over the past 12 months, the stock has declined by 49.69% including a negative price change of 17.65% recorded in the last three months.
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