Lithium Miner Galaxy Resources Shares Positive Exploration Update For Mt Cattlin Project

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Lithium Miner Galaxy Resources Shares Positive Exploration Update For Mt Cattlin Project

 Lithium Miner Galaxy Resources Shares Positive Exploration Update For Mt Cattlin Project

As per the latest ASX announcement on 12 December 2018, Galaxy Resources Ltd (ASX: GXY) provided a major mineral exploration update for its Mt Cattlin Project at Ravensthorpe, Western Australia. The stock was up 5.8% post the announcement.

Approximately 25,555m of resource development drilling and grade control has been completed in support of mining operations at 543 new drill holes.

Of these, 108 drill holes for 12,275m were for resource development drilling with the objective to target infill in the northwest and northeast parts of the Mt Cattlin site as well as support mining approvals to extend mining operations east of Floater Road). Grade control drilling is targeted at current mining operations in the 2SW hole with activities now extending to east of Floater Road.

This drilling has demarcated a second layer beneath the known spodumene bearing deposits immediately to the north of the 2SW pit. With the receipt of regulatory nods, mining is shifting its target from the Dowling and 2SW pits to approved pits in the east of Floater Road. Initial grade control drilling has been completed to support this development. Further infill drilling is expected to begin in near term.

Incorporated in 1996, Galaxy Resources Ltd is involved in minerals exploration particularly lithium concentrates from the hard rock mines in Australia, Canada, and Argentina. The company’s wholly owned Mt Cattlin Project is currently involved in pegmatite ore mining and on-site production of lithium spodumene concentrate. Another significant project is The James Bay lithium pegmatite Project in Quebec, Canada focussing on open pit mineral extraction.

Galaxy recently struck an agreement with Posco to sell off northern tenements of Sal de Vida deposits in Argentina. The project constitutes one of the world’s major and highest quality undeveloped lithium deposit.

Lithium decreased to 114.62 points at the close of trading hours on 11th December 2013 from 115.34 points in the previous trading day.

Lithium miner, Galaxy’s stock has demonstrated poor performance this year reflecting a negative YTD return of -37.98%. However, post the mineral exploration update by the company today, shares are riding high at around $2.540 as compared to the previous close of $2.410.

The company anticipates spurt in global lithium demand, extensively used in the manufacturing of ceramics, glass, lithium batteries, mobiles, laptops, lubricants and many more products. Lithium-ion batteries, used to power e-bikes, vehicles and mass energy storage systems, have shown massive growth of 15-20%. The batteries contribute roughly 26% of global lithium demand.

Galaxy’s 1HFY18 depicts net margin of 13.0% in 1HFY18 as compared to the negative net margin of 43.3% in 1HFY17. While compared to a negative operating margin of 10.8% in 1HFY17, the operating margin has increased by 20.1%. With the market capitalization of $978.06 million and EPS of AUD 0.061, it reflects a price-earnings ratio of around 39.

The lithium exploration expansion, business development and market penetration plans of company aim at becoming leading lithium producer. Lithium investors should keep a close eye on the lithium stock performance of Galaxy.


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