Galaxy Resources lifts resource estimate; Will it light up the shares?

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Summary

  • Galaxy Resources (ASX:GXY) on Wednesday said that it had raised resource estimates at its Sal de Vida project.
  • The lift in estimates following new wellfield drilling in the east sub-basin, which started in late 2020.
  • The drilling had commenced with an aim to build eight more production wells for the Sal de Vida project.

Galaxy Resources Ltd (ASX:GXY) on Wednesday said that it had raised resource estimates at its Sal de Vida project. The lift in estimates following new wellfield drilling in the east sub-basin, which started in late 2020. The drilling had commenced with an aim to build eight more production wells for the Sal de Vida project. The company said that the first two production wells have successfully been drilled, reamed, cased and pumps installed and tested.

Source: © Kustovalexey  | Megapixl.com

The lithium concentrations recorded were significantly higher than the average lithium resource grade of 754 mg/L and the reserve grade of 802 mg/L (for years 1-10), Galaxy said in its latest update. Wells SVWP20-08 and SVWP20-04 returned average lithium concentrations of 911 mg/L and 955 mg/L respectively.

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Drilling results from the initial two production wells led to a rise in Inferred Mineral Resources of 1.3Mt. The revised Mineral Resource estimate of 6.2Mt LCE (detailed in Table 2) reflects a 27 per cent increase to the prior Resource of 4.9Mt LCE.

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What company says

Commenting on the development, Chief Executive Officer, Simon Hay said that completion of the feasibility study marked a major milestone in the development of Sal de Vida. Technical and financial outcomes were very positive and confirm that Sal de Vida will be a globally competitive, low-cost producer of battery grade lithium carbonate, Hay added.

READ MORE: How is Rio Tinto progressing? A snapshot of latest developments

The company’s staged development approach provided a lower risk pathway to a large-scale operation again with compelling financial outcomes. The quality of the Hombre Muerto salar was further reinforced by the current wellfield drilling campaign and the company was excited about the potential upside that higher lithium brine grades would bring to the project, he noted.

Source: © Weinelm  | Megapixl.com

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Stock performance

On Tuesday, Kogan.com shares closed at A$3.26, up 0.14 points, or 4.49 per cent, against the previous closing on Monday. The stock has given a return of 41.1 per cent so far this year.

Some of the other major ASX-listed mining stocks include BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), Fortescue Metals Group Ltd (ASX: FMG), Evolution Mining Ltd (ASX: EVN) and Regis Resources Ltd (ASX: RRL)

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