Emerging lithium producer, Galaxy Resources Limited (ASX:GXY) (PINK:GALXF), is pleased to provide a finance update as it progresses the development of its Mt Cattlin Spodumene Project and the Jiangsu Lithium Carbonate Plant.
Following the transfer of the Debt Facility Agreement from Creat to an independent syndicate of banks comprising Austrian Bank RZB and China Development Bank in November, Galaxy achieved the first of three drawdowns to the value of US$20 million.
The Company is currently working with its finance partners and legal representatives on loan and security arrangements and expects the documents to be finalised in time for the second US$40 million drawdown in April 2010. The final drawdown of US$45 million is scheduled for November 2010.
Galaxy Resources Managing Director, Mr Iggy Tan, said the Company, with a current cash balance of A$80 million, is in a strong position to continue expediting the development of its projects.
"The Company’s debt position is complemented by the A$33.5 million equity funding package provided by private Chinese investment firm Creat Group Company Limited.
Creat Group has nominated its Alternative Investment Market (AIM) listed subsidiary Creat Resources (CRHL) to participate in the placement which has been staged to accommodate the investment structure of CRHL.
The first stage of the placement, comprising A$6 million was received from CRHL on 16 December 2009. Mr Tan said the second and final tranche of the placement of A$27.5 million was expected to be completed in early April 2010 once the AIM compliance requirements have been completed.
"Galaxy shareholders overwhelmingly ratified the first placement and approved the second placement at General Meeting held on 10 February 2010," he said.
"The Company will still maintain a cash buffer of around A$52m on start up of both projects, after the loan facility is fully drawn down and project financed" Mr Tan said.
Galaxy Resources (ASX: GXY) is an emerging mining and chemical company focusing on lithium and tantalum production. Galaxy is at an advanced stage of developing its Mt Cattlin Lithium Project (hard rock spodumene) in Ravensthorpe, Western Australia. The Project encompasses a mine and minerals plant which will produce 137,000 tpa of 6% Li2O spodumene concentrate. Galaxy intends to add value to the Mt Cattlin Project by establishing its own downstream lithium processing facilities in China.
The Company is finalising plans to establish a lithium carbonate chemical facility in Jiangsu Province, producing 17,000 tpa of lithium carbonate.