Lithium miner Galaxy Resources has announced plans to raise AUD161m ($117m) to advance two of its lithium projects in Argentina and Canada.

The company is undertaking an equity financing, the proceeds of which will be applied to the Stage 1 development of Sal de Vida, Galaxy’s wholly-owned lithium brine project in Argentina, with capital also being used to fund pre-development activities at the wholly-owned James Bay lithium pegmatite project in Quebec, Canada.

The financing is expected to position Galaxy to meet its existing development timeline for Sal de Vida and progress James Bay to construction-ready status.

New shares in Galaxy Resources will be issued at a discount. The company said that successful completion of this financing will deliver funding certainty so that progress may be made with Sal de Vida, mitigating the pricing uncertainty of alternative funding routes caused by the Covid-19 pandemic.

Sal de Vida

Galaxy Resource’s flagship project, Sal de Vida, is located in the Catamarca Province, Argentina, an established mining jurisdiction in the lithium triangle – the region in South America that accounts for around 40% of the world’s lithium.

Galaxy touts the project’s large scale, high grade, low impurity brine chemistry, and ease of extraction as making the site an attractive prospect for a long-life, low-cost lithium operation. Sal de Vida has a JORC-compliant ore reserve estimate of 1.1Mt of retrievable lithium carbonate equivalent (LCE), and 4.9t of LCE in mineral resources.

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By GlobalData

Galaxy initially envisioned Sal de Vida as being developed in a single stage, employing a conventional evaporation flowsheet to produce battery-grade lithium carbonate at the site, as well as potash as a by-product. In 2019, however, the plans were changed to develop the site in stages and developed a new evaporation flowsheet that Galaxy claims will optimise recovery, product quality, sustainability, as well as capital and operating costs. The new plans drop the plans to produce potash, with this allowing for a faster evaporation cycle and smaller evaporation ponds.

Galaxy is targeting first production at Sal de Vida in 2022 and expects that the equity financing will enable the project to meet that target despite the impacts of Covid-19. Subsequently, Stage 2 will double production and Stage 3 will involve constructing a downstream purification facility at an offsite location to upgrade the primary grade product to battery-grade lithium carbonate.

On the announcement of the equity financing plans, Galaxy Resources CEO Simon Hay said: “This equity financing provides Galaxy with an enhanced level of certainty to commit to execute and develop Sal de Vida into a successful, lowest-quartile cost lithium brine operation. Securing this funding for Stage 1 would allow us to confidently proceed into the early works phase, contract long lead items and complete pond construction in 2021 during the weather window.”

James Bay

Galaxy Resources describes its James Bay project as providing strong expansion potential into the North American market. The project comprises five sets of claim blocks with a defined mineral resource of 40.3Mt at 1.4% lithium oxide. Galaxy has completed modelling that indicates the deposit would be amenable to open-pit extraction, and the site is close to local infrastructure.

In March 2019, the company signed a pre-development agreement with the Cree Nation Government and the Cree Nation of Eastmain with regards to the James Bay project. The Cree Nation of Eastmain is located 130km from the site and is home to more than 800 members of the indigenous Cree Nation.

Galaxy anticipates that James Bay will provide the company with additional expansion capacity to capitalise on future growth in lithium demand.

“With EV demand continuing to rise in Europe and North America, we will also accelerate James Bay to a construction-ready status as these regions seek to localise raw materials supply or build-out lithium chemicals capacity,” Hay said. “We will utilise these funds to advance and execute the development of our world-class assets and ultimately seek to contribute to supplying the expected global demand surge in lithium.”