PERTH (miningweekly.com) – Lithium miner Galaxy Resources has announced across-the-board cost-cutting while bringing its Jiangsu plant back to full production, and starting production at its Sal de Vida brine project.

Following last week's capital raising of A$37.3-million, Galaxy said on Monday that it was now focused on driving production levels at its Jiangsu plant, in China, as well as cost reductions, in an effort to achieve a break-even cash flow status by year-end.

Production levels at Jiangsu are currently increasing towards nameplate capacity of 17 000 t/y following its restart from the November 2012 incident, which claimed the lives of two workers.

The company appointed Deutsche Bank as corporate adviser to assist with a strategic cost reduction review, and has implemented a retrenchment programme for certain personnel, with a 50% reduction in corporate office headcount.

“We will concentrate on maintaining strong financial discipline and ensuring that cost control is a principal strategic objective. Sadly, this means that we have had to make some headcount reductions in the Perth office,” said acting MD Anthony Tse.

In the meantime, the miner would also look at the most optimal way to develop its Sal de Vida brine project, in Argentina.

Tse noted that the company had received strong feedback from both current and new institutional investors regarding the Sal de Vida development, which has been labelled an “important initiative” for the future value enhancement of Galaxy.

The project’s definitive feasibility study indicated that it could deliver $215-million in operation cash flow and revenue, and would have a pre-tax net present value of $645-million and an internal rate of return of 23%.

Tse said that Galaxy’s focus would now be on ensuring the right development structures and partners were in place for the project, and that the financial and technical analysis of the project was disciplined in order to successfully take the project through to construction and production.

The Sal de Vida project will require a capital investment of some $369.2-million, to support production of 25 000 t/y of battery-grade lithium carbonate and 95 000 t/y of potash, over 40 years.