Name of the Project
Sal de Vida lithium project.

Location
The project is located in the Puna region of Argentina, an area that is part of the lithium triangle that borders Chile and Bolivia.

Client
Galaxy Resources.

Project Description
An update to Galaxy Resources’ definitive feasibility study (DFS) on its Sal de Vida lithium project has reaffirmed the strong potential for a low-cost and long-life operation.

The mineral reserve estimate of 1.1-million tonnes of recoverable lithium carbonate equivalent and 4.2-million tonnes of potassium chloride (potash or KCI) equivalent for the project supports production of 25 000 t/y of battery-grade lithium carbonate and 95 000 t/y of potash over 40 years.

The DFS has been modelled on an operation with production at these levels, assuming an initial three-year ramp-up for lithium carbonate production to achieve full capacity, with potash production assumed to be deferred by one year for production start, with a two-year ramp-up to achieve its planned production capacity.

Total production is expected to be derived from proven (16%) and probable (84%) reserves.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The revised DFS estimates a post-tax net present value, at an 8% discount rate, of $1.42-billion, compared with the 2013 DFS value of $565-million.

In the revised DFS, the post-tax internal rate of return is estimated at 34.6%, compared with the 2013 DFS figure of 19%. Payback has been reduced from four years and seven months to two years and ten months.

Value
The updated DFS estimates the project’s capital cost at $376-million, compared with $369-million in the 2013 DFS.

Duration
The project is expected to take two-and-a-half years to build.

Latest Developments
Galaxy Resources has confirmed the appointment of JP Morgan as its financial adviser to evaluate what it has called ‘strategic options’ for its Sal de Vida project.

The confirmation follows a media report that has suggested Galaxy is considering divesting of a noncontrolling interest in the project, worth up to $350-million, through an offtake agreement.

Several parties have expressed an interest in the project, including Chinese majors and Korea’s steel giant Posco, according to newspaper The Australian.

While not confirming the media report, Galaxy has told shareholders that the company is in discussions with a range of parties with regard to potential offtake and strategic partnership opportunities.

However, the company has noted that these discussions are preliminary in nature and that there is no certainty that a definitive transaction will eventuate.

Galaxy is expected to release an updated definitive feasibility study this month.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Galaxy Resources, tel +61 8 9215 1700, fax +61 8 9215 1799 or email info@galaxylithium.com.