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.

Jobs to be Created
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 will raise about A$61-million through a share placement to institutional and sophisticated investors to fund the development of its Sal de Vida and James Bay projects, in Brazil and Canada respectively.

About 113-million new shares, at a price of 54c each, will be issued through a private placement. The offer price represents a 9.2% discount to the company’s closing price on February 3.

The shares will be issued within the company’s placement capacity, and will not require shareholder approval.

The  proceeds of the placement, as well as existing funds available to the company, will serve primarily to strengthen its balance sheet, increase financial flexibility to progresss the development work at the two projects and for general corporate purposes.

Meanwhile, Galaxy is expected to start site work at its Sal de Vida project before the end of this month.

Initial activities at the project will entail several initiatives, including the drilling of two 150-m-deep production wells to feed brine to an initial set of test evaporation ponds; drilling a third exploratory well to confirm an extended brine reservoir; the construction of a 9 km freshwater pipeline; the start of a continuous demonstration plant programme to produce commercial samples of lithium carbonate; and completing further topography and soil mechanics studies for test and commercial-scale evaporation pond locations.

A recently appointed engineering team will also advance project engineering across all different disciplines and a suite of training programmes will be initiated in several community locations to facilitate the employment of a local workforce.

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.