GALXF - Galaxy Reports Lithium Production Record at Mount Cattlin
Shares of Galaxy Resources (ASX:GXY,OTC Pink:GALXF) closed up on Monday (May 13) after the lithium miner reported record production at its Mount Cattlin project in Western Australia.
In April, Galaxy’s spodumene project reached a monthly production volume of 21,901 dry metric tonnes of lithium concentrate, with an average final product grade of 5.92 percent lithium oxide compared to 5.75 percent lithium oxide in the first quarter of the year.
The increased production volume represents an annualized equivalent of over 260,000 tonnes — a jump from the company’s current target for the year of between 180,000 and 210,000 tonnes.
Since the start of 2019, Galaxy’s management has been focused on cost reduction and the efficient ramp up of the newly installed yield optimization circuits, Managing Director and CEO Anthony Tse said.
“This effort has resulted in the strongest month at Mount Cattlin, both in terms of production output and product quality, since the Mount Cattlin operations were recommissioned at the end of 2016,” he added.
During the second quarter, Galaxy’s production is expected to reach 45,000 to 50,000 dry metric tonnes of lithium concentrate, with shipment volume and sales forecasts set at the same level.
“Our customer base in China is linked to some of the top-tier lithium supply chain end users, demonstrating the broad acceptance and recognition of the consistency of the Mount Cattlin product,” Tse explained.
Cash costs of lithium concentrate production at Mount Cattlin in April were also lower, at US$329 per dry metric tonne compared to US$453 per dry metric tonne in Q1 2019.
As a result of the reduction in costs, Tse said Galaxy has a competitive advantage. “(It allows) the company to continue delivering a healthy operational cash margin, notwithstanding the recent softening of lithium feedstock and chemical pricing.”
In January, Galaxy upgraded Mount Cattlin’s resource by 42 percent. Total measured, indicated and inferred resources currently stand at 16.7 million tonnes at 1.28 percent lithium oxide grade containing 214,400 tonnes of lithium.
Aside from Mount Cattlin, the ASX-listed company is developing the Sal de Vida lithium brine project in Argentina and owns the James Bay lithium pegmatite project in Quebec, Canada.
On Monday, shares of Galaxy were up 1.55 percent, closing at AU$1.61 in Sydney.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.