Galaxy mulls partner for Sal de Vida Li project

Australia-based lithium mining firm Galaxy Resources expects to finalise a binding strategic partnership for the development of its Sal de Vida lithium brine project in Argentina by the end of this year.

Investment bank JP Morgan was appointed in the second quarter to find a strategic development partner and has co-ordinated site visits ahead of the receipt of binding bids by shortlisted bidders in November, Galaxy said in its July-September quarterly report.

A project plan for the development of Sal de Vida — which has a reserve of 1.14mn t of lithium carbonate equivalent — is being finalised, including the appointment of a project management consultant and an engineering and design phase in the first half of 2019.

Galaxy confirmed that South Korean steel producer Posco has paid $280mn less closing adjustment costs into an escrow account following its purchase of Galaxy's tenement package to the north of the Sal de Vida project. Transfer of the funds to Galaxy will take place once Posco has received land title deeds. These funds have been earmarked for the development of Sal de Vida.

At its Mount Cattlin mine in Western Australia, Galaxy said third-quarter lithium concentrate output fell by 35pc from the second quarter to 31,156t because of lower feed grades and reduced recoveries from delays in completing the Yield Optimisation Project. Sales were also 35pc lower at 29,555t. Output for the first three quarters of 2018 totalled 122,909t with sales of 119,574t to a offtake partners. Improvements in recoveries and production rates are expected from the first quarter of 2019.

The average cash margin from Mount Cattlin production fell to $411/t from $534/t in April-June because of higher unit costs as a result of lower production.

Environmental and social impact study work for a mine and concentrate facility at the James Bay hard rock lithium project in Quebec, Canada made further progress during the latest quarter, Galaxy said.