Galaxy Resources Jumps On Acreage Sale
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Lithium miner, Galaxy Resources surprised yesterday by selling off some of its South American acreage, a move the market loved, sending the shares up 18% at one stage in trading before they settled back to close the day 14.3% higher at $3.42.
That’s the highest the shares have been since mid March. And investors took the news to mean that Galaxy won’t be returning to the market any time soon to raise extra funds for its exploration and development activities in Argentina, where the asset sale is located.
The source for the ‘joy’ was news that it had raised around $370 million from the sale of exploration ground in South America to the South Korean steel giant, Posco.
Galaxy also said that it plans to work together with Posco on future projects.
Galaxy is developing the Sal de Vida lithium and potash brine projects in Argentina, situated in the so-called lithium triangle where the country meets with Chile and Bolivia.
The area is currently the source of 60 per cent of global lithium production (for lithium ion batteries).
Galaxy also has lithium production facilities, hard rock mines and brine assets in Australia and Canada.
Lithium is a key ingredient in many types of batteries, and growth in the lithium mining sector has been fuelled by the rise of the electric vehicles market. Galaxy chairman Martin Rowley said in yesterday’s statement that the asset sale which are based in the northern basin of the Salar del Hombre Muerto in the north of Argentina will provide a “substantial cash injection” to the company.
Mr Rowley also said the transaction is strategically significant because there will now be two new lithium projects developed concurrently on the Salar del Hombre Muerto.
The disposal is subject to Posco board approval, which is expected during the third quarter of 2018.
Galaxy will keep the tenements in the southern area of Salar del Hombre Muerto in the Catamarca Province.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.