1. Most Discussed
  2. Gainers & Losers
GMM 65.5¢

Galaxy offloads Mt Cattlin project

  1. melinvest

    1,184 Posts.
    Galaxy offloads Mt Cattlin project

    Stuart McKinnon
    February 9, 2015, 8:28 am

    Galaxy offloads Mt Cattlin project

    UPDATE 1.30pm: General Mining will re-start Galaxy Resources' Mt Cattlin spodumene and tantalum project near Ravensthorpe under a three-year lease agreement.

    Under the terms of the deal, General Mining will pay Galaxy a $2.5 million annual lease fee and a 10 per cent production royalty over three years.

    It can elect to buy the project outright at any time during the three years, in exchange for $30 million and a 3 per cent net smelter royalty to Galaxy.

    The company plans to begin tantalum production at Mt Cattlin within six months.

    Galaxy chairman Martin Rowley said the agreement was in line with the company's new focus on reducing debt and realising value for its assets.

    "As well as the sale of the Jiangsu plant in China, management has been looking closely at ways of reducing fixed and overhead costs in order to preserve its cash resources and further strengthen Galaxy's financial situation," he said.

    "The proposed arrangement with General Mining at Mt Cattlin will result in these assets becoming a net cash generator instead of a loss to the company."

    General Mining said the deal was in the interests of both companies because of the "deep background" that its director, Michael Fotios, had in developing and operating tantalum mines in WA and in the specialised area of marketing tantalum-based products.

    "For disclosure purposes, Mr Fotios currently has a loan agreement in place to fund General Mining's ongoing operations," the company said in a statement.

    Galaxy put Mt Cattlin on care and maintenance in July 2012 because of delays with the ramp-up of its lithium processing plant in China, which it has since agreed to sell.

    Last week, Galaxy was forced to lower the asking price for the plant because Chinese buyer Sichuan Tianqi Lithium Industries baulked at the previously agreed $US230 million asking price. The new price has been wound back to $US173.2 million.

    However shares in Galaxy have been suspended while it looks to provide further clarity with respect to required regulatory approvals and expected timeframes for the sale.

    Galaxy shares last traded for 2.5 cents. General Mining shares soared 2.2 cents, or 733.33 per cent, to 2.5 cents at the close.

Before making any financial decisions based on what you read, always consult an advisor or expert.

The HotCopper website is operated by Report Card Pty Ltd. Any information posted on the website has been prepared without taking into account your objectives, financial situation or needs and as such, you should before acting on the information or advice, consider the appropriateness of the information or advice in relation to your objectives, financial situation or needs. Please be aware that any information posted on this site should not be considered to be financial product advice.

From time to time comments aimed at manipulating other investors may appear on these forums. Posters may post overly optimistic or pessimistic comments on particular stocks, in an attempt to influence other investors. It is not possible for management to moderate all posts so some misleading and inaccurate posts may still appear on these forums. If you do have serious concerns with a post or posts you should report a Terms of Use Violation (TOU) on the link above. Unless specifically stated persons posting on this site are NOT investment advisors and do NOT hold the necessary licence, or have any formal training, to give investment advice.


Thank you for visiting HotCopper

We have detected that you are running ad blocking software.

HotCopper relies on revenue generated from advertisers. Kindly disable your ad blocking software to return to the HotCopper website.

I understand, I have disabled my ad blocker. Let me in!

Need help? Click here for support.