Impairment strikes Galaxy profit
PERTH (miningweekly.com) – ASX-listed lithium miner Galaxy Resources has seen revenues halved during the year ended December, while the miner swung to a loss.
Revenue for the year ended December reached $69.5-million, down from the $153.9-million reported in the previous financial year, as Galaxy reported a loss after tax of $283.7-million, compared with a profit of $150.2-million in 2018.
Galaxy on Friday said that the loss included a writedown of inventory of $23.6-million at its Mt Cattlin operation, in Western Australia, as well as an impairment of property, plant and equipment of a further $188.9-million for Mt Cattlin, and a de-recognition of deferred tax assets of $33.3-million.
Meanwhile, revenue for the full year was impacted by lower spodumene prices and a 17% decrease in volumes sold, which reached 132 687 t at the end of December, compared with the 159 255 t sold in the previous financial year, with the average selling price for spodumene declining by 46%, from $927/t to $502/t.
However, Galaxy noted that 2019 was a record-breaking year in terms of production from Mt Cattlin, with total lithium concentrate production up 22% on the previous financial year, to 191 569 t.
In response to customer demand, the Mt Cattlin operation also had a major focus on improving final product quality in 2019, with the average grade of lithium sold increasing from 5.76% lithium oxide to 5.93%.
For 2020, Galaxy is targeting a lithium concentrate production volume of between 90 000 t and 105 000 t, following the restart of operations in February this year. This forecast production is in addition to the existing stockpiles of some 65 000 t, that will be sufficient to meet Galaxy’s contracted obligations to existing customers in 2020, as well as indicated demand from other potential new customers.
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