JOHANNESBURG (miningweekly.com) – Lithium company Galaxy Resources and its project partner General Mining have both asked the ASX to place their shares in a trading halt, resulting in speculation that the two companies are in talks about a potential corporate transaction.
Galaxy said in its request for a trading halt that it intended to make an announcement about a “potential corporate transaction involving an acquisition”. General Mining stated that it would make an announcement in relation to a “potential corporate control transaction”.
The trading halt of both companies would remain in place until Monday, or earlier, if announcements were made to the market.
Galaxy and General Mining are joint venture (JV) partners in the Mt Cattlin spodumene project, in Western Australia, which the companies restarted earlier this year. General Mining has a A$25-million option to earn a 50% stake in the mine, which is expected to produce its first concentrate in July or August.
Mt Cattlin was placed on care and maintenance in July 2012, owing to high inventory levels of spodumene at Galaxy’s Jiangsu lithium carbonate plant, in China, which it used to supply.
The JV was targeting a throughput rate of 800 000 t/y by the end of June. Based on the current mineral resource and ore reserve estimates at Mt Cattlin, the project could deliver 11 500 t/y of spodumene over an initial 17-year mine life.
Last week, the JV partners announced that they had signed a binding offtake agreement for Mt Cattlin’s product, involving a Chinese buyer and General Mining’s exclusive selling and settlement agent, Tokyo-based Mitsubishi. The agreement was for the sale of 30 000 t of spodumene concentrate in 2016 at a price of $600/t.
Discussions were under way with another Chinese customer.