Name of the Project
Sal de Vida lithium/potash project.

Location
The project is located on the Salar del Hombre Muerto, in north-west Argentina.

Project Owner/s
Galaxy Resources.

Project Description
An updated definitive feasibility study (DFS) has validated Sal de Vida as a technically superior, highly profitable long-life and low-cost lithium/potash project.

Sal de Vida plans to produce battery-grade lithium carbonate and potash products through the treatment of lithium-enriched brine from the Salar de Hombre Muerto.

The project has a Joint Ore Reserves Committee-compliant mineral reserve of 1.1-million tonnes of recoverable lithium carbonate equivalent and 4.2-million tonnes potassium chloride equivalent, supporting a long initial project life with production of 25 000 t/y of lithium carbonate and 94 000 t/y of potash.

The project has an estimated mine life of 40 years.

The project also holds significant potential for future upside from further resource definition and subsequent reserve upgrade.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an estimated post-tax net present value, at an 8% (real) discount rate, of $1.48-billion and an internal rate of return of 26.9%, with a post-tax payback of about three years from first production.

Capital Expenditure
Capital expenditure is estimated at $474-million, or $443-million excluding the potash circuit.

Planned Start/End Date
The DFS models an operation with an initial three-year ramp-up to full planned lithium carbonate production. Potash production is deferred for two years after the start of lithium carbonate production.

Latest Developments
Galaxy Resources has announced that it will close the joint venture (JV) process for its Sal de Vida project without a deal.

Through the second half of 2018 and early 2019, Galaxy conducted an evaluation of strategic JV opportunities to develop the project.

However, the company has said that, to date, it has not been able to agree on a transaction structure that will provide an ‘appropriate valuation basis’, which reflects the nature of the Sal de Vida asset, particularly given its $280-million deal with Korean major Posco over a package of tenements to the north of Salar del Hombre Muerto.

Galaxy has said that negotiations for a possible JV transaction are ongoing with a shortlist of interested parties; however, the company has resolved to formally close the process.

Given the prevailing market sentiment and the current weakness in short-term contract prices for lithium chemicals, Galaxy has opined that it is prudent to remain patient regarding any third-party transactions for the project, as the company remains confident in the underlying fundamentals of the lithium sector and the growth potential for the market, as well as the value of the asset.

The company has said that it will continue to progress the development of Sal de Vida to ensure that its value is unlocked and enhanced.

Galaxy will undertake a testwork programme during 2019 to focus on process optimisation and product qualification, and test a number of alternative, unconventional processing technologies.

Work has also started on energy generation options assessing the preferred mix of energy sources, as well as exploring capital efficiencies in the required infrastructure design and construction.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Galaxy Resources, tel +61 8 9215 1700, fax +61 8 9215 1799, or email reception@galaxylithium.com or info@galaxylithium.com.