Lithium miner Galaxy Resources will reduce the number of workers at its Perth head office by 50 per cent as the company continues cost-cutting measures.
Galaxy said the cuts would save it $1.1 million a year.
Galaxy interim managing director Anthony Tse said the company was undertaking a comprehensive strategic review to assess reductions in corporate and other overhead costs.
“Sadly this means that we have had to make some head count reductions in the Perth office,” he said.
The company also announced its recent $37.5 million raising would allow it pay debt and boost working capital.
The company plans to ramp up production at its Jiangsu lithium plant in China and pursue the future development of its Sal de Vida brine project in Argentina.
“Galaxy is now driving production levels and cost reduction initiatives at Jiangsu to achieve break-even cash flow status this year,” the company said.
“The company is now in a position to recommence detailed analysis of the best structure technically and financially to pursue the future development of the Sal de Vida brine project.”
Galaxy’s definitive feasibility study for Sal de Vida, completed in April, indicated that the project had potential annual revenues of about $US215 million and operating cash flow before interest and tax of $US118 million.
Galaxy said demand for lithium was growing, spurred on by the consumer electronics sector.
“The company will now focus on ensuring the right development structures and partners are in place for the Sal de Vida Project, and ensure that analysis of the project both technically and financially is disciplined in order to successfully take the project through to the construction and production phase,” Galaxy said.
Earlier this year the miner announced plans to cut salaries as it tried to raise nearly $50 million in order to boost capital and pay down debts.
In a letter to shareholders in May, the company announced its board and senior management will take significant pay cuts in an attempt to cut costs by $10 million over two years.