Galaxy to become major shareholder of Alliance Mineral Assets

Image: Alliance Mineral Assets

Galaxy Resources will emerge as the largest shareholder in Alliance Mineral Assets following the latter’s announcement of a $32.5 million raising.

The raising will be split between a $22.5 million share placement with Galaxy Resources and a $10 million conditional placement with Jiangte subsidiary Weier, a German motor and generator specialist.

Alliance revised a lithium offtake agreement with a Jiangte joint venture company in January in keeping with plans to develop into a downstream supplier to China.

Funds from the raising will be used for continued upgrade works and future exploration at Alliance’s flagship Bald Hill lithium and tantalum mine in the Eastern Goldfields, Western Australia. Galaxy and Jiangte will pay 30 cents per share for 112.5 million and 50 million Alliance shares, respectively.

Galaxy’s shares will be issued on May 31, with Jiangte’s to follow in June or July, subject to shareholder approval.

“Investment by Jiangte and Galaxy Resources, who are both experienced participants in the lithium sector, is a recognition of, and testament to, our achievements and position in the market,” Alliance managing director Mark Calderwood said.

“The placements will enable us to rapidly advance both our plant upgrade and our exploration activities with the aim of upgrading our resource base concurrently with proposed increased production rates.”

Galaxy Resources chairman Martin Rowley said the company looked forward to sharing its “Mt Cattlin experience” with Alliance in reference to the company’s lithium operation north of Ravensthorpe, Western Australia.

Mt Cattlin has continued to grow this year following a resource upgrade in January. Galaxy posted a production record for the site by producing nearly 22,000 tonnes of lithium spodumene in April, equivalent to an annualised rate of over 260,000 tonnes against Galaxy’s annual target of 180,000-210,000 tonnes.

“Galaxy has been a minority shareholder of Alliance for some time, and we welcome this opportunity to increase our holding and become the largest individual shareholder in Alliance,” Rowley said.

“Galaxy recognises that the Bald Hill mine produces high quality spodumene concentrates and believes that the tenements surrounding the existing Bald Hill mine operations hold substantial value potential that may be unlocked through further targeted exploration and work on resource delineation.”

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