Galaxy to use purification technology at Sal De Vida

Highlights

• Galaxy to use patented purification technology to produce battery grade lithium carbonate at Sal de Vida
  
• Technology successfully proven at Jiangsu Lithium Carbonate Plant, China
  
• Battery grade lithium carbonate commands significant price premium versus technical grade
  
• Technology application included within DFS models and flow sheets
  
• Galaxy will be the first company in the South American lithium space to produce battery grade product
  from the salar site
  

PERTH, WESTERN AUSTRALIA, Sept. 23, 2012 /CNW Telbec/ - Lithium producer Galaxy Resources Ltd (ASX: GXY) ("Galaxy" or "the Company") advises it is to utilise its own patented purification technology at the recently acquired Sal de Vida lithium and potash brine project ("Sal de Vida" or "the Project") in Argentina to produce battery grade lithium carbonate.

The purification technology is used to upgrade lithium carbonate's purity to 'battery grade' (99.5% purity, or above) meaning it can be used by battery cathode producers for the manufacture of lithium-ion batteries. Because of its high value application, battery grade lithium carbonate receives a significant price premium to more common technical grades.

Galaxy developed and patented the purification technology in 2010 and has successfully proven the technology at its wholly-owned Jiangsu Lithium Carbonate Plant ("Jiangsu Plant" or "Jiangsu") in China. Jiangsu's lithium carbonate met all battery grade specifications in July 2012 and initial sales of battery grade lithium carbonate have commenced.

Galaxy plans to develop a battery grade lithium carbonate plant at the recently acquired Sal de Vida site, which will mirror the purification plant design at Jiangsu. Galaxy's purification technology is designed to be applied to either hard rock or brine based lithium carbonate production processes. A Definitive Feasibility Study currently underway on Sal de Vida will incorporate utilisation of the purification technology in its flow sheet.

Galaxy Managing Director Iggy Tan said Galaxy's technology will enable it to become the first lithium company in South America to produce battery grade lithium carbonate directly from the salar site.

"Currently, South American brine lithium producers have to upgrade their lithium carbonate to battery grade standard by sending the product off site or overseas. Using our purification technology, Galaxy will be the first company in South America to produce battery grade lithium carbonate product direct from a brine salar operation.

"We see the biggest future lithium demand coming from the lithium-ion battery sector. We believe we are already achieving one of the best quality battery grade products available in the market today," Mr Tan said.

The high quality Sal de Vida project is expected to become Galaxy's next flagship asset. Sal de Vida's potential production profile is 25,000 tpa of battery grade lithium carbonate, which would take Galaxy's annual lithium carbonate production to 42,000 tpa from 2016 onwards. Galaxy is continuing work on the development of Sal de Vida, although a final investment decision won't be made by the Galaxy Board until the Jiangsu Plant is generating positive cash flows on a sustained basis, expected Q1 2013.

Galaxy recently added number of lithium industry experts to its Sal de Vida team, including lithium industry veteran Dr Vijay Mehta, whose expertise is in the brine processing using solar energy and the production of high purity (battery grade) lithium carbonate, lithium hydroxide and anhydrous lithium chloride.

As Galaxy's senior technical advisor on the Sal De Vida project, Dr Mehta believes the purification technology developed by Galaxy for its China plant has successfully produced one of the best grade lithium carbonate products on the global market to date.

According to Dr. Mehta, Galaxy's lithium carbonate purification technology is able to be adapted to Sal de Vida's brine based lithium carbonate process. Galaxy expects to produce the best quality grade lithium carbonate directly from the salar operation.

About Galaxy (ASX: GXY)

Galaxy Resources Ltd ("Galaxy") is an Australian-based global lithium company with lithium production facilities, hard rock mines and brine assets in Australia, China, Canada and Argentina. The Company is an integrated lithium mining, chemicals and battery company listed on the Australian Securities Exchange (Code: GXY) and is a member of the S&P/ASX 300 Index.

Galaxy wholly owns the Mt Cattlin project near Ravensthorpe in Western Australia, which at full capacity can produce 137,000 tpa of spodumene concentrate as feed for the Company's wholly-owned Jiangsu Lithium Carbonate Plant in China's Jiangsu province. The Jiangsu Plant has commenced production and at full capacity will produce 17,000 tpa of battery grade lithium carbonate making the facility the largest producer in the Asia Pacific region and the fourth largest in the world.

Galaxy is also advancing plans to develop the Sal de Vida (70%) lithium and potash brine project in Argentina situated in the lithium triangle (where Chile, Argentina and Bolivia meet) which is currently the source of 60% of global lithium production.

The Company also owns the James Bay (100%) spodumene project in Quebec, Canada.

Lithium compounds are used in the manufacture of ceramics, glass, electronics and are an essential cathode material for long life lithium-ion batteries used to power e-bikes and hybrid and electric vehicles. Galaxy is bullish about the global lithium demand outlook and is positioning itself to achieve its goal of being involved in every step of the lithium supply chain.

Caution Regarding Forward Looking Information.

This document contains forward looking statements concerning Galaxy.

Forward-looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors.  Forward-looking statements are inherently subject to business, economic, competitive, political and social uncertainties and contingencies.  Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking information provided by the Company, or on behalf of, the Company. Such factors include, among other things, risks relating to additional funding requirements, metal prices, exploration, development and operating risks, competition, production risks, regulatory restrictions, including environmental regulation and liability and potential title disputes.

Forward looking statements in this document are based on Galaxy's beliefs, opinions and estimates of Galaxy as of the dates the forward looking statements are made, and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments.

Not For Release in US

This announcement has been prepared for publication in Australia and may not be released in the U.S. This announcement does not constitute an offer of securities for sale in any jurisdiction, including the United States, and any securities described in this announcement may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer and that will contain detailed information about the company and management, as well as financial statements.

SOURCE Galaxy Resources Limited