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- Lithium producer Galaxy Resources (GXY) has seen a slight share price dip today after releasing its December quarterly report
- The somewhat underwhelming report highlights activity from the Mt Cattlin, Sal de Vida, and James Bay projects
- Essentially, the company is moving along as expected after announcing a severe production slash last year
- Work seems to be tracking along at the slower side of expectations, however
- Nevertheless, the update seems to have kept investors’ minds mostly at easy
- Galaxy shares are trading slightly lower today, down roughly 1.5 per cent and worth $1.14
Lithium producer Galaxy Resources (GXY) has seen a slight share price dip today after releasing a somewhat underwhelming quarterly report.
Galaxy outlined some highlights of the quarter from its three core projects: Mt Cattlin, Sal de Vida, and James Bay.
Mt Cattlin, Western Australia
While the December quarter was Galaxy’s weakest in terms of total mining volume from Mt Cattlin, the grade of ore mined was above the 2019 average at 1.34 per cent lithium oxide.
Similarly, Galaxy processed less ore in the December quarter than the rest of the year, but a higher grade of ore was processed than the yearly average. Nevertheless, the company still mined and produced more ore than the year before, and at a higher average grade.
Of course, the lowered production and mining rates for the December quarter came as no shock to Galaxy shareholders, who were warned of the intentional reduction in October last year.
Galaxy said it would be slashing mining and production rates at Mt Cattlin in 2020 to conserve mineral resources until market conditions improve. The scale-down started in mid-December.
In terms of sales, Galaxy fell just short of its guidance for the December quarter. The company expected to sell between 30,000 and 45,000 dry metric tonnes (DMT) of lithium concentrate over the quarter, but the real figure came in a 29,770 DMT.
Mt Cattlin operations will be scaled back by roughly 60 per cent in 2020.
Sal de Vida, Argentina
Galaxy is continuing its project development at Sal de Vida.
While the company seemed content that everything at the Argentinian project is tracking along as expected, some subtle wording changes suggest the advancement of the project is on the slower side.
For example, the company said in its last quarterly it is targeting a final investment decision for stage one in the project for between the second or third quarter of 2020, with first production planned for 2022.
Today, however, Galaxy said it is targeting a final investment decision in “early H2 2020 based upon capital and operating cost estimates in the lowest respective quartiles”. While this, of course, is still within the initial quarter-two-to-quarter-three target, the latest update suggests the investment decision is progressing at a slower pace than expected.
Nevertheless, Galaxy said it has taken work to simplify processes at Sal de Vida once it is up and running through an optimised flowsheet.
James Bay, Quebec
The company is trying to optimise operations at James Bay through engineering work. As with Sal de Vida, no exploration work took place at James Bay, but Galaxy maintains the project is meeting deadlines and tracking along mostly as expected.
Overall, Galaxy’s quarterly update may not have been enough to leave investors jumping for joy but it seems to be enough to keep their minds at ease in the midst of what’s been a challenging season for the company and, truly, the lithium industry as a whole.
With economic sentiment around the battery metal on the rise over the new year, however, the company could be on the way to some decent returns. So far, Galaxy’s share price has risen by 14.2 per cent since the start of 2020.
Today, shares are trading a slight 1.55 per cent lower, however, currently worth $1.14 each in a $467.63 million market cap.
