Galaxy Jiangsu Update

Highlights

  • Jiangsu Plant October lithium carbonate production 428 tonnes, up 50% vs September
  • Total sales for October 273 tonnes, recorded revenue of A$1.7 million (RMB 11.2 million)1.
  • Battery grade lithium carbonate sales commenced
  • 100% of battery grade production met tight quality specifications
  • Further reduction in impurity levels across product
  • Calcination and sulphation kiln achieved 92% on line time
  • 12 month ramp-up of Jiangsu Plant on schedule

PERTH, Australia, Nov. 13, 2012 /CNW Telbec/ - Galaxy Resources Ltd (ASX: GXY) ("Galaxy" or "the Company") advises that lithium carbonate production at its wholly-owned Jiangsu Lithium Carbonate Plant ("Jiangsu Plant" or "Jiangsu") was 428 tonnes in October - an increase of 50% month-on-month and in line with Jiangsu's 12 month ramp-up schedule.

Production consisted of 154 tonnes of superior battery grade product (99.5% purity, or above), with the balance technical grade product.

October lithium carbonate sales totalled 273 tonnes, recording revenue of A$1.7 million (RMB 11.2 million)1, including VAT. While sales from Jiangsu comprised mostly technical grade product, Galaxy recorded initial sales of battery grade product following customer qualification and testing.

All of the battery grade output met the necessary quality specifications, which include only certain levels of impurities. Statistical process control ("SPC") quality analysis showed further reductions in impurity variation within a narrow range, representing outstanding quality reliability.

Sales from Jiangsu will comprise mostly technical grade product until the battery grade product fully completes customer qualification processes and testing. As reported in September, battery grade samples have been sent to over 50 potential battery cathode customers in China. In addition, battery grade samples have been sent to a number of Japanese customers for product qualification and testing.

Galaxy Managing Director, Iggy Tan, said: "We are very pleased with increased lithium carbonate output we've seen at Jiangsu for the month of October as we continue to meet our ramp-up targets. The commencement of sales of battery grade lithium carbonate and the further improvements to product quality are a huge step towards Jiangsu becoming a significant producer of superior quality lithium carbonate for the lithium battery market."

At the front end of the Plant, the calcination kiln utilisation rate (amount of time on line) reached 92% during October. Temporary lifters were installed in the calciner to provide better spodumene pre-heating and heat transfer within the kiln.  These modifications have successfully reduced kiln off gas temperatures, thereby allowing increased kiln feed rates and kiln stability. The kiln feed rate was slightly reduced due to the pending replacement of internal lifters in the kiln expected end-November.

The focus during October was to improve the stability, on line rate and utilisation of the back end of the Plant. During the month, the utilisation rate of the lithium carbonate precipitation plant and dryer reached 73% on line time. Again, this was an excellent result for the particular stage of the ramp-up.

An internal audit for the Jiangsu Plant's quality, environment, safety management system was also completed in October. British Standard Institution ("BSI") carried out a third party audit in early November and the site is expected to receive the ISO 9001, ISO 14001 and OHSAS 18001 quality/environment/safety certification in several months.

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 where it mines lithium pegmatite ore and processes it on site to produce a spodumene concentrate and tantalum by-product. At full capacity, Galaxy will process 137,000 tpa of spodumene concentrate which will feed the Company's wholly-owned Jiangsu Lithium Carbonate Plant in China's Jiangsu province. The Jiangsu Plant has commenced production and will produce 17,000 tpa of battery grade lithium carbonate, 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. Sal de Vida has excellent promise as a future low cost brine mine and lithium carbonate processing facility. The Company also owns the James Bay (100%) Lithium Pegmatite 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.

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1 Specific details regarding pricing, sales volume, product split and cost structure is subject to confidentiality obligations of sales contracts and competitor sensitivity.

SOURCE: Galaxy Resources Limited

For further information:

Corporate
Iggy Tan
Managing Director
Galaxy Resources Ltd
Tel (office): +61 (0)8 9215 1700
Email: ir@galaxylithium.com

Media Contact
Jane Grieve
FTI Consulting
Tel (office): +61 (0)8 9485 8888
Tel (mobile): + 61 (0)488 400 248
Email: jane.grieve@fticonsulting.com