The Galaxy Resources Limited (ASX: GXY) share price is up more than 5% after the lithium miner gave investors an update.
Why is the Galaxy share price rising?
Galaxy gave two updates today. The first was its Sal de Vida resource and reserve update, which is its wholly owned lithium project.
An assessment of hydrogeological data from the drilling of two production wells has led to an increase in the resources and reserves.
Galaxy reported a revised brine resource of 6.2 million tonnes of lithium carbonate equivalent (LCE), which was a 27% increase from the prior estimate. It also reported a revised reserve estimate of 1.3 million tonnes of recoverable LCE, a 13% increase.
There was also higher grade brine recovered in both wells – an average lithium concentration of 933 mg/L compared to an average resource of 754 mg/L.
Production drilling will continue to test the aquifer at depth and a further update to the resource and reserve is expected in the third quarter of 2021.
The business also gave a Sal de Vida development plan update. The front-end engineering design has been completed and confirms the lowest quartile capital intensity and operating costs.
Galaxy Resources said that it’s targeting production of around 32,000 tonnes per annum of battery-grade lithium carbonate (LC) in three stages.
A staged development approach has been adopted to reduce development capital risk and utilise surplus cashflow from stage 1 for later stages. Stage 1 production capacity is 10,700 tonnes per annum, with 80% battery grade quality. The development capital cost estimate is US$153 million, with cash operating costs of US$3,500 per tonne.
