Lithium miner Galaxy Resources (ASX: GXY) has revealed plans to make a final investment decision to develop its Sal de Vida lithium brine project by mid-2020, with first production anticipated in 2022.
Today’s update is part of the company’s corporate strategy for 2020 and beyond, with Argentina-based Sal de Vida to be developed in stages.
The company expects to fund the first stage from its balance sheet once the final investment decision has been made and after a partial sell-down in the project.
All up, Galaxy plans to develop the project in two-to-three stages, which, according to the company, allows capital expenditure to be broken up into phases in addition to reducing development risk and simpler management of construction.
The rationale behind Galaxy’s strategy with Sal de Vida is to take advantage of the asset’s potential as a low-cost brine-based lithium carbonate operation.
This has been underpinned by a simplified flowsheet along with reduced energy and water requirements to enhance sustainability.
Galaxy is targeting a 40-year operation at Sal de Vida with 1.1 million tonnes of lithium carbonate equivalent firmed up in reserves and 4.9Mt lithium carbonate equivalent estimated in resources with potential for this to be grown.
Mt Cattlin lithium mine
Meanwhile at Galaxy’s Mt Cattlin lithium mine in Western Australia, the strategy for 2020 will comprise prioritising value over volume.
With the lithium market currently in a slump, Galaxy plans to reduce production at Mt Cattlin in addition to lowering costs to maintain positive cash margins and preserving resource life.
Galaxy anticipates the lowered production combined with existing inventory will be able to meet contract commitments and additional demand throughout the year.
“Production can be ramped up swiftly and efficiently should market conditions materially improve,” Galaxy stated.
James Bay and lithium market outlook
Galaxy also owns the James Bay pegmatite project in Quebec, Canada.
The company’s plan for James Bay is to provide expansion capacity to meet future lithium demand which is expected to grow substantially.
Commenting on the lithium market outlook, Galaxy claims it remains “bullish” and plans to capitalise on this forecast.