Galaxy improves product quality at Jiangsu

Highlights

• Production showing consistent improvements in battery grade lithium carbonate quality
  
• Impurity reduction seen across all product samples
  
• Levels of key impurity sodium reduced significantly
  
• Galaxy aims to set new benchmark on battery grade specifications required by customers

PERTH, Australia, Aug. 15, 2012 /CNW Telbec/ - Lithium producer Galaxy Resources Ltd (ASX: GXY) ("Galaxy" or "the Company") is pleased to report further improvements in the quality of lithium carbonate produced at its wholly-owned Jiangsu Lithium Carbonate Plant ("Jiangsu" or "Jiangsu Plant") in China.

Galaxy advised on 27 July 2012 that it had achieved battery grade quality across all the necessary specifications. Testing of the latest battery grade production has demonstrated significant reductions in sodium (Na) and sulphate (SO₄) levels in particular, resulting in higher purity levels of battery grade lithium carbonate.

For lithium cathode and lithium-ion battery makers, sodium levels are one of the most detrimental impurities, potentially causing oxidation and gassing in the final battery product. In addition, excessive sodium levels can cause a reduction in charging and discharging capacity in lithium-ion batteries as well as reducing the life of the battery.

The latest lithium carbonate testing at Jiangsu show sodium levels have dropped from 117 parts per million (ppm) (battery grade spec is 250 ppm) to a low of 20 ppm.

Galaxy Managing Director Iggy Tan said: "The reduction in impurity levels is a key step in quality improvement of our battery grade lithium carbonate at Jiangsu and we not only continue to meet all the impurity tolerances required by our battery cathode producing customers but are now consistently producing a lithium carbonate product that is superior to almost all of our competitors in the lithium carbonate market.

"These latest results justify our decision to have designed the Jiangsu Plant to produce high purity lithium carbonate. The additional quality improvements we have made to the production processes at Jiangsu have been patented by Galaxy," Mr Tan said.

Similar quality improvements have been recorded in sulphate (SO₄) levels. Although the original batches (790 ppm) met the battery grade specification of less than 800 ppm, the latest battery grade product testing has shown a further 30% decrease in sulphate levels to around 530 ppm. This is positive in respect to Galaxy's cathode customers looking to minimise the sulphate impurities in their lithium carbonate supply. Excessive sulphate impurities can lead to gassing and leakage in lithium-ion batteries.

Calcium (Ca), magnesium (Mg) and iron (Fe) levels have also remained well below specification levels. These elements can reduce the capacity of lithium-ion batteries and have similar effects to those of high sodium levels.

Galaxy believes it is already achieving one of the best quality battery grade products available in the market today, based on its assessment of other battery grade lithium carbonate production. Figure 2 shows impurity levels in competitor product sourced from lithium carbonate producers in the People's Republic of China (PRC) and South America.

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 completed a feasibility study for a proposed lithium-ion battery plant, to produce 620,000 battery packs per annum for the electric bike (e-bike) market. 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. 

SOURCE Galaxy Resources Limited