Should you buy Galaxy Resources Limited (ASX:GXY) shares after today’s update?

The Galaxy Resources Limited (ASX: GXY) share price has followed the market lower on Monday morning.

At the time of writing the lithium miner’s shares are down 2.5% to $2.55 despite the release of a positive update.

What was in the update?

This morning Galaxy Resources announced that tenement transfer deeds for the sale of the northern tenement package at the Salar del Hombre Muerto were executed with South Korean conglomerate POSCO on November 23.

This means that a consideration of US$280 million (less withholding tax of approximately US$8 million and a US$15 million deferred settlement amount) will be released to Galaxy once the transfers are registered with the Salta and Catamarca Provincial Mining Courts.

The latter US$15 million deferred settlement amount is expected to be released this month once the transfer of brine extraction rights is completed.

What next?

Management has confirmed that the cash proceeds from the transaction will be applied immediately towards accelerating the development of its Sal de Vida Project, which is the southern area side of the Salar del Hombre Muerto.

This project has a total measured, indicated and inferred resource of 5.16 Mt lithium carbonate equivalent.

In addition to this, the company revealed that it is still working with JP Morgan Australia to evaluate various options for strategic partnerships to develop the Sal de Vida Project. This process is well underway and the company is in negotiations with a short list of potential investors.

Should you invest?

I think that Galaxy Resources is one of the best ways to gain exposure to lithium along with the likes of Mineral Resources Limited (ASX: MIN), Orocobre Limited (ASX: ORE), and Pilbara Minerals Ltd (ASX: PLS).

Especially given the sizeable cash balance it now has. I estimate that Galaxy is sitting on approximately A$460 million at present, which represents almost half of its current market capitalisation.

But while this does de-risk things somewhat, Galaxy remains a high-risk and volatile investment option that would be unsuitable for most investors.

With that in mind, these blue chip growth shares may be better options for investors right now.

Top 3 ASX Blue Chips To Buy For 2019

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2019."

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now