The Galaxy Resources Limited (ASX: GXY) share price will be on watch on Wednesday after providing an update on its James Bay Lithium Mine Project.
According to the release, the Grand Council of the Cree, the Cree Nation Government and the Cree Nation of Eastmain have entered into a Pre-Development Agreement regarding the development of the James Bay Lithium Mine Project in Quebec, Canada.
In addition to this, Galaxy also revealed that the Environmental and Social Impact Assessment for the James Bay Lithium Project is complete.
What was the agreement?
The release explains that Galaxy will notify the Cree parties of employment and training opportunities, to maximise employment and training for the local Cree community.
It is also committed to preferential hiring of qualified Crees, to seek business proposals from Cree enterprises, as well as to hire a local community liaison coordinator for a Galaxy office in Eastmain.
Cree parties will support and facilitate the pre-development, as well as the future development of the project, to cooperate with Galaxy regarding the ESIA and other relevant environmental and social impact assessment studies.
In addition to this, they will use their best efforts to ensure that the project proceeds in an efficient and timely manner through the review process.
Should you invest?
I think this is a positive development for Galaxy and believe its shares could push higher today, especially considering they sank to a 52-week low of $1.90 on Tuesday.
However, I wouldn't be a buyer just yet. Whilst I think Galaxy is an attractive option due to its high quality assets and sizeable cash balance, until lithium prices improve I suspect its shares will remain under pressure.
As a result, until lithium prices reach an inflection point, I would stay away from Galaxy, Kidman Resources Ltd (ASX: KDR), Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS).
