The Galaxy Resources Limited (ASX: GXY) share price could be on the move on Thursday following the release of the lithium miner’s quarterly update.
What did Galaxy announce?
As per the company’s update earlier this month, during the December quarter Galaxy achieved production volume of 43,222 dry metric tonnes (dmt) of lithium concentrate with a grading of 6.0% Li20.
This was at the upper end of its production guidance range of 35,000 to 45,000 dmt. It brought its full year production to 191,569 dmt.
Galaxy achieved this with a quarterly production unit cash cost of US$406 per dmt. This took its full year unit cash cost to US$391 per dmt. Management notes that this reinforces its Mt Cattlin operation as one of the lowest cost lithium concentrate operations globally.
Total sales volume during the quarter came to 29,778 dmt. This was just below its guidance range of 30,000 to 45,000 dmt. For the 12 months ending December 31, total sales volume reached 132,687 dmt.
Galaxy ended the period debt free and with cash and financial assets of US$143.2 million and 65,000 dmt of lithium concentrate.
FY 2020 expectations.
Galaxy will be reducing its mining and production rates at Mt Cattlin in 2020. It is doing this to conserve mineral resources until market conditions improve.
It also expects this to generate positive free cash flow and to maintain balance sheet capacity for the advancement of its development portfolio.
Overall, it plans to scale back mining operations by approximately 60%. This implies production of ~ 77,000 dmt in FY 2020.
In light of this, it is targeting lithium concentrate production volume of between 14,000 and 20,000 dmt during the first quarter.
It believes this production and its existing stockpiles will be sufficient to meet Galaxy’s contracted obligations to existing customers in 2020. Importantly, its 2020 mining and operational plan retains the flexibility to promptly ramp up production in response to market improvements or as required by its customers.