Galaxy Resources Limited (ASX: GXY) shares are sinking today after the company released an update to the market earlier this morning. At the time of writing the Galaxy share price is trading 1.59% lower at $2.47.
Here's what the company had to say.
Update on resource and ore reserves
The Galaxy share price is sliding lower today after the company updated the mineral resource and ore reserve estimates for its Mt Cattlin operation in Western Australian.
As at 31 December 2020, Mt Cattlin mineral resources were estimated at 12.0Mt (tonnage) at a grade of 1.3% Li2O. Ore reserve estimates were revised to 8.0Mt at a grade of 1.1% Li2O. The company noted that ore reserves had depleted by 0.25Mt due to reduced mining activity.
In the investor presentation, Galaxy highlighted that production in 2021 will be accelerated to meet customer demand. The company noted that mining rates have increased from 200k BCM per month in 2020 to 324k BCM per month in February 20201. As a result, Galaxy estimates mining production for Q1 to be in the range of 45 to 48kt.
Galaxy also provided an outlook for future opportunities at Mt Cattlin. The company cited 1.3Mt of unprocessed tailings with an average grade of 1% Li2O. As a result of strong demand in China, Galaxy is looking to explore the sales of tailings as aggregates for civil construction.
How has the Galaxy share price been performing?
Galaxy is an international lithium production company with facilities and hard rock mines in Australia, Canada and Argentina. The company's flagship and wholly-owned Mt Cattlin mine in Western Australia currently produces spodumene and tantalum concrete.
The Galaxy share price has surged since late 2020, fulled by soaring lithium spot prices and a recovery in resources. Investors have been keeping a keen eye on lithium companies like Galaxy as lithium prices eye 2-year highs.
Earlier this month, Galaxy made headlines after providing an update on its James Bay Lithium Mine Project in Canada. According to the update, the preliminary assessment found that the project is a viable, near-term supplier of spodumene.
The company's management also highlighted that the project will deliver average annual production of 330,000 tonnes of spodumene with an approximate mine life of 18 years.
Over the past year, the Galaxy share price has jumped by nearly 200%. Year to date, Galaxy shares are up by around 7%.
