Shares in Galaxy Resources Limited (ASX: GXY) are gaining slightly following news regarding the company's Mt Cattlin operation. Earlier this morning, the Galaxy Resources share price was trading as high as $4.08, a 2.8% gain on yesterday's closing price.
At the time of writing, however, the company's shares have retreated back to $4.00 – still 0.76% higher for the day so far.
This morning the lithium-focused mineral resource company announced Mt Cattlin's 2021 production guidance has been increased, as well as its production costs.
Galaxy Resources' Mt Cattlin operation is a spodumene project located in Western Australia.
Let's look closer at what the company announced.
Mt Cattlin updates
According to Galaxy's announcement this morning, Mt Cattlin has produced more than 40,000 dry metric tonnes of spodumene concentrate during the second quarter of 2021.
As a result, the company has increased Mt Cattlin's spodumene concentrate 2021 full-year production guidance to between 195,000 and 210,000 dry metric tonnes. That's up from its previous guidance of between 185,000 and 200,000 dry metric tonnes.
Galaxy advised that the operation is processing less ore than expected this year, but what it is processing has higher lithium content than was previously thought.
Additionally, the company's expected sales volumes are in line with its increased production. Galaxy shipped 33,500 tonnes of spodumene concentrate in May and has a 15,000 tonne order to ship this month.
It also stated the price of its spodumene concentrate is likely to increase over the current quarter, bringing in more than US$750 per megaton after cost, insurance, and frieght.
It's not all good news though – Galaxy's production costs have increased.
Previously, the company estimated its production costs would be between US$360 and US$390 per tonne produced. That figure is now forecast to be between US$420 and US$450 per tonne.
Galaxy also shared the results from its recent reverse circulation drilling program completed at the Mt Cattlin operation.
Following the drilling program, the project's mineral resource estimate was revised. It's now:
- 11 million tonnes at 1.2% lithium oxide and 151 parts per million tantalum pentoxide.
Mt Cattlin's ore reserve estimate is now:
- 8 million tonnes at 1.04% lithium oxide and 139 parts per million tantalum pentoxide.
Infill drilling at a deposit in the project's north-west is now being completed. Galaxy has also brought the first phase of the project's pre-strip forward to the second half of this year.
Galaxy Resources share price snapshot
Galaxy Resources shares have been having a party on the ASX of late.
Currently, the Galaxy Resources share price is around 79% higher than it was at the beginning of 2021. It's also gained almost 370% since this time last year.
The mineral resource company has a market capitalisation of around $2 billion, with approximately 505 million shares outstanding.
