The Galaxy Resources Ltd (ASX: GXY) share price continues its impressive run into the green from today's market open.
Whereas the S&P/ASX 200 Index (ASX: XJO) has posted a return of around 26% over the last 12 months, Galaxy Resources shares have gained 340% over the same time.
Here we examine some of the tailwinds behind the Galaxy Resources share price.
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Planned Merger with Orocobre
Back in April, Galaxy revealed it had entered into a binding merger deed with Orocobre Limited (ASX: ORE).
Under the scheme, Orocobre would acquire 100% of Galaxy shares. In response, Galaxy shareholders will receive "0.569 Orocobre shares" for each Galaxy share held.
In addition, there is a meeting on 6 August where shareholders can vote on the proposal — that's just around the corner.
The Galaxy Resources board unanimously recommends shareholders vote in favour of the scheme. Should the vote be successful, the new Orocobre/Galaxy shares will commence trading on 26 August.
As a result of the merger announcement, Galaxy Resources shares initially took a nosedive into the red soon after 19 April.
However, the share price rose again on the back of a court ruling in early July which allowed shareholders to vote on the merger. The Galaxy Resources share price has shot up 49% since then.
Lithium spot prices running hot
Underlying lithium prices in the spot markets continue to deliver upside on the charts for Australian lithium miners.
Using Orocobre as a case study, it recently realised a 45% sequential increase in lithium prices from March this year.
This resulted in a 117% year-on-year increase in realised lithium prices from the same time a year prior.
The entire basket of ASX-listed lithium exploration, development and mining shares have been major benefactors of these strengths in lithium spot prices.
Galaxy has expertise as a resource company with expertise in lithium. Therefore, it stands to reason that it has also been a major benefactor of this run-up in lithium markets.
To illustrate, since its quarterly activities report was released on 22 July, Galaxy Resources shares have jumped a further 21% from the market open on that day.
Galaxy Resources share price snapshot
The Galaxy Resources share price has posted a return of 27% over the past month, extending the year to date return of 117%.
Given the recent fundamental momentum, Galaxy Resources shares hit their 52-week high today.
Galaxy shares are now exchanging hands at $4.83 apiece, a 3% jump into the green from the market open.
