Galaxy Mining has agreed new terms with General Mining on the resumption of operations at the Mt Cattlin Spodumene Project near Ravensthorpe in Western Australia. The amended terms allow for General to provide the financial and technical resources to restart Mt Cattlin in order for both companies to benefit from robust lithium and tantalum markets.
General will have sole and exclusive right to earn a 50% equity interest in the Mt Cattlin project for Aus$25 million.
The amended terms are:
- It will earn a deemed 50% operating profit interest by investing Aus$7 million of capital expenditure on the project prior to commencement of production on or before March 31, 2016.
- The balance of consideration is to be satisfied by way of three annual instalments of $6 million, payable monthly in arrears from the commencement of production.
- General has the right to earn a 50% interest at an earlier date subject to it satisfying the two requirements above at any time in the first three years.
- All prior lease and royalty arrangements are to be extinguished.
- General to be the sole operator and manager of Mt Cattlin.
- All care and maintenance costs prior to the commencement of production (subject to a cap on Galaxy’s contribution of $50,000 per month) and revenues after the commencement of production to be shared equally.
- General granted right to earn a 50% equity interest in the James Bay project in Canada subject to an investment of US$5 million over a three year period.
Galaxy chief executive Anthony Tse says, “We believe the revised deal structure with General Mining will allow Galaxy to benefit and unlock more value from both projects over the longer term.
“The General management team has the depth of experience and technical knowledge that together with their financial commitment provide Galaxy with the means to immediately restart the operations at Mt Cattlin and at the same time advance the James Bay spodumene project.”