Lithium has been dominating project news for some weeks now and the latest big announcement is that Galaxy Resources and General Mining have agreed to a A$216 million merger to consolidate their lithium operations. Highlights of the merger

• Creation of a leading diversified global lithium company with a large wholly-owned portfolio of hard rock and brine based lithium assets located in multiple jurisdictions
• Leading growth profile underpinned by Mt Cattlin production, the development of the Sal de Vida brine project in Argentina and James Bay hard rock project in Quebec, Canada
• Positioned to be a major supplier of high quality lithium, servicing the growing demand from energy storage applications
• Strong financial position with a strong pro-forma balance sheet and growing cash flow generation to support continued project expansion and development, and further industry opportunities
• Enhanced equity and capital markets profile with a combined pro-forma market capitalisation in excess of A$700 million
• Significant growth potential with existing and expanding production, diversified and superior growth profile, proven management and operating teams, strong balance sheet and greater international market profile
• Galaxy and General Mining Boards unanimously support the merger.

Martin Rowley, Chairman of Galaxy, will remain as Chairman of the Board of the combined group. Anthony Tse, Managing Director of Galaxy will remain as Managing Director of the combined group and Michael Fotios, Executive Chairman of General Mining, will be offered a position as a Director on the Board of the combined group.

Rowley: “We are extremely pleased that the joint venture arrangement we entered into with General Mining in 2015 has resulted in a merger proposal that makes sound strategic sense and, importantly, gives the shareholders of both Galaxy and General Mining the opportunity to participate in the upside of a merged lithium company of global significance.

“The arrangement struck between Galaxy and General Mining has enabled the re-commissioning of the Mt Cattlin mine, drawing on General Mining’s financial and technical resources, with Mt Cattlin now poised to deliver first production of spodumene to contracted buyers in the third quarter of calendar 2016.

“We are confident that merging the companies will result in significant benefits to both sets of shareholders with the opportunity for a re-rating for the expanded shareholder base from the enhanced equity and capital markets profile.”

Fotios: “General Mining and Galaxy are an excellent and natural fit, given existing joint venture owned assets, complementary project development and operational expertise, as well as aligned, success driven cultures. Both companies have successful track records of creating substantial value for shareholders and, together, we will retain this focus. Our ability to capture future growth opportunities in the rapidly evolving lithium market will be significantly enhanced by this merger.”

Galaxy Resources is currently advancing plans to develop the Sal de Vida lithium and potash brine project in Argentina, which is situated in the Lithium Triangle, a region where Chile, Argentina and Bolivia meet, and presently accounts for 60% of global lithium production. Sal de Vida is a proven high quality resource has excellent promise as a future low cost production facility.

The company also owns the Mt Cattlin spodumene mine near Ravensthorpe in Western Australia and the James Bay lithium pegmatite project in Quebec, Canada.