Galaxy Resources Limited (ASX:GXY)

Sale of tenements at Sal de Vida - Kingston Resources Limited confirmed that it has agreed the sale of its Mt Cattlin lithium tenements to Galaxy Resources Limited and for this Kingston will receive $600,000 for the sale, paid 50 per cent cash and 50 per cent as Galaxy shares. Kingston Resources is a metals exploration company. Kingston is continuing to review strategic options for its NT lithium holdings, where discussions with interested parties were going on. A strategic review of the lithium portfolio was undertaken to determine how to extract maximum value from those assets and it is reaching the final stages of that process and has successfully completed the sale of its Mt Cattlin lithium tenements. Recently, the Company issued 93,168 fully paid ordinary shares as part consideration for the acquisition of exploration licences.


Kingston project locations (Source: Company Reports)

Recently, Red 5 Limited confirmed that it has entered into an agreement for the sale of the Company’s royalty entitlement from the Mt Cattlin mine in Western Australia to Canadian royalty company, Lithium Royalty Corporation. Under the terms of the Sale and Purchase Agreement between Red 5 and LRC, the total consideration for the transaction was set at $11 million, with $7 million payable at completion upon approval from the Foreign Investment Review Board (FIRB) and execution of a Deed of Assignment and Assumption with Galaxy Resources. Recently, GXYentered into a non-binding agreement with POSCO to sell a package of tenements located on the northern area of the Salar del Hombre Muerto in Argentina, for cash consideration of US$280 million.It is expected that the market for lithium chemicals will remain tight and will continue to support a decent pricing environment. The stock price has been falling since the start of the year, and we maintain our “Hold” recommendation at the current market price of $2.99 by looking at the commodity pricing scenario and demand prospects in view of GXY’s diversified portfolio.
 

Pilbara Minerals Limited (ASX:PLS)

Significant Resource scale and Grade - Pilbara Minerals has the capital to swell to 5Mtpa of AUD 207m from previous Pre-feasibility Study for Stage 2 development project. It expects LOM average annual production of approximately 800ktpa of 6% spodumene concentrates and approximately 780,000lbs of tantalite in concentrate after stage 1 and 2 production ramp-up. The mine life is 17 years and first production is planned in Q4 2019. The main focus of Pilbara is to fast-track Pilgangoora towards production to capitalise on the widely anticipated shortfall of lithium in global markets over the next decade, with the project currently targeting commissioning in the June 2018 quarter. It is expected that in the coming weeks, all remaining construction activities will be completed with further commissioning and testing. The Company targets to deliver its first shipment of spodumene concentrate in August of this year. It is in the process of working through the remaining logistics, shipment and payment details that are consistent with its Stage 1 off-take agreements with its partners Ganfeng and General Lithium. It is ideally placed to capitalize the robust lithium market outlook and demand. We give a “Hold” at the current price of $ 0.865 as Pilgangoora will be a key supply solution to the burgeoning lithium raw material market.


Pilgangoora Project overview (Source: Company Reports)

 
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