Galaxy Resources Limited

Decent June quarter Performance: Galaxy Resources Limited (ASX: GXY) in the June quarter for Mt Cattlin Project has reported 9% increase in spodumene concentrate production of 47,901 dry metric tonnes (dmt) primarily due to the higher grade treated and an increase in recovery. During the quarter, the total mining volumes remained constant compared with the previous quarter and ore volumes mined reduced by 21% due to the processing of re-crushed secondary floats surface stocks.  The ore volume treated rose by 1% to 435,296 wmt, with a higher ore feed grade of 1.17% achieved compared with the previous quarter primarily due to higher grade mined during the quarter. The company has completed a total of 3 shipments of lithium concentrate during the June quarter for an aggregate 45,761 dmt of product sold. Moreover, during the June quarter, for Sal de Vida Project, the sale of northern tenements to POSCO is made for cash consideration of US$280 million. Feasibility work for upstream mine and concentrator continued at James Bay Project. Additionally, at June 30, 2018, GXY had US$68.3 million in cash and liquid securities and zero debt.  In addition, the company has completed US$16.5 million payment for the shipment in late June, secured by L/C, which was received in early July.  Meanwhile, GXY stock has fallen 15.64% in three months as on August 02, 2018 at the back of a second wave of softness in lithium prices. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 2.750.
 

Orocobre Limited

Strong June quarter Performance: Orocobre Limited (ASX: ORE) for the June quarter has reported second highest production, with the production increase of 28% to 3,596 tonnes of lithium carbonate on the March quarter. During the quarter, ORE achieved the average price of US$13,653/tonne on a free on-board basis (FOB). As a result, the company has reported the record quarterly sales revenue of US$44.4 million on total sales of 3,255 tonnes of lithium carbonate. Further, during the June quarter, the cash costs (on cost of goods sold basis) were down 13% quarter on quarter (QoQ) to US$3,800/tonne due to the increased production and sales volumes . The company’s gross cash margin is of US$9,853/tonne, up 7% QoQ, which reflects the profitability and cash generation capability of the Olaroz operations. Additionally, as at 30 June 2018, ORE had cash of US$316.6 million (net of project debt, cash is US$227.2 million).  During the June quarter, ORE received US$1.3 million from the sale of Lithium X and US$1 million in terms of the Salinas Grandes disposal to LSC Lithium. Recently, director Robert Hubbard enhanced the stake with acquisition of additional 5,000 shares in ORE. Meanwhile, ORE stock has fallen 21.55% in three months as on August 02, 2018. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 4.370.


Olaroz Lithium Project Updates (Source: Company Reports)

 
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