Galaxy Resources (ASX:GXY) has received commitments from sophisticated and institutional investors to subscribe for $61 million worth of shares at $0.54 each, via a private placement.
The capital raising was significantly oversubscribed, with support shown by both existing shareholders and new investors.
The proceeds of the placement, together with existing funds available to Galaxy, will serve to progress its development work at the Sal de Vida and James Bay projects.
Galaxy’s Sal de Vida lithium and potash brine project in Argentina is situated in the lithium triangle which is currently the source of 60% of global lithium production.
Sal de Vida has excellent potential as a low cost brine-based lithium carbonate production facility.
Incidentally, Galaxy’s commenced lithium shipment last month from its Mt Cattlin lithium and tantalum mining operation located in Ravensthorpe, Western Australia.
The company is expecting significant cash flows from Mt Cattlin, with initial offtake prepayments of US$13.5 million already received.
Lithium compounds are an essential cathode material for long life lithium-ion batteries used in hybrid and electric vehicles, as well as mass energy storage systems.
Galaxy is bullish about the global lithium demand outlook and is aiming to become a major producer of lithium products.
The strong demand for the share placement confirms the underlying strength and robustness of Galaxy’s suite of assets.