Insights

Here’s why the Galaxy (ASX:GXY) share price is pushing higher today

The Galaxy Resources Limited (ASX:GXY) share price is on the move today following the release of an update on its James Bay operation…
The post Here’s why the Galaxy (ASX:GXY) share price is pushing higher today appeared first on The Motley Fool Australia. –

The Galaxy Resources Limited (ASX: GXY) share price is pushing higher on Tuesday morning.

At the time of writing, the lithium producer’s shares are up 2% to $2.28.

Why is the Galaxy share price pushing higher?

Investors have been buying Galaxy shares this morning following the release of an update on its James Bay Lithium Mine Project in Québec, Canada.

According to the release, the Preliminary Economic Assessment (PEA) for the project is complete. That assessment found that the project is a viable, near-term supplier of spodumene to feed the emerging electric vehicle value chains in North America and Europe.

Management estimates that the project will deliver average annual production of 330,000 tonnes of spodumene concentrate over an ~18-year mine life.

It expects to achieve this with a cash operating cost (FOB Montreal) of US$290 per tonne of concentrate. Management notes that this will position James Bay competitively.

In light of the above, the company estimates that the project has a pre-tax net present value (NPV) of US$560 million at an 8% discount rate. It also anticipates a pre-tax Internal Rate of Return (IRR) of 39.6%, with a payback period of 2.2 years.

As a result of this, Galaxy will now advance the project directly into the basic engineering phase. The full capital cost of the project is estimated to be US$244 million.

Galaxy also revealed that it plans to integrate James Bay with a downstream lithium chemicals facility. Discussions with a number of prospective partners will be advanced following the release of the PEA.

Management commentary

Galaxy’s Chief Executive Officer, Simon Hay, was pleased with the PEA. He commented:

“Galaxy is pleased to release the PEA outcomes for James Bay which clearly demonstrate that the Project is a viable, near-term supplier of spodumene to feed the emerging electric vehicle value chains in North America and Europe. Our skills and experience in developing and operating Mt Cattlin have been utilised to optimise the James Bay design. As a result, the Project is a low-cost operation and will sit in the lowest quartile regionally for capital intensity and operating costs.”

“Galaxy intends to develop James Bay as a fully integrated project and the release of the upstream PEA is a major milestone in our engagement with potential downstream owners and suppliers. Forecast financial outcomes are compelling and with downstream facilities needing to secure long-term spodumene supply from reliable and proven miners Galaxy is confident that the James Bay project will be highly attractive, particularly to North American and European value chain participants.”

“We have immediately commenced the basic engineering phase. First production is targeted for early 2024 as electric vehicle penetration rates increase and the forecast demand for lithium in the region accelerates.”

Following today’s gain, the Galaxy share price is now up 200% over the last 12 months.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here’s why the Galaxy (ASX:GXY) share price is pushing higher today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!