Galaxy Resources Share Price Up, Becomes Alliance’s Biggest Shareholder
At the time of writing, Galaxy Resources share price is trading slightly higher to $1.65, up 0.61%.
Galaxy Resources buys more shares in Alliance
On Thursday Galaxy pledged for $22.5 million of Alliance shares, making it the biggest shareholder.
GXY previously held a small investment in the company prior to the placement. However the announcement today did not clarify what size stake GXY now has.
But it was enough to push Galaxy above Burwill (Alliances’ former biggest shareholder), leading analysts to expect a 10–13% stake.
Galaxy chairman Martin Rowley verified the lithium miner had been under the threshold for a substantial shareholder for some time.
‘Galaxy has been a minority shareholder in Alliance for some time, and we welcome this opportunity to increase our holding and become the largest individual shareholder in Alliance,’ he said.
Mr Rowley commented on the high-quality of lithium-rich Spodumene concentrate produced by Alliance’s Bald Hill mine, and the prospect of the tenements around Bald Hill, in Western Australia.
At the moment, Galaxy is trying to offload its stake in its Sal de Vida Lithium project in Argentina, but hasn’t received an adequate offer so far.
Across the last year of trading the Galaxy share price has been hit hard over concerns its Australian Operations are producing low grade lithium — shredding some value off its share price.
Galaxy Resources share price outlook
Thursday’s move signals another busy period in the Australian lithium sector, which has seen a downturn in lithium prices since January 2018.
Both Mt Cattlin and Bald Hill mines export their spodumene concentrate through the same port at Esperance, giving rise to a merging opportunities for the projects, which would enable an owner to optimise sequencing of development, The Australian Financial Review reports.
And while share price is still pretty volatile after being hit hard over the last year, concerns over the company’s ability to fund Sal de Vida have been pulling Galaxy’s share price into a downward trend.
Hopefully this Alliance stake will be a step in the right direction for Galaxy Resources, but investors may have to wait this one out.
For Money Morning
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