UPDATE 2.15pm: Shares in Galaxy Resources received a much needed boost after the company announced that product from its Jiangsu lithium carbonate processing plant in China had met battery grade quality.
"This means that as well as adhering to the 99.5 per cent purity criteria, the production now meets the prescribed tolerances for impurities required by its cathode producing customers," the company said in a statement.
Battery-grade lithium carbonate must meet stringent specifications, with allowances for only certain levels of impurities such as calcium, magnesium, iron, sulphate and sodium.
Galaxy said sample material would be delivered to its existing clients in China and Japan under offtake framework agreements for qualification testing and confirmation.
"In the meantime, the company continues to sell final product to technical grade customers at strong pricing levels," Galaxy said in a statement.
Battery grade lithium carbonate commands a significant pricing premium over more common technical and industrial grade material.
Galaxy said the achievement of battery grade product was an important milestone in the ramp-up of the Jiangsu plant and towards the company's strategy of becoming a dominant player in the lithium-ion battery input market.
Galaxy managing director Iggy Tan said achieving product quality design at a complex chemical plant often took considerable time and the Jiangsu team has worked hard to meet all of the lithium carbonate battery grade specifications so early in the ramp-up cycle.
"Only a few Chinese lithium carbonate plants are currently achieving battery grade specifications for lithium carbonate, notwithstanding the many years of development it took to achieve this quality," he said.
"Revenue flows from Jiangsu will continue to increase as ramp-up in output progresses."
Galaxy said increased sales of the final lithium carbonate product would boost revenue flows and it expected to achieve positive operational cash flows during the first quarter of 2013.
The company also said today it had $17.4 million cash at the end of last month.
Galaxy shares have been punished in recent weeks after the company announced earlier this month it would place its only mine, Mt Cattlin lithium mine near Ravensthorpe, on care and maintenance because of an excess stockpile of lithium concentrate backing up at its delayed Jiangsu plant.Shares in Galaxy closed up eight cents, or 20.78 per cent, at 45.6 cents after hitting an intraday peak of 47 cents.
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