Galaxy Recommences Capital Raising

/NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO US PERSONS/

Highlights

• Galaxy re-launches 1 for 1 pro-rata non-renounceable entitlement issue at $0.08 per share to raise up to $46.7 million (before costs)
• Supplementary Prospectus and revised timetable attached
• Offer closing 22 July 2013
• Major shareholders endorse re-launch of Entitlement Issue, proactive discussions continuing

PERTH, Australia, July 2, 2013 /CNW Telbec/ - The Board of Galaxy Resources Ltd (ASX: GXY) ("Galaxy" or "the Company") advises shareholders it has recommenced a 1 for 1 pro-rata non-renounceable capital raising ("Entitlement Offer" or the "Offer") at $0.08 per share to raise up to $46.7 million (before costs).

A Supplementary Prospectus is attached to this document and will, along with the Prospectus, be mailed to eligible shareholders. The Supplementary Prospectus, dated 2 July 2013, is intended to be read in conjunction with the Prospectus, issued 27 May 2013. Other than as set out in the Supplementary Prospectus, all details in relation to the Prospectus and the Offer remain unchanged.

The Offer will now close on 22 July 2013 at 7.00pm (AEST).

It remains Galaxy's intention to raise up to approximately $46.7 million (before costs) through the Offer. As stated previously, proceeds will be used for corporate working capital (including interest payments), costs associated with the Sal de Vida Lithium and Potash Brine Project, to reduce debt levels and re-structure Galaxy's balance sheet.

Galaxy interim Managing Director Anthony Tse said: "After a short delay, our major shareholders have endorsed the recommencement of this process and the appointment Martin Rowley, co-founder of First Quantum Minerals and former Chairman of Lithium One Inc, to our Special Management Committee. Proactive discussions with those groups are to continue throughout the capital raising process."

Eligible Galaxy shareholders are invited to participate in the Offer, which is a one (1) for one (1) pro-rata Offer of up to 584,355,501 new fully paid ordinary shares ("New Shares") at an offer price of $0.08 per New Share. Applicants will also receive three (3) free attaching New Options for every two (2) New Shares subscribed. As set out in the Supplementary Prospectus, the Minimum subscription under the Offer is now $12 million. The Offer is not underwritten.

The New Shares to be issued under the Offer will rank equally with the existing Galaxy shares. Subject to satisfying the requirements for quotation, the New Options will also be tradeable on ASX, enabling New Option holders to, potentially realise value for the New Options through selling them on ASX if they so choose. Shareholders who choose not to take up their entitlement will receive no value in respect of their entitlements and their shareholding in the Company will be diluted.

Patersons Securities Limited is Lead Manager to the Entitlement Offer. Deutsche Bank is the Corporate Adviser leading debt refinancing and potential non-core asset sales initiatives.

The revised timetable of key dates is set out below:

Event	Date**
Lodgement of Prospectus	27 May 2013
"Ex" Date	30 May 2013
Record Date to determine Entitlements	5 June 2013
Lodgement of Supplementary Prospectus	2 July 2013
Prospectus and Supplementary Prospectus with Application Form dispatched	8 July 2013
Offer opens for receipt of Applications	8 July 2013
Closing date for acceptances	22 July 2013 at 7.00pm (AEST)
New Securities quoted on a deferred settlement basis	23 July 2013
Allotment and issue of New Securities	30 July 2013
Trading of New Securities expected to commence	31 July 2013

** The above dates are indicative only. The Company, in conjunction with Patersons, reserves the right vary the above dates, subject to ASX Listing Rules and Corporations Act.

Eligible Shareholders will receive a copy of the Prospectus and Supplementary Prospectus and application form shortly. You must follow the instructions in the application form to take up your entitlements.

If you have any questions, please call the Company Secretary on [phone] at any time between 8.30am to 5.30pm (WST), Monday to Friday before the Offer closes, or consult your stockbroker or professional adviser.

A copy of the Prospectus and Supplementary Prospectus can be viewed on the website of the ASX or alternatively at the Company's website at www.galaxylithium.com.

About Galaxy (ASX: GXY)
Galaxy Resources Ltd ("Galaxy") is an Australian-based global lithium company with lithium production facilities, hard rock mines and brine assets in Australia, China, Canada and Argentina. The Company is a lithium producer listed on the Australian Securities Exchange (Code: GXY) and is a member of the S&P/ASX 300 Index.

Galaxy wholly owns the Jiangsu Lithium Carbonate Plant in China's Jiangsu province. The Jiangsu Plant will eventually produce 17,000 tpa of battery grade lithium carbonate, becoming the largest producer in the Asia Pacific region and the fourth largest in the world.

Galaxy is also advancing plans to develop the Sal de Vida (70%) lithium and potash brine project in Argentina situated in the lithium triangle (where Chile, Argentina and Bolivia meet), which is currently the source of 60% of global lithium production. Sal de Vida has excellent promise as a future low cost brine mine and lithium carbonate processing facility.

The Company owns Mt Cattlin (100%) spodumene project near Ravensthorpe in Western Australia and the James Bay (100%) Lithium Pegmatite Project in Quebec, Canada.

Lithium compounds are used in the manufacture of ceramics, glass, electronics and are an essential cathode material for long life lithium-ion batteries used to power e-bikes and hybrid and electric vehicles. Galaxy is bullish about the global lithium demand outlook and is positioning itself to become a major producer of lithium products.

Caution Regarding Forward Looking Information.

This document contains forward looking statements concerning Galaxy.

Forward-looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors.  Forward-looking statements are inherently subject to business, economic, competitive, political and social uncertainties and contingencies.  Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking information provided by the Company, or on behalf of, the Company. Such factors include, among other things, risks relating to additional funding requirements, metal prices, exploration, development and operating risks, competition, production risks, regulatory restrictions, including environmental regulation and liability and potential title disputes.

Forward looking statements in this document are based on Galaxy's beliefs, opinions and estimates of Galaxy as of the dates the forward looking statements are made, and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments.

Not For Release in US

This announcement has been prepared for publication in Australia and may not be released in the U.S. This announcement does not constitute an offer of securities for sale in any jurisdiction, including the United States, and any securities described in this announcement may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer and that will contain detailed information about the company and management, as well as financial statements. 

SOURCE: Galaxy Resources Limited

Corporate   
Anthony Tse
Managing Director
Galaxy Resources Ltd
Tel (office): [phone]
Email: [email protected]    

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Jane Munday
FTI Consulting
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