Galaxy Resources and General Mining Corporation have entered into a definitive Takeover Bid Implementation Agreement to merge the two companies. It is proposed that Galaxy will acquire all issued shares of General Mining that it does not already own.

Based on Galaxy’s closing share price on the ASX on May 25, the offer values General Mining at approximately A$216 million.

The merged entity creates a leading diversified, global lithium producer well positioned for continued project expansion and development and further opportunities.

The entity will have existing production assets and a pipeline of market leading development projects. It will have a large wholly-owned portfolio of hard rock and brine based lithium assets located in multiple jurisdictions:

  • Maiden spodumene and tantalum production in the third quarter of 2016 at Mt Cattlin, Western Australia, will generate significant and growing cash flow.
  • The flagship, world-scale Sal De Vida Project in Argentina has superior brine chemistry and significant expansion potential.
  • The James Bay Project in Canada provides valuable potential to be a future supplier into the rapidly growing North American market.

The merged entity is positioned to be a major supplier of high quality lithium, servicing the high-growth demand from energy storage applications including long life lithium-ion batteries used for electric vehicles, domestic and commercial power storage, consumer electronics and power tools.

Galaxy chairman Martin Rowley will remain as chairman of the Board of the combined group. Galaxy’s managing director Anthony Tse will remain as managing director of the combined group and General Mining’s executive chairman Michael Fotios will be offered a position as a director on the Board of the combined group.

Martin Rowley said. “We are extremely pleased that the joint venture arrangement we entered into with General Mining in 2015 has resulted in a merger proposal that makes sound strategic sense and, importantly, gives the shareholders of both Galaxy and General Mining the opportunity to participate in the upside of a merged lithium company of global significance.

“The arrangement struck between Galaxy and General Mining has enabled the re-commissioning of the Mt Cattlin mine, drawing on General Mining's financial and technical resources, with Mt Cattlin now poised to deliver first production of spodumene to contracted buyers in the third quarter of calendar 2016.

“We are confident that merging the companies will result in significant benefits to both sets of shareholders with the opportunity for a re-rating for the expanded shareholder base from the enhanced equity and capital markets profile.”

Michael Fotios said, “General Mining and Galaxy are an excellent and natural fit, given existing joint venture owned assets, complementary project development and operational expertise, as well as aligned, success driven cultures.

“Both companies have successful track records of creating substantial value for shareholders and, together, we will retain this focus. Our ability to capture future growth opportunities in the rapidly evolving lithium market will be significantly enhanced by this merger.”

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