The shares of lithium producer Galaxy Resources Limited (ASX: GXY) have been a big mover in morning trade after the company provided a production update for its Mt Cattlin mine.
At the time of writing its share price has climbed over 7% to 59 cents, bringing its 12-month return to a whopping 319%.
Today's update reveals that Galaxy has successfully reached 90% of nameplate throughput (capacity) with peak feed rate at 95% of design.
Pleasingly the Mt Cattlin operations are expected to see an increase in throughput this month, with nameplate design hitting 210 tonnes per hour within the next week.
Furthermore, the company announced that it has scheduled its second lithium concentrate shipment for late February. According to the release the shipment will contain 15,000 wet metric tonnes (plus or minus 10%) with the product grade averaging 5.5% lithium oxide and a low 2% mica concentration.
Does this make it a buy?
Whilst this announcement itself isn't necessarily a game changer, it is great to see the miner achieve these high levels of throughput and product grade.
The significantly oversubscribed placement this month raised $61 million at a price of 54 cents per share. Management believes the strong demand for the placement confirms the underlying strength and robustness of its assets, and I couldn't agree more.
As long as demand for lithium continues to remain strong, I feel confident that Galaxy is on a path to becoming one of the leading global pure-play lithium companies.
In my opinion this underlines why Galaxy is one of the best investments in the resources sector today.
At this point in time I think Galaxy is a buy and would pick it ahead of its peers Orocobre Limited (ASX: ORE) and Neometals Ltd (ASX: NMT).
