PROJECTS

Galaxy commenced a Definitive Feasibility Study (DFS) of the James Bay Spodumene Project in Quebec, Canada, the completion of which would allow Galaxy to increase its stake in the project to 70%.

The Company appointed Montreal-based engineering services consultancy Genivar Inc. to manage the DFS.  Genivar is one of Canada's largest engineering services and firms and has extensive experience in the James Bay area.  The James Bay project will incorporate a mine, processing plant and battery-grade lithium carbonate plant.

Galaxy expects to be able to fast track the development of James Bay by using similar capacity and design as the plants constructed at Mt Cattlin and Jiangsu.  Galaxy has engaged mining engineering firm DRA Americas Inc. to work on the James Bay processing plant design component of the DFS.

In 2010, Galaxy signed a Memorandum of Understanding ("MOU") with Canada's Lithium One Inc.  (TSX-V LI) to acquire up to 70% of the James Bay project  as part of a farm-in arrangement.  Under the agreement, Galaxy acquired an initial 20% equity interest in James Bay for C$3 million and had the potential to earn 70% through the funding and completion of a DFS within a 24 month period.

The James Bay Lithium Pegmatite Project in Quebec is an extensive high-grade spodumene pegmatite deposit that occurs at surface. Situated adjacent to key infrastructure including high-tension power, roads and readily accessible water, the project is well located to potentially provide a stable supply of lithium to the emerging lithium battery sector in the northeast United States and Eastern Canada.

Preliminary test work shows that the James Bay spodumene ore coarseness is similar to Mt Cattlin.  This lends itself to similar processing and upgrading methods adopted at Mt Cattlin where simple crushing and heavy media separation is used to produce 6% lithium oxide spodumene product.

James Bay Global Resource Estimate

Note: Li2O cut off grade >= 0.75% Li2O.  Figures in the above table may not sum due to rounding.

Source: Lithium One

The mineral resources are reported in accordance with National Instrument 43-101 and have been estimated in conformity with generally accepted CIM “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines. Resource evaluation work was completed by Mr. Sébastien Bernier,

P.Geo (OGQ#1034, APGO#1847) an independent Qualified Person as defined by NI 43-101.