Galaxy Capital Corp.
TSX VENTURE : GXY

February 23, 2012 13:04 ET

Galaxy Capital Corp. Acquires Sun Graphite Project in Quebec

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 23, 2012) - Galaxy Capital Corp. (TSX VENTURE:GXY) (the "Company" or "Galaxy") is pleased to announce that it has signed an agreement to acquire a 100-per-cent interest in the Sun Graphite Property located along the St. Lawrence River North Shore in southern Quebec.

A summary of the property is as follows:

  • Large 4,200 hectare claim block, multiple target areas and anomalies the longest of which is 3 kilometres, trench and drill ready.
  • Identified by Outokumpu Mines Inc. in exploration for base metal mineralization, ground work confirmed graphite.
  • Road accessible

The Sun Graphite Property consists of one large contiguous block of 76 claims totaling approximately 4,200 hectares located 125 km northwest of the city of Baie-Comeau, Quebec. Access to the property is excellent with road access via the main lumber haul road which originates in Baie-Comeau and Labrieville.

The Sun Property was originally explored by Outokumpu Mines Inc. in 1998 exploring for base metal mineralization. An advanced helicopter borne geophysical program consisting of 2600 km of flight path in the region was performed. The airborne program located multiple electro-magnetic (EM) anomalies in the area, outside or coinciding with magnetic anomalies. In a 15 km long trend, there are multiple target anomalies and off-set structures, the longest of which is 3 km long.

This helicopter borne geophysical survey was followed by ground exploration on about half of the major conductors only. The program was abandoned midway when it was concluded that all anomalies visited were related to graphite mineralization and that the base metal sulphides of interest were nearly absent. Some of the graphite occurrences seem to be associated to the contact (shear zone) between the different geological units.

Galaxy plans to mount an aggressive exploration campaign on the property commencing with a complete compilation of historic geologic work followed by surface work, trenching and diamond drilling. The exploration target is multiple crystalline flake graphite deposits similar to other graphite deposits and mines in Quebec such as Focus Metals Inc.'s Lac Knife Deposit and Timcal Graphite and Carbon's Lac des Iles Mine.

The geology of the property is primarily on the contact zone between the Lac de la Blache anorthositic complex and the cataclastic gabbro suite and a variably magnetic sequence of cataclastic gabbro interlayered with paragneiss.

The Company cautions that it has not verified the quality and accuracy of the historic sampling results reported in this news release which predates the introduction of National Instrument 43-101 and cautions readers not to rely upon them. The historic figures were generated from sources believed to be reliable; however, they have not been confirmed. Although the sampling results are relevant, they have not been verified.

Graphite Market

Global consumption of natural graphite has increased from ~600,000 in 2000 to 1.2 MM t in 2012. Demand for graphite has been increasing by approximately 5% per year since 2000 due to the ongoing modernization of China, India and other emerging economies, resulting in strong demand from traditional end uses such as the steel and automotive industries. Graphite also has many important new applications such as lithium ion batteries, fuel cells and nuclear and solar power that have the potential to create significant incremental demand growth. There is roughly 20 times more graphite required by weight to produce a lithium-ion battery than there is lithium. Demand for graphite is expected to rise as electric vehicles and lithium battery technology are adopted as well as increasing uses in new technology applications.

Natural graphite comes in several forms: flake, amorphous and lump. Of the 1.2 million tonnes of graphite produced annually, approximately 40% is of the most desirable flake type. China, which produces about 73% of the world's graphite, is seeing production and export growth leveling and export taxes and a licensing system have been instituted. A recent European Commission study regarding the criticality of 41 different materials to the European economy included graphite among the 14 materials high in both economic importance and supply risk (Critical Raw Materials for the EU, July 2010). Graphite prices have been increasing in recent months and over the last couple of years prices for large flake, high purity graphite (+80 mesh, 94-97%C) have more than doubled.

Terms

Galaxy has an option to earn a 100-per-cent interest in the Sun Graphite Property from Zimtu Capital Corp. and three of their prospecting partners by making the following payments and issuing the following common shares to the vendors: i) $15,000 upon signing the letter agreement (paid), ii) $15,000 and 1,000,000 common shares on receipt of the TSX Venture Exchange ("TSX-V") acceptance of the agreement, iii) $30,000 and 500,000 common shares fourteen months from TSX-V acceptance, iv) $40,000 and 500,000 common shares 24 months from TSX-V acceptance. During the period which is 12 months from the date of TSX-V acceptance, Galaxy Capital Corp. will complete a minimum of C$150,000 of exploration on the Property. The vendors will retain a 2-per-cent net milling royalty on the property, 1% of which can be purchased by Galaxy for C$1,000,000.

Jean-Sebastien Lavallée (OGQ #773), geologist, a Qualified Person as defined by National Instrument 43-101, has reviewed and approved the technical content of this release.

RAHOUL SHARAN

ON BEHALF OF THE BOARD

Rahoul Sharan, President and CEO

For further information, please visit the website at www.sedar.com to view the Company's profile.

We seek safe harbor.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Galaxy Capital Corp.
    Rahoul Sharan
    604-921-1810
    604-921-1898 (FAX)