Galaxy non-renounceable entitlement offer

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

PERTH, Australia, Aug. 7, 2013 /CNW Telbec/ -

Galaxy Resources Ltd. (ASX: GXY) ("Galaxy" or "the Company") advises valid applications from shareholders for its 1 for 1 pro-rata non-renounceable rights issue ("Entitlement Offer") of 183,619,346 shares and 275,429,184 options were received, representing total proceeds of A$14.68 million¹.

Galaxy is finalising a number of guaranteed commitments from Galaxy's shareholders, which, as previously advised, will be taken up in the shortfall placement. Major shareholder commitments include Deutsche Bank A.G, Sydney Branch's subscription for its circa 7.8% share of the Entitlement Offer and shortfall placement to maintain its percentage interest in Galaxy.

In addition, the majority of an A$5 million subordinated short term loan facility (previously announced) with a lending consortium of existing Galaxy shareholders is still expected to be converted to equity as part of the shortfall.

Galaxy and its advisor Patersons Securities Limited are currently placing the balance of the shortfall and are continuing discussions with potential new institutional investors who have indicated strong interest following the recent global roadshow.

Allotment and issue of shares and options for initial acceptances are expected to occur on or before 09 August 2013. Holding statements will be dispatched shortly after.

As recently announced, July production at the Company's Jiangsu Lithium Carbonate Plant increased 12% month-on-month. Jiangsu is on track to become operationally cashflow positive in the next few months.

Entitlement Offer Timetable:

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¹ Proceeds received include subscriptions from Australian and Canadian shareholders and assume 1 AUD = 1 CAD

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

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 has built an advanced and fully-automated Lithium Carbonate production facility in Jiangsu Province, China ("Jiangsu Plant"). The Jiangsu Plant has a name-plate capacity of 17,000 tpa, is primarily focused on producing battery grade lithium carbonate, and is aiming to become the largest producer in the Asia Pacific region and the fourth largest in the world.

Galaxy is currently advancing plans to develop the Sal de Vida Lithium and Potash Brine Project ("Sal de Vida") in Argentina, which is situated in the Lithium Triangle, a region where Chile, Argentina and Bolivia meet, and presently accounts for 60% of global lithium production. Sal de Vida has excellent promise as a future low cost production facility.

The Company also owns the Mt Cattlin Spodumene Mine near Ravensthorpe in Western Australia and the James Bay Lithium Pegmatite Project in Quebec, Canada.

Lithium compounds are used in the manufacture of ceramics, glass, electronics and are an essential ingredient in producing battery materials such as cathode and electrolyte, in the manufacture of long life lithium-ion batteries, which are used in consumer electronics, power tools, electric bikes, hybrid and electric vehicles. Anticipating the growing demand in coming years, Galaxy 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 Ltd.