Galan grabs all of the Candelas lithium project, here’s why
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With a robust preliminary economic assessment already in place, it should come as no surprise that Galan has moved to full ownership of its Candelas lithium project in Argentina.
Candelas features a PEA which estimates unleveraged pre-tax net present value and internal rate of return – both measures of a project’s profitability – of US$1,225m and 27.9% respectively as well as a resource sufficient to fuel production of 14,000 tonnes per annum of battery grade lithium carbonate for 25 years.
It is also worth noting that the PEA – roughly equivalent to a JORC Scoping Study – dates back to November 2021, meaning that some of its assumptions, including the long-term average real lithium price assumption of US$18,594/t now looks just a tad conservative given the February lithium carbonate price of about US$69,560/t.
Galan Lithium (ASX:GLN) certainly seems to be aware of this and plans to revisit the Candelas project studies once it wraps up the Hombre Muerto West Definitive Feasibility Study.
“The Candelas Project was our first project foray into Argentina and we now have final full ownership of the project,” managing director JP Vargas de la Vega said.
“Over the journey, our focus has understandably been on Hombre Muerto West but once we complete the DFS and associated works and infrastructure projects we will move forward on Candelas.”
He added that Candelas is a stand-alone lithium brine project with no water access concerns and that the company will use its five years of lithium knowledge in the region to revisit its geological data and analysis.
While the company has been focused on HMW – with good reason – the Candelas project remains a viable project in its own right.
Candelas covers over 24,000 hectares within a 15km by 3-4km wide structurally controlled basin in Argentina’s Puna geological province.
Initial capital costs and cash production cost of lithium carbonate were estimated at US$408m and US$4,277/t respectively while payback is expected within four years.
The company also noted at that time that the outcomes at Candelas could be further optimised and enhanced to refine the project’s potential.
This article was developed in collaboration with Galan Lithium (ASX:GLN), a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.