The US$40m offtake deal would be a further boon for the development of Hombre Muerto West. Pic: Getty Images.
Galan inks US$40m offtake deal for Hombre Muerto West lithium
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- Galan has inked a US$40m MoU for 23,000t LCE over first five years of production
- Chemphys is a well-known lithium chemical company operating since the 1990s
- Galan aiming for first LCE production in H1 2025
Special Report: A US$40m deal has been signed with Chengdu Chemphys for 23,000t of LCE produced from Galan Lithium’s Hombre Muerto West over the first five years of production from the Argentine brine development.
The memorandum of understanding with Chemphys, while non-binding, is another reinforcement of the scalability of Galan Lithium’s (ASX:GLN) Hombre Muerto West project with its updated MRE totalling 7.9Mt LCE at 883mg/l Li in March 2024.
If confirmed, it would see Galan receive US$40 million in the form of a pre-payment with a first ranking security over its lithium inventory and HMW, paid off in the form of lithium chloride deliveries.
Hombre Muerto is proven to host lithium brine deposition of the highest grade and lowest impurity levels within Argentina.
It’s home to the established El Fenix and Sal de Vida operations, owned by Arcadium Lithium (ASX:LTM), and South Korean POSCO’s Sal de Oro lithium project.
Chinese-owned lithium chemical business Chemphys, which has operated since the 1990s, already has interests in lithium companies with projects in Argentina, including in the Salta and Catamarca provinces where GLN operates.
Leading processor
JP Vargas de la Vega says the high grade, low impurity lithium chloride samples Galan has been producing from the HMW pilot plant have been very well received by lithium converters, leading to the agreement with Chemphys.
“Chemphys is a leader in processing lithium products in China and is a trusted partner to some of the world’s largest battery manufacturers,” he says.
“The offtake partnership and the financing prepayment will be foundational agreements for the HMW project and Galan.”
GLN says it’s looking forward to the execution of the definitive agreements to further develop HMW and anticipates first lithium chloride production in the second half of 2025.
Chemphys director Alison Dai complimented the quality of the product Galan is producing at HMW.
“Chemphys is pleased to achieve this first milestone with Galan. Chemphys places great importance on the quality of the lithium supply and visibility of the supply chain,” she said.
“Galan is a great partner for Chemphys on these measures and we look forward to a strong relationship.”
This article was developed in collaboration with Galan Lithium, 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.
