Galan Lithium moves HMW brine project towards Phase 1 production

Galan Lithium progressing construction at Hombre Muerto West with a view towards cash preservation
Project completion now close to 40% with in situ mining inventory of over 2,800t LCE in the evaporation ponds
Focus on securing definitive sales agreement and associated funding package for the project

Special Report: Galan Lithium continues to progress its Hombre Muerto West (HMW) lithium-brine project in Argentina towards Phase 1 production of 5,400tpa LCE with overall project completion now close to 40%.

It also continues to build up its in-situ mining inventory with over 2,800t of lithium carbonate equivalent (LCE) now accumulating in the ponds. The ponds system is now at 60% capacity; the designed ponds system can allow an inventory – until the second half of next year – of up to 10,000tpa LCE without the need for processing.

Galan Lithium (ASX:GLN) adds that project construction is progressing at a slower pace commensurate with preserving cash and that first production from HMW is now targeted for H2 2025.

HMW has a resource of 7.9Mt LCE at 883mg/l lithium and sits within Argentina’s slice of the famed Lithium Triangle close to major lithium brine operations such as Arcadium’s (ASX:LTM) established El Fenix and Sal de Vida, and Korean giant POSCO’s Sal de Oro lithium projects.

Its development is being carried out in four stages, starting with Phase 1 targeting 5,400tpa LCE, Phase 2 production of 21,000tpa LCE in 2026, 40,000tpa LCE by 2028 for Phase 3 and 60,000tpa LCE for Phase 4 which will include the company’s other brine project: Candelas.

GLN also has a landmark commercialisation agreement in place with the Catamarca Provincial Government, which allows the sale of LCE concentrate to both domestic and international customers.

This has been flagged as a major change in Argentina’s approach to foreign investment.

Galan, Lithium, ASX, GLN, HMW, Brine, Production, Capacity, Cash — The HMW project ponds. Pic: Galan Lithium

Progress towards production

GLN noted that over the past month, it has re-worked its construction activities at HMW to preserve cash with a view to procuring both a definitive sales agreement and an associated funding package for the project in the short term.

While lithium inventories continue to build in line with feasibility study expectations, overall completion of the project is now at ~40% with about 750,000m3 of evaporation area constructed to date.

This is sufficient to produce a lithium chloride volume of ~3,000tpa LCE.

The company adds that key processing parameters, including brine well average flow rates, lithium grades and evaporation rates are all aligned with the Phase 1 DFS.

A pond inventory management system has also been put into place to protect inventory and optimise the evaporation process.

“We are very proud of the solid progress made to date especially in light of current market conditions. During this time, the Board also made the prudent decision to strategically slow construction activities so as to preserve our cash,” Galan managing director Juan Pablo Vargas de la Vega said.

“Our current in situ inventory of 2,800t LCE has been the first step of our production pathway. Our inventory will continue to increase as we have a low energy cost operation that only requires brine pumps to operate.

“As a result, once Galan finalises sales and funding arrangements, which are progressing well, the company will be in a strong position to produce a competitive low-cost lithium product.

“It should also be noted that we have received strong international market interest in our HMW lithium concentrate. In our view, this evidence indicates that the current lithium pricing environment and market oversupply is not expected to be a long-term trend.”

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.