Galan Lithium rings register for 2025 production

Firm $12m commitments received and entitlement launched for another $13.3m
Deepened relationship with proposed offtake partner Chemphys
Production expected to begin next year

Special Report: Galan is moving on a $25m raising to get to production from what is believed to be the highest-grade, lowest-impurity lithium project in all of Argentina.

Galan Lithium (ASX:GLN) has received firm backing for a $12 million placement and has launched an entitlement offer for another $13.3m to reach production from its Hombre Muerto West flagship in the prolific namesake basin of Argentina.

Institutional, sophisticated, and professional investors jumped into the placement at an 8.7% discounted price of $0.105 a share, with proposed offtake partner or designed affiliate Chengdu Chemphys Chemical Industry Co notably joining in with a $4.5m subscription, subject to definitive agreements.

A downturn in lithium prices appears to have done little to dissuade Galan or its investors from developing a flagship project offering near-term lithium concentrate production from what Galan believes is the highest-grade, and lowest-impurity project in all of Argentina.

Galan’s managing director Juan Pablo Vargas de la Vega said the company was delighted with the support and is pleased to welcome a number of new names to the register.

“We also welcome the participation of Chemphys in the Placement, which further strengthens the relationship between our companies,” Vargas de la Vega said.

“The Board has adopted a lower-capital intensity Phase 1 development to an initial 4,000 tpa LCE rate in light of market conditions.

“Funds raised from the Offer and the planned Chemphys prepayment provide the means to complete this development and keep our planned start to production in the second half of 2025.”

Vargas de la Vega added that the market conditions were challenging, but that Galan would move forward with confidence both in the economics underpinning its flagship and the future of the lithium market.

Bargaining brine

Through challenging conditions for lithium, at least some major operators have been eyeing off the acquisition of what could be undervalued assets looking ahead to a white gold rebound.

Pilbara Minerals’ (ASX:PLS) $560m move on Latin Resources (ASX:LRS) and its Brazilian brine asset was a recent big name ticket.

Galan itself has entered an offtake prepayment MoU with Chemphys to supply the latter a total of 23,000 tonnes LCE, over the first five years of Phase 1 production from GLN’s Hombre Muerto West project.

Chemphys will also chip in US$40 million via an offtake prepayment facility to help with the continued development of Phase 1 of the project.

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.