Galan raises $31.5m to advance development of HMW lithium development
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Galan is now funded to purchase long lead items for the pilot plant and Stage 2 Definitive Feasibility Study for its Hombre Muerto West lithium brine project in Argentina after wrapping up a placement.
Highlighting confidence in the company and its projects, domestic and offshore institutional and sophisticated investors made firm commitments to subscribe for $31.5m worth of shares priced at $1.05 each, which represents a 9.8% discount to the 10-day volume weighted average price.
Additionally, Galan Lithium (ASX:GLN) will offer existing shareholders the opportunity to subscribe for up to $30,000 worth of shares under the same price as the placement to raise a further $5m.
“I wish to thank all the placement participants, old and new, who have strongly supported the Galan production plan that will take it from an initial smaller scale lithium producer to a big 60ktpa player,” managing director Juan Pablo Vargas de la Vega said.
The company will have about $50m in cash following completion of the placement.
At HMW, proceeds from the placement (and SPP) will be used for long-term lead items such as liners, piping and lime plant for the first stage plant, which will be capable of producing up to 4,000tpa of lithium carbonate equivalent.
The company will also pre-pay the earthworks contractor, expand the workers’ camp, fund the Stage 2 DFS and production expansion, and fund further exploration and production well drilling.
Funds will also be used for extra work at Greenbushes in Western Australia.
Earlier this month, the company upgraded resources at HMW to 6.6Mt of LCE at a grade of 880mg/L.
Including the nearby Candelas brine, the company has a large resource base of 7.3Mt at 852mg/l Li, making it one of the highest grade large scale resources in the lithium rich country and its vaunted Lithium Triangle.
As much as 72% is in the measured resource category – 4.7Mt at 873mg/l Li – showing the level of detail and confidence GLN has in a brine located alongside Livent’s major operating El Fenix project, Allkem’s Sal de Vida and POSCO’s Sal de Oro.
The initial 4000tpa starter project is designed to de-risk the targeted full-scale pond construction methodology and evaporation path, as well as provide better defined cost information for final HMW Project capital and operating estimates.
It could be followed by the Stage 2 expansion, which will increase production up to 20,000tpa LCE.
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.