Galan starts pilot evaporation pond construction at Hombre Muerto West

Galan is making good progress towards starting pilot plant operations at the Hombre Muerto West lithium brine project in Argentina, with pond construction underway.

Construction of evaporation ponds at the project is progressing well with the company expecting the pilot ponds system to be operational in the first quarter of 2022.

These ponds will be filled with brine pumped from Hombre Muerto West to continue tests of the evaporation process, targeting high-grade lithium concentrations of more than 6% lithium and low impurities.

Galan Lithium (ASX:GLN) also expects a second rig to start drilling at the Rana de Sal prospect in early January to accelerate its exploration campaign, which follows the hydrogeological planning and recommendations from its highly experienced lithium brine consultants – WSP in Chile and SRK in Australia and Argentina.

A third rig is available for mobilisation depending on the progress made in January.

The company has also constructed a new temporary camp, which will give it access to two camps to support ongoing activities at HMW in early January.

Additionally, a comprehensive geophysical survey over all of its tenements is currently underway to complement previous geophysical surveys and generate new drill targets while a feasibility study award is imminent.

“We are very excited with the great progress we are making at HMW. Our efforts and vision are solely focused on getting the project online and becoming a lithium producer as soon as technically possible,” managing director Juan Pablo Vargas de la Vega said.

“2021 has been a year of strength, transformation and consolidation for Galan and we look forward to 2022 and providing our shareholders with further value by being part of this decisive time where the world is transitioning into a cleaner global economy driven by new electric vehicles powered by lithium batteries.”

Hombre Muerto West and future activities

Hombre Muerto West currently hosts a resource of 2.3 million tonnes lithium carbonate equivalent at a grade of 946mg/l lithium within Argentina’s Hombre Muerto West salt flat in the South American lithium triangle.

The company recently updated the project’s Preliminary Economic Assessment (PEA) study to account for the expected increase in the long-term average real lithium price assumption to US$18,594/tonne for the period of 2025 to 2040, up from the US$11,687/tonne in 2040 estimate that it had previously used.

This has resulted in a 120% increase in the unleveraged pre-tax net present value (NPV) of the project to US$2.2 billion while internal rate of return is now 37.5%.

Besides the expected start of pilot plant operations, Galan plans to start a passive seismic campaign during the summer of 2022 to further assist with the hydrogeological study that will delineate the extension of the lithium brines and the depth of basin at the project.

The combination of the drilling campaign and geophysics will give Galan more robust data which is central for HMW’s feasibility is expected to formally commence soon.

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.