Galan’s HMW lithium project is nipping at the heels of giants after resource upgrade
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Special Report: Galan now has the third largest publicly disclosed lithium brine resource in Argentina’s Hombre Muerto salt flat basin.
This comes after the company upgraded resources for its Hombre Muerto West (HMW) project by a massive 65 per cent to 2.3 million tonnes of lithium carbonate equivalent (LCE) at 946 mg/l Li.
It also takes the company’s total resources in the Hombre Muerto basin up to about 3Mt LCE at 858 mg/l Li.
Here’s where it gets really interesting.
Galan’s combined resource is now ahead ahead of South Korean steel-maker POSCO’s assets in the region, which were acquired from Galaxy Resources (ASX:GXY) in 2019 for $US280m ($382.8m) on the basis of a 2.5Mt LCE resource grading 732 mg/l Li.
This suggests that the company’s assets are worth at least as much as what POSCO paid for its assets, not bad for a company that has a current market cap of about $26m.
“Being the third largest publicly disclosed resource in the Hombre Muerto and overtaking POSCO is an amazing milestone,” managing director Juan Pablo Vargas de la Vega said.
“The increase from 1.4Mt to 2.3Mt of LCE at HMW is a huge step up for the project’s economic and technical potential that we will now reflect in our ongoing PEA and scoping studies due for completion in early Dec’20.”
The PEA (preliminary economic assessment) will generate engineering, operating cost and capital cost estimates required to support scoping studies for the production of battery and/or technical grade lithium carbonate.
HMW comprises six exploration areas covering an estimated strike of 7.5km and width of up to 2.5km on the western shores of the Hombre Muerto, the world’s second best salar (salt flat) for the production of lithium from brines after the Atacama salar in Chile.
It is adjacent to Livent Corporation, Galaxy Resources and POSCO’s Sal de Vida projects.
Livent’s Fenix operation has been in production for more than 27 years and produced about 17,000t of lithium carbonate and 4,000t of lithium chloride in 2019.
Posco is also currently carrying out design work and piloting operations at its Sal De Vida deposit.
HMW itself is also shaping up to be an interesting project given its high grade, low impurity brines that modelling highlights to be more than competitive for the production of battery-grade lithium carbonate.
Testwork is currently underway to confirm that the company can produce high-grade lithium concentrate from the brines and battery-grade lithium carbonate from the concentrate.
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.