Pond design could lower costs at Galan’s HMW lithium project

Lower capital expenditure is on the cards for Galan’s flagship Hombre Muerto West lithium project, following a positive review of its preliminary ponds design layout.

The review confirmed the robustness of the evaporation design that optimises the continuous terrain available to produce up to 25,000 tonne per annum of lithium carbonate equivalent.

Good news given that previous work had already ranked the project in Argentina as having one of the lowest cash costs in the industry of about US$3,518 ($4,678.4) per tonne.

New evaporation tests by Galan Lithium (ASX:GLN) also continue to produce high-grade lithium chloride concentrate with more than 6% lithium and low impurities.

Additionally, a revised drilling program has been reviewed by WSP Group and contract discussions have begun with a view to starting work as soon as feasible.

“Galan continues to strengthen and broaden the flexibility of the HMW Project with a view to production as soon as possible,” managing director Juan Pablo Vargas de la Vega said.

“We have confirmed the existence of a strong product with lithium concentrate levels beyond 6% Li, and we continue to optimise our evaporation route.

“Our team is confident of the HMW Project’s potential to increase its production levels up to 25,000tpa LCE in the next feasibility studies.

“The Galan team continues to look at solutions to grow and make HMW as robust and as low risk as possible by using proven technology.”

New pond design and evaporation testing

The design of the pond, which was prepared by a specialised consultant who has prepared similar designs for evaporation ponds systems already working in Argentina, allows the company to potentially develop the project in two stages.

Stage 1 t could have the advantage of using the most favourable terrain for minimising the upfront capital ratio in terms of US$ per tonne of LCE per year.

The second stage shows the terrain with a higher level of incline to be used at a later stage.

Galan also has further terrain optionality to the West at Rana de Sal that could be used for more evaporation ponds or as a halite storage.

Meanwhile, two new trials have been completed that achieved the 6% lithium chloride content in concentrate.

The first used the same evaporation process route as the initial test work while the second used a modified process reagent route that has the potential to reduce reagents cost, which means potentially lower operating expenditure.

Other activity

Galan has advanced the analysis for selecting the preferred process design for the next feasibility studies, the next critical milestone to be completed before being able to seek expressions of interest for the major engineering contract for the HMW project.

Test work for battery grade lithium carbonate is expected to be completed in the third quarter due to delays caused by the spread of COVID-19 in Antofagasta, Chile.

Separately, the company has also commenced new optimised brine concentrate modelling at its Candelas project.

This article was developed in collaboration with Galan, 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.