• Phase 1 construction underway with 6 initial brine wells completed
  • Drilling in newly consolidated area highlights resource growth potential
  • The company is on the path to become a lithium miner by 2025


Four of six wells for Phase 1 production at the Hombre Muerto West (HMW) lithium brine project have been tested, with the latest recording a stunning mean lithium grade of 981 mg/L.

This is highest reported grade from a production well in the Hombre Muerto Salar, says Galan, which is powering toward commercial production in 2025.

HMW has a current resource of 6.6Mt at 880mg/l lithium, making it one of the largest and the highest-grade resource in Argentina.

Stage 1 development would see 5400tpa a premium concentrate (6% Li) product produced from H1 2025, ramping up to 60,000tpa LCE by 2030 in Stage 4.

Stage 1 represents an accelerated construction, lower project capex and opex costs (incl power/water) and cashflows 2 years earlier than originally envisaged.

Returns are attractive with net present value 8% and internal rate of return – both measures of a project’s profitability – estimated at US$460m and 36%. Payback on the capex of $104m is expected in just 2.2 years.

“Our path to production is now tangible and real,” Galan managing director Vargas de la Vega said.

“We remain motivated to become a new lithium miner and to start cashflow in H1 2025.”


Ticking all the boxes ahead of Stage 1 production 

To date, all six initial Phase 1 brine production wells have been successfully constructed, with the fourth long term pumping test recording an outstanding lithium mean grade of 981 mg/L.

The 15-day pumping test was conducted from 4 July to 18 July, with 61 brine samples returning “stunning” lithium grades ranging from 907 to 1,008 mg/L. During this period a constant flow rate of 15 L/s was maintained.

Further hydraulic testing is scheduled to be completed during Q4 2023.

On the HMW Phase 1 construction front, everything is moving along nicely with the main earthmoving contractor mobilising to site a week or so ago,  Galan Lithium (ASX:GLN) MD Juan Pablo (JP) Vargas de la Vega said.

A test pit confirms good quality ground for construction of the first evaporation pondone of several across the 110ha Phase 1 project area — which is expected to be completed in the first quarter of 2024.

“Sound and solid test pit ground material results have given us great confidence in the ponds construction,” he says.

“We are also delighted to report that all wells required to support the HMW Phase 1 production have now been constructed and with 4 long-term pumping tests now complete, we have confirmed the impressive HMW grades and flow rates that are consistently being achieved.”


Successful drilling to grow resource

In July, Galan secured a new consolidated area on the northwest border of the Hombre Muerto Salar where an exploration target was defined.

Recent drilling supports the extension of the brine resource north of the actual resource footprint at HMW.

The depth of the drilling was limited by the rig capacity, with the company confident that deeper exploration will open additional brine opportunities.

“HMW’s newly consolidated Catalina area has provided very encouraging exploration results as we look forward to drilling more holes, along with geophysics, to be included in a future resource update,” Vargas de la Vega said.

“HMW keeps on growing and giving great results.

“Congratulations to the Galan site team for this significant milestone which further de-risks the project.”


Phase 2 DFS scheduled next month

Optimisation work at the project is ongoing and will culminate in the release of the Phase 2 DFS in September to address a 20,000tpa production rate.

Final output from both HMW and Candelas is expected to hit 60,000tpa at the culmination of the four-phase development.

The company is continuing strategic discussions with potential offtakers, with the existing pilot demonstration plant producing premium quality lithium chloride samples (6% lithium) to support negotiations.

The next batch sample remains on schedule for delivery in September 2023.




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.