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Galan hits big milestone ahead of lithium production

Galan Lithium has begun filling the first evaporation pond at its Hombre Muerto West lithium brine project in Argentina. Credit: File

Galan Lithium says it is just two weeks away from beginning the evaporation process at its Hombre Muerto West lithium brine project in Argentina with the initial filling of its first pond now underway.

The move marks the first major step of the long-term proposed production schedule for the project where Galan is aiming to produce high-grade concentrate of up to 6 per cent lithium by the first half of 2025.

The liner installation for the first pond is progressing rapidly at 40 per cent completion while the earthworks construction for the second pond is now 20 per cent complete.

Proposed production at the project has been separated into four specific phases, starting with 5400 tonnes per annum of lithium carbonate equivalent (LCE) in 2025. Phase-two production is targeting 21,000 tonnes a year in 2026, before a significant increase during the third phase to 40,000 tonnes per year by 2028.

The final stage is predicted to produce 60,000 tonnes per annum using lithium brine sourced from both Hombre Muerto West and Galan’s other Argentinian brine project in Candelas.

Recent testing from the Hombre Muerto West pilot plant achieved the production of a 6 per cent lithium chloride concentrate product, equivalent to 13 per cent lithium oxide or 32 per cent LCE, with low levels of impurities.

Our experienced project team have been implementing a quicker route to start evaporation while construction continues for HMW Phase 1. We are taking advantage of the summer season whereby a buffer wall has been installed at the one third mark of Pond 1. The commencement of the filling of Pond 1 is another significant major milestone for the HMW project and I congratulate the entire Galan team. The initial partial evaporation process will commence in approximately 14 days with the full fill of Pond 1 remaining on track for Q1 2024. Galan Lithium managing director Juan Pablo Vargas de la Vega

An updated resource estimate for Hombre Muerto West has been slated for this quarter. The company lifted its total mineral resource estimate last year to 6.6 million tonnes of LCE averaging 880 milligrams per litre lithium.

Comparatively, the phase-two production schedule is modelled on a combined proven and probable reserve of 806,400 tonnes of LCE at an average grade of 864 milligrams per litre lithium.

Refinements to Galan’s production flowsheet from a second phase definitive feasibility study released in October reduced its projected average annual operating cost from US$3963 (AU$6230) per tonne LCE to US$3510 (AU$5520), placing the Humbre Muerto West project squarely at the lower end of the industry’s cost to produce curve.

Last year, Galan signed a binding offtake agreement with mining giant Glencore, which outlined the supply of up to 100 per cent of lithium products from phase-one production at Hombre Muerto West. As a sweetener to the deal, Glencore offered to provide a secured financing prepayment facility for US$70 million (AU$107 million) and up to US$100 million (AU$154 million), subject to conditions.

Management says the offtake agreement does not require Galan to secure an export licence for its lithium chloride and Glencore will accept the product to be toll-treated into LCE for sale and export from Argentina.

The deal is for a five-year period from the start of the first-phase of commercial production, with a site visit by Glencore set to occur this week as part of the due diligence outlined in the arrangement.

Hombre Muerto West and Candelas are both on the Hombre Muerto salar, which is likely the highest-grade and lowest-impurity of all lithium brines in Argentina. The region already hosts established lithium brine operations owned by the likes of Livent Corp, Allkem and POSCO.

Galan is making impressive progress at its Argentine operation and appears to be on track to join the ranks of lithium producers in South America’s renowned “lithium triangle” as soon as next year. Its project has both grade and scale and is situated in a region that is no stranger to profitable lithium production.

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