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Galan reveals silver lining at Argentine lithium project

Lining of the first pool is underway at Galan Lithium’s Hombre Muerto West project. Credit: File

Galan Lithium is making impressive progress with the construction of its wholly-owned Hombre Muerto West lithium brine project in Argentina, with its first evaporation pond almost complete and liner installation underway.

The company expects to start filling the initial pond this quarter, with the evaporation process for the operation – the first major step of the company’s long-term production schedule – set to begin in the coming months.

Proposed production at the project has been separated into four specific phases, starting with 5400 tonnes per annum of 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.

The company says 23 production wells are required for its first two phases. It has completed nine wells through ongoing drilling, with only six being required for phase-one production.

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 31.9 per cent LCE, with low levels of impurities.

Earthworks for the second pond have already kicked off and it is now 10 per cent complete, while an updated resource estimate for the operation has been slated for the first quarter of next year. 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 DFS 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.

The commencement of the installation of liners for Pond 1 is another tick in the box for the HMW Phase 1 construction team. The team continues to push forward on all fronts as it aims to validate Galan’s low-cost, low-risk lithium chloride development strategy to become the next lithium producer in Argentina in H1 2025. Galan Lithium managing director Juan Pablo Vargas de la Vega

In November, 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 commercial production, with a site visit by Glencore currently being planned as part of the due diligence outlined in the arrangement.

With the latest visual proof that Galan remains on track with its construction schedule and the recent ticking over into a new year, production in 2025 suddenly does not seem too far away.

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