Earthworks at Pond 1 of Galan’s HMW lithium brine project in Argentina almost complete, with liners now being installed
Lithium chloride from the first of four production phases remains on track for H1 2025
Glencore preparing for due diligence site visit as part of lucrative US$100 million funding and offtake deal
Special Report: Galan Lithium has ticked off another key milestone as it continues its quest to become Argentina’s next lithium producer early next year.
Construction activities are progressing to schedule at Galan Lithium’s (ASX:GLN) flagship Hombre Muerto West (HMW) lithium brine project where first lithium chloride production is expected in H1 2025.
The liners for Pond 1 are now being installed as earthworks near completion. This means Pond 1 remains on track to be filled later this quarter and the evaporation process can begin during the upcoming Argentine summer.
GLN managing director Juan Pablo Vargas de la Vega said this was a crucial first major step in the project’s long-term production schedule.
“The commencement of the installation of liners for Pond 1 is another tick in the box for the HMW Phase 1 construction team,” he said.
“The team continues to push forward on all fronts as it aims to validate GLN’s low-cost, low-risk lithium chloride development strategy to become the next lithium producer in Argentina in H1 2025.”
The first liners are being installed at Pond 1. Source: GLN
Pond 2 is also taking shape
GLN has already started construction of Pond 2 with earthworks 10% complete. Nine production wells have also been built, with only six required for Phase 1 production at the HMW project.
A total of 23 production wells are required for Phases 1 and 2.
Production from HMW will be delivered across four separate phases, beginning with 5.4ktpa LCE of lithium chloride concentrate from H1 2025, as governed by the approved production permits.
Phase 2 is targeting 21ktpa LCE of lithium chloride concentrate from 2026, followed by Phase 3 production of 40ktpa LCE by 2028. The fourth and final phase will include lithium brine sourced from both HMW and GLN’s 100%-owned Candelas project, also in Argentina.
Construction of Pond 1 is almost complete at HMW. Source: GLN
Glencore preparing for site visit
HMW is considered a Tier-1 project capable of producing a “premium” high-grade lithium chloride concentrate of 6% Li. That is comparable to 13% Li2O or 32% LCE.
The low-cost economics of the project has already caught the attention of global conglomerate Glencore which has agreed to purchase up to 100% of the proposed lithium chloride production from Phase 1, as well as provide up to US$100 million of development finance.
Glencore representatives are set to undertake a site visit in the near term as part of its due diligence.
Capex for Phase 1 at HMW is estimated at just US$104 million with payback achieved inside two years. The first phase of operations is forecast to deliver post-tax NPV of US$460 million and IRR of 36%, as well as free cash flow of US$54 million per annum.
Pic: Supplied
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.
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