Galan Lithium is on schedule for initial production at its Hombre Muerto West lithium project in Argentina by the first half of 2025, with construction of its first evaporation pond now 65 per cent complete.
Pond liners have arrived on-site and installation is set to begin this month, ahead of filling the pools in next year’s first quarter. The company is adamant the evaporation process will kick off in the coming months.
Works preparing the second and third ponds are also already underway, with topsoil removed while the final modules of the new worker camp and associated infrastructure are in place.
Proposed production at the project has been separated into four specific phases, with the first step focused on the production of 5400 tonnes per annum lithium carbonate equivalent (LCE) of lithium chloride concentrate by early in 2025.
Phase-two production is targeting 21,000 tonnes per annum 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.
According to a phase-one definitive feasibility study (DFS) tabled in July, Hombre Muerto West is projected to have an annual average EBITDA of US$83 million (AU$123 million). Based on the phase-two DFS, the projected annual average EBITDA pumps up to a whopping US$374 million (AU$588 million) for an astounding 40 years.
Galan Lithium managing director Juan Pablo Vargas de la Vega said: “Galan has assembled a cohesive team of highly competent people, with the necessary specialist experience and knowledge to build the ponds and infrastructure required to successfully deliver the first production phase of the HMW project. Pond 1 construction works have been progressing well and in accordance with expectations. We are sharply focused on our objective to commence brine evaporation this summer.”
The company lifted its total mineral resource estimate earlier this 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.
Just last month, 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.
Just last week, the company announced it had received several partnership approaches for offtake and strategic financing for the second-phase development of its Hombre Muerto West project.
Galan’s operation and its Candelas project are both on the Hombre Muerto salar, which boasts the highest-grade and lowest-impurity levels of all lithium brines in Argentina. The region already hosts established lithium brine operations owned by the likes of Livent Corp, Allkem and POSCO.
And there is little doubt Galan management will be getting the feeling of joining the ranks as the physical fruits of its endeavours start to take shape.
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