Investing News NetworkAUSTRALIA
Galan Lithium
Overview
Argentina is no stranger to lithium mining. The South American nation is one of three encompassed in the prolific Lithium Triangle, a region that holds more than half of the world’s lithium deposits. Argentina ranks third in the world in terms of lithium reserves at 2.2 million MT, concentrating lithium operations in the provinces of Jujuy, Salta and Catamarca.
Amidst electrification and decarbonization, analysts are forecasting a global supply deficit of 89,000 tonnes of lithium carbonate equivalent (LCE) in 2023 and the Argentinian government aims to double down on lithium to meet the increasing demand. Argentina expects a US$4.2 billion investment in its lithium sector and projects to produce about 50,000 tonnes of lithium in 2022.
Galan Lithium Limited (ASX:GLN) is an Australia-based international mining development company focused on its high-quality lithium brine projects in the world-class Hombre Muerto region in Argentina and its highly prospective lithium project in Australia – Greenbushes South.
The company’s flagship Hombre Muerto West (HMW) project hosts some of Argentina’s highest grade and lowest impurity levels with an inventory of 5.8 million tonnes (Mt) lithium carbonate equivalent (LCE). The 100-percent-owned property also leverages close proximity to Livent Corporation’s El Fenix operation and Allkem’s Sal de Vida projects. Extensive groundwork has demonstrated the significant potential of a deep basin on the property, warranting exciting advanced exploration opportunities.
Partial aerial view of HMW with drilling at Pata Pila in the lower part of the picture
Galan confirmed that the pilot plant is progressing well with the evaporation ramp-up with three ponds (H1, H2 and S1) already filled with brine and achieving expected brine qualities. Continuous production of the plant is expected to commence in Q2, 2023.
An updated mineral resource estimate for the Hombre Muerto West Project indicates 5.8 Mt contained lithium carbonate equivalent (LCE) @ 866 mg/l lithium, which brings the total Galan Resource to 6.5 Mt @ 839 mg/l lithium. These results will be incorporated into a DFS, which is on track for delivery in ~Q1 2023.
Galan’s secondary Candelas project comprises a sizable valley-filled channel with a potential indicated presence of substantially high-volume brine characteristics. The project’s maiden resource estimates stand upwards of 685 kilotons (kt) LCE, based on surveying from October 2019, and demonstrate exceptional discovery opportunities across this unexplored asset.
In January 2021, Galan acquired 80 percent of the Greenbushes South lithium project from Lithium Australia NL. In 2022, Galan executed a binding agreement with Lithium Australia to acquire its remaining 20 percent interest in the Greenbushes South tenements and its 20 percent participating interest in the Greenbushes South Joint Venture. Greenbushes South is now 100 percent owned by Galan.
Located in Western Australia, the project boasts advantageous positioning three kilometers south of the prolific Greenbushes lithium mine owned by Talison Lithium Pty Ltd., a notable lithium company that operates one of the world’s largest, highest-grade, hard rock spodumene deposits. New discoveries were made in 2022, including the revelation of a pegmatite in three main outcrops, and geochemical assays from the soil sampling grids confirm anomalous concentrations of lithium up to 215 ppm and other pathfinder elements.
Galan has a highly experienced management team with over a century of professional expertise in the resource, finance and energy sectors. This results-oriented board and their vested interest in company success prime Galan for exceptional discovery potential and advanced development of its high-quality projects.
Company Highlights
- Galan Lithium Limited is an ASX-listed company developing lithium brine projects within South America’s lithium triangle on the Hombre Muerto salar in Argentina.
- The company has three high-quality projects in the works: its flagship Hombre Muerto West and Candelas lithium projects in Argentina, and Greenbushes South lithium project in Australia.
- The Hombre Muerto West project leverages advantageous positioning near notable mining operations, including Livent Corporation’s El Felix project and hosts exceptional high-grade lithium and low impurity resources.
- HMW’s definitive feasibility study is on budget and on track for completion in the first quarter of 2023.
- The pilot plant is progressing well with the evaporation ramp-up with three ponds already filled with brine and achieving expected brine qualities.
- Geophysics has indicated Candela’s potential to host a substantial brine volume and provide significant amounts of processing water through low-grade brine treatment without using surface water from the Los Patos river.
- Galan has 100 percent ownership of the Greenbushes South lithium project, located 3 kilometers away from the Greenbushes lithium mine, the largest hard-rock lithium mine in the world.
- Galan aims to transition into a major lithium project developer and remains committed to conducting fast-tracked lithium development in its prolific and mining-friendly jurisdictions of operation.
Key Projects
Hombre Muerto West Project
The 100 percent owned Hombre Muerto West project is a large land property that sits on the west coast of the Hombre Muerto salar in Argentina, the second-best salar in the world for the production of lithium from brines. The property also leverages strategic positioning adjacent to notable competitors like Livent Corp. to the east.
The project has an updated resource of 5.8 Mt contained lithium carbonate equivalent (LCE) @ 866 mg/l lithium. Additionally, the project hosts some of the lowest impurities and best grades in Argentina across its rich geological profile comprising groundwater sourcing volcanic rocks, faulting and hydrothermal activity.
Galan has conducted a compelling scoping and PEA study, which indicates a competitive CAPEX of US$439 million and a low OPEX of US$3,518/t LCE, as well as a production rate of 20 kilotons per annum (ktpa) targeting battery-grade lithium carbonate across the property.
Candelas Project
The Candelas project is a 15-kilometer by 4-kilometer property along the prolific Los Patos channel in Argentina. The Rio Los Patos currently accounts for approximately 79 percent of incoming water in the salar, creating world-class lithium draining opportunities from source rocks in the Cerro Galan volcano. Project geophysics and drilling have indicated the potential for Candelas to host a substantial volume of brine and upwards of 685 kt LCE in maiden estimated resources.
The preliminary economic assessment (PEA) for the Candelas project showed a pre-tax NPV of US$1,225 million at an eight percent discount rate and an IRR of 27.9 percent with a four-year payback period. Candelas has a life projection of 25 years of 14 ktpa of battery-grade LCE. The cash production cost for lithium carbonate is at US$4,277/t, positioning the Candelas project as a low-cost developer in the lithium industry.
Candelas also leverages potential for evaporation ponds, processing infrastructure and has access to great, fresh process water. This advantageous positioning and exceptional geological and resource profile pose Candelas as a highly prospective world-class soluble lithium deposit.
Greenbushes South Lithium Project
The 100 percent owned Greenbushes South lithium project is located near Perth, Western Australia, and is three kilometers south of the world-class Greenbushes lithium mine, owned and managed by Talison Lithium Pty Ltd. The Greenbushes South lithium project tenements can be found along the Donnybrook-Bridgetown Shear Zone geologic structure, which hosts the lithium bearing pegmatites at the Greenbushes Lithium Mine.
Greenbushes South covers nearly 315 km², and hosts elevated pathfinder elements with well-defined anomalies adjacent to the property. Galan intends to commence a maiden drilling program at the newly defined Fry’s Block located within the Greenbushes South Lithium Project in Q1, 2023.
Management Team
Richard Homsany - Non-executive Chairman
Richard Homsany is an experienced corporate lawyer and has extensive board and operational experience in the resources and energy sectors. He is executive chairman of ASX listed uranium exploration and development company Toro Energy Limited, executive vice-president of Australia of TSX listed uranium exploration company Mega Uranium Ltd. and the principal of Cardinals Lawyers and Consultants, a boutique corporate and energy & resources law firm. He is also the chairman of the Health Insurance Fund of Australia Ltd (HIF) and listed Redstone Resources Limited and Central Iron Ore Limited and is a non-executive director of Brookside Energy Ltd. Homsany’s past career includes time working at the Minera Alumbrera Copper and Gold mine located in the Catamarca Province, northwest Argentina.
Juan Pablo (‘JP’) Vargas de la Vega - Managing Director and Company Founder
Juan Pablo Vargas de la Vega is a Chilean/Australian mineral industry professional with 18 years of broad experience in ASX mining companies, stockbroking and private equity firms. JP founded Galan in late 2017. He has been a specialist lithium analyst in Australia, has also operated a private copper business in Chile and worked for BHP, Rio Tinto and Codelco.
Daniel Jimenez - Non-executive Director
Daniel Jimenez is a civil, industrial engineer and has worked for a world leader in the lithium industry, Sociedad Química y Minera de Chile, for over 28 years. He was the vice-president of sales of lithium, iodine and industrial chemicals where he formulated the commercial strategy and marketing of SQM’s industrial products and was responsible for over US$900 million worth of estimated sales in 2018.
Christopher Chalwell - Non-executive Director
Christoper Chalwell has been involved in the gas to coal conversion of the Mica Creek Power station in Mt Isa and the Pasminco Century Mine in North Queensland. He also holds extensive experience with feasibility studies, commercial reviews for project funding, contract appraisal and award.
Terry Gardiner - Non-executive Director
Terry Gardiner has over 20 years of experience in capital markets, stockbroking and derivatives trading. Prior, Gardiner had many years trading in equities & derivatives for his family accounts. Gardiner is currently a director of stockbroking firm Barclay Wells Limited and a non-executive director of Cazaly Resources Limited.
Graeme Fox - Chief Financial Officer
Graeme Fox is an Australian CPA-qualified accountant and experienced business analyst, with over 25 years of experience in the mining, contracting and transport industries, with a focus on strategic planning, financial modeling, investment evaluation, management accounting and compliance. During the last 20 years, Fox’s career has been focused on the resources sector, including diverse roles throughout the value chain, working with BHP, WMC and Macmahon.