Galan Lithium (ASX: GLN) has achieved another important step along the production pathway at its Hombre Muerto West (HMW) Phase 1 lithium brine project in Argentina.
Managing director Juan Pablo Vargas de la Vega told shareholders that the company’s success in accumulating an in-situ lithium mining inventory of more than 2,800 tonnes of lithium carbonate equivalent (LCE) was a key milestone.
“Our inventory will continue to increase as we have a low-energy cost operation that only requires brine pumps to operate,” he said.
“Once Galan finalises sales and funding arrangements, which are progressing well, the company will be in a strong position to produce a competitive low-cost lithium product.”
Lithium inventory
Galan revealed that its lithium inventories in the HMW Phase 1 ponds continue to build in line with feasibility study expectations.
The material in the ponds will provide the feedstock for the HMW processing plant.
The designed ponds system can allow an inventory, until H2 2025, of up to 10,000 tonnes per annum LCE without the need for processing.
Cash preservation
Mr Vargas de la Vega also reported that Galan has decided to rework its construction activities to preserve cash with a view to procuring both a definitive sales agreement and an associated funding package for the project in the short term.
“It should also be noted that we have received strong international market interest in our HMW lithium concentrate,” he said.
“In our view, this evidence indicates that the current lithium pricing environment and market oversupply is not expected to be a long-term trend.”
Progress made
Galan’s latest HMW Phase 1 project update estimated that overall completion now sits at approximately 40%, with the ponds system at 60% capacity.
The company said around 750,000 square metres of evaporation area has now been built, sufficient to produce a lithium chloride volume of approximately 3.0 kilotons per annum LCE.
“We are very proud of the solid progress made to date, especially in light of current market conditions,” Mr Vargas de la Vega told shareholders.
Four phases
The HMW project is being developed via four production phases.
Phase 1 is focused on the production of 5.4ktpa LCE by H2 2025, as governed by the approved production permits.
Phase 2 targets 21ktpa LCE in 2026, followed by Phase 3 production of 40ktpa LCE by 2028, and finally a Phase 4 production target of 60ktpa LCE by 2030.
Phase 4 will include lithium brine sourced from both HMW and Candelas, Galan’s other 100%-owned project in Argentina.
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