The entire board, staff and key consultants at Galan Lithium (ASX: GLN) have participated in a $550,000 placement to fund continuing work on the company’s Hombre Muerto West lithium project in Argentina.
In what the company describes as “challenging times”, the fully subscribed placement was done at $0.14 per share – a 3.5% discount to the last closing price.
Professional and sophisticated investors, as well as directors, staff and consultants, took part in the placement which included one free unquoted option per share exercisable at $0.25 by 31 March 2022.
The money raised will be used to continuing scoping and pre-feasibility studies, commencement of further resource work and working capital.
Chairman Richard Homsany thanked investors for their strong support, loyalty and confidence.
“The success of the fundraising in unprecedented and most challenging circumstances is testament to the high quality of Galan’s management and projects,” he added.
Work continues on Argentine project
Last month, Galan released an inferred resource for its high grade brine Hombre Muerto West project, with the Pata Pila and Rana de Sal tenements comprising 1.08 million tonnes of contained lithium equivalent at 946 milligrams per litre lithium.
The company said work has not stopped even with the current lockdown restrictions in Chile and Argentina that are affecting operations in what is known as South America’s lithium triangle.
“We are very pleased to secure funds to complete the Hombre Muerto West acquisition and keep advancing our scoping study and pre-feasibility study,” Galan managing director Juan Pablo Vargas de la Vega said.
“The significant high-grade results from our maiden resource estimate for Hombre Muerto West are now part of a bigger picture with a total resource of 1.8Mt lithium carbonate equivalent (including Candelas) being modelled in our studies.”
“The value significant of what Galan has now acquired is two excellent projects, in the same flat, that are potentially economical as stand-alone projects, or combined, with a possible production target of 20,000t of lithium carbonate equivalent per year,” Mr Vargas de la Vega said.
He added the company was adhering to requirements regarding COVID-19 laid down by Australia, Argentina and Chile.
Galan’s team and contractors will continue to work remotely on engineering and test work for the scoping studies and pre-feasibility report.
Cash burn rates have been reduced significantly, both here and in Argentina, since January.
China’s extended EV subsidies provides boost for explorers
China has decided to extend its subsidies and tax exemptions for electric vehicle manufacture until 2022 in order to support its auto industry in the wake of the COVID-19 crisis.
The State Council in Beijing said the subsidies were one of a number of measures aimed at helping “all types of businesses to weather this difficult time”.
China is the largest market globally for EVs with 1.18 million units sold there last year.
With most EVs powered by lithium-ion batteries, this is expected to provide continued demand for lithium – providing a boost to miners and explorers alike.