Galan Lithium hits 40% completion rate at Hombre Muerto West Phase 1
Galan Lithium (ASX: GLN) has continued its priority focus on construction works at the wholly-owned, high-grade/low-impurity Hombre Muerto West (HMW) lithium project in Argentina’s Catamarca province.
The company said overall completion of Phase 1 sits at approximately 40% with the pond system currently at 60% capacity and lithium inventories that will provide the feedstock for the processing plant are building in the ponds in line with feasibility study expectations.
The system can support an inventory of up to 10,000 tonnes per annum lithium carbonate equivalent (LCE) until mid-2025 without the need for processing.
Evaporation area
Approximately 750,000 square metres of evaporation area have been built to house 3,000t of LCE-contained inventory.
Key processing parameters including average flow rates, lithium grades, and evaporation rates are aligned with the Phase 1 definitive feasibility study and first production remains on track for the first half of 2025.
Galan has reworked its construction activities in recent weeks to preserve cash with a view to procuring a definitive sales agreement and associated funding package in the short term.
During the period, the company analysed trade-off exercise scenarios and options to further reduce capital expenditure, focusing on selecting the minimum infrastructure required for the commencement of production.
Co-funding grant
Galan was awarded a co-funding grant of up to $220,000 in July for diamond drilling under the Western Australian government’s Exploration Incentive Scheme.
The funding – which will support the drilling of new pegmatites along the strike of the Donnybrook-Bridgetown Shear Zone – was the first grant to be awarded in the south-west and highlights the government’s intention to encourage the exploration of critical minerals and lithium in the region.
In April, Galan and representatives from the Karri Karrak Aboriginal Corporation performed an ethnographic and archaeological heritage survey on lithium target areas and confirmed that no heritage sites or places are present.
Equity raising
Galan completed a $13.3 million equity raising during the quarter via the placement of 57.8 million shares and 28.9 million options.
Approval for director participation allowed for a further $1.1m to be raised.
Proceeds of the placement will be used for HMW Phase 1 construction activities, corporate costs and working capital purposes.
The company also entered into an at-the-market subscription deed with Acuity Capital in April, providing up to $15m of standby equity capital until 2029.
At the end of the June quarter, Galan had cash resources and liquid assets of approximately $6 million.
Project expenditure in the September quarter is expected to be significantly lower due to the changing pace of construction activities at HMW and company-wide cost-saving measures.