The companies have entered into an acquisition and joint venture agreement whereby Lithium Australia will divest a majority interest in the project to Galan, and Galan will be responsible for driving its development.
Under the terms of the agreement, Galan will issue 1.2 million fully-paid ordinary shares to Lithium Australia in return for an 80% equity and will pay the company’s joint venture expenditure share until completion of a preliminary feasibility study for the project.
At that point, the two companies will contribute on a pro-rata basis or Lithium Australia may dilute out but retain a 2% net smelter royalty.
Highly prospective project
Galan managing director Juan Pablo Vargas de la Vega said the company was “delighted” to acquire a majority stake in “highly prospective lithium project in a world-renowned lithium district”.
He added the project added to the company’s existing lithium exploration ground at Greenbushes.
Galan will explore the newly acquired tenements in a “methodical step-by-step manner”.
Previous work at the project has determined the presence of pegmatites that may host spodumene and offer up immediate exploration targets.
The project was previously mined for tin and tantalum.
“We are pleased to partner with Galan as a dedicated explorer which will drive the
Greenbushes South project forward,” Lithium Australia managing director Adrian Griffin said.
World-class lithium district
Located 200km south of Perth, Greenbushes South is spread across 353 square kilometres of acreage close to the world-class Greenbushes lithium mining and processing operation.
The project area commences approximately 3km south of the open pit mine, on tenure which covers the southern strike projection of the geological structure which hosts the mine.
Greenbushes is currently the largest hard-rock lithium mine in the world and has been operated since 2014 by Talison Lithium Pty Ltd, which is an incorporated joint venture between China’s Tianqi Lithium Corporation (51%) and US-based Albemarle Corporation (49%).
The mine produces a spodumene concentrate to feed Chinese and WA-based mineral conversion plants, and is also exported to markets in Europe and North America.
Last month, Australian mining company IGO Limited (ASX: IGO) signed a $1.9 billion deal to acquire a 24.99% stake in Greenbushes from Tianqi.
Hombre Muerto West remains focus
Although excited about the Greenbushes South acquisition and its potential, Mr Vargas de la Vega said Galan’s focus remains its tier one Hombre Muerto West lithium brine asset in Argentina.
“We have secured an outstanding exploration opportunity in WA to add to our existing portfolio of assets in Argentina that have a potential production profile.”