Galan Lithium acquires Lithium Australia’s 20% equity in Greenbushes South project
Mapping at Greenbushes South has identified the same geological structure within the project that is found at the nearby world class Greenbushes open pit spodumene mine.
Galan Lithium (ASX: GLN) has confirmed it will acquire Lithium Australia’s (ASX: LIT) 20% interest in the highly-prospective Greenbushes South lithium project in Western Australia.
Consideration for the acquisition will be $2 million in cash, plus the issue of $1 million worth of fully paid Galan shares to Lithium Australia, calculated on the volume weighted average price for the five days preceding completion of the sale.
Lithium Australia will retain first right to negotiate an offtake agreement with Galan relating to 20% of Galan’s share of future commercial volumes of lithium product.
To qualify for the first right, Lithium Australia must make a financial investment decision announcement before the end of 2029 relating to the construction of a commercial facility to produce lithium metal phosphate cathode powders.
Once Galan has completed the acquisition, the joint venture will terminate and Galan will assume 100% ownership of the project.
Greenbushes South lithium project
Greenbushes South comprises four granted exploration licences, one pending licence and seven prospecting licences over approximately 315 square kilometres south of Perth.
It was originally acquired by Lithium Australia for its predicted strike projection of the geological structure associated with the nearby world-class Greenbushes lithium mine.
The mine is currently the largest hard-rock lithium operation in the world and has been in production since 1983.
In March, Galan flew an airborne geophysics survey to develop pegmatite targets for all of its tenements at Greenbushes.
In August, a pegmatite associated with spodumene-bearing rocks was discovered and further geological mapping, soil sampling and geophysical investigations are being used to determine drill targets.
Galan is conducting similar geophysical work at its other granted tenements within the region.
Full ownership
Managing director JP Vargas de la Vega said the move to full ownership of Greenbushes South consolidates the company’s package of exploration ground in a world-class lithium district.
“This is a highly-prospective project in one of the world’s most renowned lithium districts and we are excited with what is to come,” he said.
“We have the personnel in place to carry out the exploration workload and are in total control of our destiny with full ownership.”
Lithium chemical rights
Lithium Australia chief financial officer Stuart Tarrant said the company was pleased to be able to secure rights to lithium chemicals under the acquisition agreement.
“Our primary focus areas are the growth of our battery recycling division and the commercialisation of lithium ferro phosphate cathode powders and a key risk for that is the availability of lithium chemicals which have the potential to become scarce alongside increasing demand from the electric vehicle sector,” he said.
“Converting our investment into listed equity ensures that any upside generated by Galan at the Greenbushes South project can be more readily realised by Lithium Australia.”