Galan Lithium launches $25m capital raising to fund Hombre Muerto West development
Galan Lithium (ASX: GLN) has launched a $25 million capital raising to fund further development of its flagship Hombre Muerto West (HMW) lithium project in Argentina’s Catamarca province.
The company has received firm commitments for a $12m placement to institutional, sophisticated and professional investors at $0.105 per share.
This represents an 8.7% discount to the last closing price of $0.115 and a 16.1% discount to the five-day volume-weighted average price of $0.125.
Chengdu Chemphys on board
China’s Chengdu Chemphys Chemical, which last month agreed to an offtake prepayment deal for a minimum of 23,000 tonnes of lithium carbonate equivalent (LCE) over the first five years of HMW’s Phase 1 production life, will also participate in the placement.
Chemphys will subscribe for up to $4.5m in shares, subject to the completion of a definitive offtake agreement.
Galan has announced a one-for-four non-renounceable entitlement offer to raise up to $13.3m at the same price as the placement shares.
Strong investor response
Managing director Juan Pablo Vargas de la Vega said the raising had been well-received by the investment community.
“We are delighted to welcome a number of new investors to our register as well as the participation of Chemphys, which further strengthens the relationship between our companies,” he said.
“Funds raised from the offer and the planned Chemphys prepayment provide the means for us to complete this development and keep our planned start to production in the second half of 2025.”
Priority focus
Last month, Galan said it was continuing its priority focus on construction works at the high-grade/low-impurity HMW project.
The company reported that Phase 1 lithium inventories were sitting at 3,200 tonnes of LCE in the site ponds and that it had connected new piping from the central northern part of the project, which saw pond flow increase by up to 50%.
“Amid challenging market conditions, we are moving forward with the development of HMW,” Mr Vargas de la Vega said.
“We remain confident about the economics which underpin this project and the future of the lithium market.”