Galan Lithium cuts capital costs at Argentine project with larger evaporation pond

Galan Lithium ASX GLN Hombre Muerto West Project HMW pond feasibility study capex Argentina
Galan has found a way to lower its initial outlay for the Hombre Muerto West lithium brine project.

By increasing the size of the evaporation pond, Galan Lithium (ASX: GLN) will be able to develop its Hombre Muerto West (HMW) lithium brine project in Argentina in two stages rather than one.

This increase from 5.5 million square metres to 7 million sqm and subsequent staged approach will improve the capital cost profile, while lowering the initial outlay, the company announced today.

Galan has completed a new review of its flagship HMW project in Argentina’s “lithium triangle” which it says is positive.

Plus, it has completed some early milestones, including positive evaporation tests.

Together these have increased the potential value of the project, the company added.

Production rate confirmed by review

The review confirms the HMW project will produce 25,000 tonnes per annum of lithium carbonate equivalent (LCE) through optimising the terrain available to it.

Stage one of the new pond plan will have the advantage of using the most favourable terrain and will minimise the upfront capital outlay per tonne of LCE produced.

Stage two will, at a later stage, increase the pond in a terrain with a higher level of incline. There is also ground to the west that could be used for evaporation ponds.

Galan managing director Juan Pablo Vargas de la Vega said the company is continuing to strengthen and broaden the flexibility of HMW with a view to production as soon as possible.

“Our team is confident of the HMW project’s potential to increase its production levels up to 25,000tpa in the next feasibility studies,” he said.

“The Galan team continues to look at solutions to grow and make HMW as robust and as low risk as possible by using proven technology.”

Battery grade test work ‘well advanced’

In another development, the company said new evaporation tests continue to achieve high-grade lithium chloride concentrate in excess of 6% lithium — and with low impurities.

It added that evaporation work is continuing with a view to taking the best reagent solution forward to the feasibility studies, as well as during pilot tests on site.

Test work for battery grade lithium carbonate has been delayed “slightly” due to the continuing spread of COVID-19 in Antofagasta where the laboratory work is being conducted.

However, this problem has now been resolved.

Galan had to change the laboratory facilities to develop all stages of the test work, introducing extra time to get the necessary equipment.

The company said test completion is now expected in the current September quarter and described the work as ‘well advanced’.

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