A$19.5 Million Equity Raising to Fund Ongoing Development of HMW Phase 1

Galan Lithium Limited (ASX: GLN) (Galan or the Company) is very pleased to announce that it is undertaking an equity raising of A$19.5¹ million having secured firm commitments of A$18.0 million to institutional, sophisticated and professional investors (Placement) and intends to undertake a non- underwritten Share Purchase Plan (SPP) offer of A$1.5 million to existing Galan shareholders.

Highlights:

• Galan has received firm commitments to raise A$18 million at A$0.46 per share
• Strong support received from offshore and domestic institutional and sophisticated investors, with the Placement oversubscribed
• Galan board and management to subscribe for A$1.5 million subject to shareholder approval
• Funds will be used for ongoing HMW Phase 1 development costs, exploration and resource work, corporate overheads and working capital

The equity raising enhances Galan’s balance sheet by providing additional working capital and financial flexibility during Hombre Muerto West (HMW) Phase 1 construction and provides sufficient working capital headroom whilst Galan finalizes negotiations of alternative funding solutions including debt and prepayment facilities that will enable completion of HMW Phase 1. Proceeds from the Placement will be applied to:

• Remaining HMW phase 1 developments costs;
• Exploration and resource work; and
• Corporate overheads, working capital and transaction costs

Canaccord Genuity (Australia) Limited and Jett Capital Advisors LLC acted as Joint Lead Managers and Bookrunners to the Placement.

Galan’s Managing Director, Juan Pablo (JP) Vargas de la Vega, commented: “We are very pleased with the outcome of the placement considering the tougher market conditions at the moment. The strong support from both new and existing institutional investors is a clear endorsement of Galan’s timely path to low cost, Phase 1 production at its 100% owned Hombre Muerto West lithium brine project in Argentina.”

Placement

Under the Placement, the Company will issue 35,869,565 fully paid ordinary shares in the Company at A$0.46 per share (New Shares) plus 35,869,565 quoted options (exercisable at $0.65 with a 5 year exercise period) (New Options), raising a total of A$16.5 million (before costs), to institutional, sophisticated and professional investors. Additionally, Galan director’s will be subscribing for 3,260,870 New Shares plus 3,260,870 New Options on the same terms raising a total of A$1.5 million (before costs) (“Director Placement”) in a second tranche that will be subject to shareholder approval at a forthcoming General Meeting (GM).

The issue price of A$0.46 per share, represents a 14.8% discount to the last closing price of A$0.54 on 25 January 2024 and a 23.5% discount to the 15-day VWAP of A$0.60 as at the same date.

The New Shares and New Options will be issued under the Company’s existing placement capacity under ASX Listing Rules 7.1 and 7.1A. The Placement is not underwritten.

Indicative Placement Timetable

*These dates are indicative only. The Company reserves the right to vary the dates without notice.

Share Purchase Plan (SPP)

In addition to the Placement, the Company will offer all eligible existing Australian and New Zealand shareholders (including retail shareholders) the opportunity to apply for new GLN shares, at the same issue price and same terms and conditions as the Placement. The issue price will be $0.46 per share and will include one listed option (exercisable at $0.65 with a 5 year exercise period) on a one for one basis, without brokerage fees.

Galan intends to raise up to A$1.5 million and retains discretion over the allocation of shares per investor. The SPP will allow eligible shareholders to apply for the maximum allowed of $30,000 of new fully paid ordinary shares, per shareholder.

The SPP is not underwritten. An SPP booklet containing further terms and conditions of the SPP is expected to be provided to eligible shareholders in the next week or so.

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