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Galan Lithium
Overview
Argentina is no stranger to lithium mining. The South American nation is one of three encompassed in the prolific Lithium Triangle, a region that holds more than half of the world’s lithium deposits. Argentina ranks third in the world in terms of lithium reserves at 2.7 million metric tons (MT), concentrating lithium operations in the provinces of Jujuy, Salta and Catamarca.
Amidst electrification and decarbonization, analysts have forecasted a global supply deficit of 89,000 tons of lithium carbonate equivalent (LCE) in 2023 and the Argentinian government aims to double down on lithium to meet the increasing demand. Argentina has committed to $7 billion worth of investment for lithium production with strong growth projected for exports at $1.1 billion in 2023.
Galan Lithium (ASX:GLN,FSX:9CH) is an Australia-based international mining development company focused on its high-quality lithium brine projects in Argentina – Hombre Muerto West and Candelas. The company also holds a highly prospective lithium project in Australia – Greenbushes South.
The company’s flagship Hombre Muerto West (HMW) project hosts some of Argentina’s highest grade and lowest impurity levels with an inventory of 8.6 million tons (Mt) contained LCE @ 859 mg/L lithium, with 4.7 Mt contained LCE @ 866 mg/L Li in the measured category. The 100-percent-owned property also leverages close proximity to Livent Corporation’s El Fenix operation and Allkem’s Sal de Vida projects.
Galan has signed a commercial agreement with the Catamarca Government supporting the grant of permits to enable the commercialisation of lithium chloride concentrate from HMW to be sold locally or exported internationally.
In August 2024, Galan entered into a memorandum of understanding with Chengdu Chemphys Chemical Industry Co. for a prepayment offtake agreement pertaining to the HMW project. Once a definitive agreement is executed, Chemphys will purchase a total of 23,000 tonnes lithium carbonate equivalent, as a lithium chloride product, over the first five years of production from Phase 1 of the HMW project. Chemphys will also provide Galan with a US$40 million offtake prepayment facility to facilitate the continued development of Phase 1 of the HMW project.
Catamarca Governor Raúl Jalil and Galan Lithium Managing Director Juan Pablo Vargas de la Vega in Catamarca.
Galan’s secondary Candelas project comprises a sizable valley-filled channel with a potential indicated presence of substantially high-volume brine characteristics. The project’s maiden resource estimates stand upwards of 685 kilotons (kt) LCE, based on surveying from October 2019, and demonstrate exceptional discovery opportunities across this underexplored asset. Candelas has been rolled into Phase 4 of Galan’s targeted expansion plans, towards 60 ktpa LCE production by 2030.
Galan’s 100-percent-owned Greenbushes South Project is located in Western Australia and boasts advantageous positioning 3 kilometers south of the prolific Greenbushes lithium mine owned by Talison, Tianqi, IGO and Albermarle. Drilling of the first target was completed in July 2023. Galan is currently developing land access agreements for future drilling campaigns at Greenbushes South. An exploration license has been granted to the company for an additional key tenement, E70/4629 targeting lithium-bearing pegmatites for five years to February 2029. The tenement is approximately 260 kilometres south of Perth, the capital of Western Australia, and less than 30 kilometres south of the Greenbushes pegmatite at the Greenbushes Mine.
In 2023, Galan entered into an exclusive binding agreement with Redstone Resources to acquire 100 percent of the Camaro-Taiga-Hellcat property blocks from Infinity Stone Ventures (CSE:GEMS,GEMSF,FSE:B2I). The assets are located in the world-class James Bay Lithium Province in Quebec, collectively covering 5,187 hectares. The joint venture also includes an option to acquire 100 percent of the PAK East and PAK Southeast Lithium Project, spanning 1,415 hectares in Ontario’s Electric Avenue near Frontier Lithium’s PAK Lithium Project.
Galan has a highly experienced management team with over a century of professional expertise in the resource, finance and energy sectors. This results-oriented board and their vested interest in the company's success prime Galan for exceptional discovery potential and advanced development of its high-quality projects.
Company Highlights
- Galan Lithium is an ASX-listed company developing lithium brine projects within South America’s lithium triangle on the Hombre Muerto salar in Argentina.
- The company has two high-quality projects in the works: its flagship Hombre Muerto West (HMW) and the Candelas lithium project, both in Argentina. The two projects combined bring the company’s current total mineral resource estimate to 8.6 million tons lithium carbonate equivalent @ 859 mg/L lithium.
- HMW leverages advantageous positioning near notable mining operations, including Livent Corporation’s El Felix project and hosts exceptional high-grade lithium and low impurity resources.
- The HMW Phase 1 (5.4 ktpa LCE) execution plan is progressing well with the delivery of the first evaporation-ready pond expected in 2024, and production in H1 2025.
- The HMW Phase 2 definitive feasibility study (DFS) delivers compelling economics with 21 kilo-tons per annum (ktpa) lithium carbonate equivalent (LCE) operation at HMW, targeting a high-quality, 6 percent concentrated lithium chloride product (equivalent to 12.9 percent lithium oxide or 31.9 percent LCE) in 2026.
- Galan has signed a commercial agreement with the Catamarca Government enabling the commercialisation of lithium chloride concentrate from HMW to be sold locally or exported internationally.
- Galan is transitioning into a major lithium project developer and remains committed to conducting fast-tracked lithium development in its prolific projects with a target production of 60 ktpa LCE from HMW and Candelas by 2030.
Key Projects
Hombre Muerto West Project
The 100-percent-owned Hombre Muerto West project is a large land property that sits on the west coast of the Hombre Muerto salar in Argentina, the second-best salar in the world for the production of lithium from brines. The property also leverages strategic positioning adjacent to notable competitors like Livent to the east.
Galan has increased HMW’s mineral resource to 8.6 Mt contained LCE @ 859 mg/L lithium (previously 7.3 Mt LCE @852 mg/L lithium), one of the highest grade resource estimates declared in Argentina. HMW’s measured resource is now at 4.7 Mt contained LCE @ 866mg/L lithium. Inclusion of the Catalina tenure adds ~1.3 Mt LCE to the HMW resource.
The pilot plant at HMW has validated the production of lithium chlorine concentrate, adding reagents to eliminate impurities, and generating a concentrate at 6 percent lithium. The plant comprises pre-concentration ponds, a lime plant, a filter press and concentration ponds.
Pilot Plant at HMW
Construction for Phase I has already commenced for 5.4 ktpa LCE production at HMW, and aims to deliver lithium chloride production in H1 2025. The fourth long-term pumping test (PBRS-03-23) results at HMW record an outstanding lithium mean grade of 981 mg/L - the highest reported grade from a production well in the Hombre Muerto Salar.
In April 2024, Galan announced 33 percent project completion with pond construction at 45 percent and project execution is advancing as planned.
A definitive feasibility study (DFS) for phase 2 shows a 20.85 ktpa LCE operation at HMW, targeting high-quality, 6 percent concentrated lithium chloride product (equivalent to 12.9 percent lithium oxide or 31.9 percent LCE) in 2026. The DFS also indicated phase 2 will deliver a post-tax NPV (8 percent) of US$2 billion, IRR of 43 percent and free cash flow of US$236 million per year. Phase 2 provides an exceptional foundation for significant economic upside in phases 3 and 4, targeting 60 ktpa LCE production by 2030.
The company has signed a binding term sheet with a wholly owned subsidiary of Glencore for offtake of up to 100 percent of its premium lithium chloride concentrate from HMW, and the offer to provide or facilitate a secured financing prepayment facility for US$70 to US$100 million, subject to conditions precedent being met.
Galan also entered into a memorandum of understanding with Chengdu Chemphys Chemical Industry Co. for a prepayment offtake agreement. Once a definitive agreement is executed, Chemphys will purchase a total of 23,000 tonnes lithium carbonate equivalent, as a lithium chloride product, over the first five years of production from Phase 1 of the HMW project. Chemphys will also provide Galan with a US$40 million offtake prepayment facility to facilitate the continued development of the HMW project.
Galan is targeting first-phase HMW lithium concentrate production in H1 2025
Galan now has 100 percent full ownership of the Catalina tenement that borders the Catamarca and Salta Provinces in Argentina. The newly secured Catalina tenure has a strong potential to significantly add to the existing HMW resource. The tenure also covers the Catalina, Rana de Sal II, Rana de Sal III, Pucara del Salar, Deseo I and Deceo II tenements.
Greenbushes South Lithium Project
The 100-percent-owned Greenbushes South lithium project is located near Perth, Western Australia, and is three kilometers south of the world-class Greenbushes lithium mine, managed by Talison Lithium. The Greenbushes South tenements can be found along the Donnybrook-Bridgetown Shear Zone geologic structure, which hosts the lithium-bearing pegmatites at the Greenbushes Lithium Mine.
Greenbushes South covers nearly 315 square kilometers, and hosts elevated pathfinder elements with well-defined anomalies adjacent to the property.
Management Team
Richard Homsany - Non-executive Chairman
Richard Homsany is an experienced corporate lawyer and has extensive board and operational experience in the resources and energy sectors. He is the executive chairman of ASX-listed uranium exploration and development company Toro Energy Limited, executive vice-president of Australia of TSX-listed uranium exploration company Mega Uranium and the principal of Cardinals Lawyers and Consultants, a boutique corporate and energy & resources law firm. He is also the chairman of the Health Insurance Fund of Australia (HIF) and listed Redstone Resources and Central Iron Ore and is a non-executive director of Brookside Energy Homsany’s past career includes time working at the Minera Alumbrera Copper and Gold mine located in the Catamarca Province, northwest Argentina.
Juan Pablo (‘JP’) Vargas de la Vega - Founder and Managing Director
Juan Pablo Vargas de la Vega is a Chilean/Australian mineral industry professional with 20 years of broad experience in ASX mining companies, stockbroking and private equity firms. JP founded Galan in late 2017. He has been a specialist lithium analyst in Australia, has also operated a private copper business in Chile and worked for BHP, Rio Tinto and Codelco.
Daniel Jimenez - Non-executive Director
Daniel Jimenez is a civil and industrial engineer and has worked for a world leader in the lithium industry, Sociedad Química y Minera de Chile, for over 28 years. He was the vice-president of sales of lithium, iodine and industrial chemicals where he formulated the commercial strategy and marketing of SQM’s industrial products and was responsible for over US$900 million worth of estimated sales in 2018.
Terry Gardiner - Non-executive Director
Terry Gardiner has 25 years’ experience in capital markets, stockbroking and derivatives trading. Prior to that, he had many years of trading in equities and derivatives for his family accounts. He is currently a director of boutique stockbroking firm Barclay Wells, a non-executive director of Cazaly Resources, and non-executive chairman of Charger Metals NL. He also holds non-executive positions with other ASX-listed entities.
María Claudia Pohl Ibáñez - Non-executive Director
María Claudia Pohl Ibáñez is an industrial civil industrial engineer with extensive experience in the lithium production industry. Until recently, she worked for world leader in the lithium industry Sociedad Química y Minera de Chile (NYSE:SQM, Santiago Stock Exchange:SQM-A, SQM-B) for 23 years, based in Santiago, Chile. During her time at SQM, she held numerous senior leadership roles including overseeing lithium planning and studies. Ibáñez brings significant lithium project evaluation and operational experience whilst joining the board at a critical juncture in Galan’s journey to becoming a significant South American lithium producer. Since leaving SQM in late 2021, Ibáñez has been managing partner and general manager of Chile-based Ad-Infinitum, a process engineering consultancy, with a specific focus on lithium brine projects under study and development, and the associated project evaluations.
Ross Dinsdale - Chief Financial Officer
Ross Dinsdale has 18 years of extensive experience across capital markets, equity research, investment banking and executive roles in the natural resources sector. He has held positions with Goldman Sachs, Azure Capital and more recently he acted as CFO for Mallee Resources. He is a CFA charter holder, has a Bachelor of Commerce and holds a Graduate Diploma in Applied Finance.
MLS Continues to Advance and Expand its Flagship Lac Carheil Graphite Project Towards PFS
- Comprehensive metallurgical testwork1 confirming higher quantities of higher-value coarse flake graphite in the Northwest zone of the Mineral Resource2 (Figure 1 & Table 1), with average mass recoveries of 32.4% in the + 100# product fraction (+149 micron), compared to ~ 25.5% in the Southeast portion of the resource. This represents a 27% increase in the proportion of coarse flake graphite in this zone of the resource where coarse flake attracts premium pricing, as outlined in our scoping study3.
- Enhanced processing capability achieved in design updates to the flake graphite concentrator flowsheet4 to maximise recovery of coarse flake and optimise production efficiency - at an initial production rate of 100,000 tonnes per annum of concentrate (+95% Graphitic Carbon - Cg) (Figure 2).
- Land holding at Lac Carheil increased by 62% to 11,905 hectares through pegging of further claims covering potential southeast extensions of the existing resource and for placement of key infrastructure.
- Downstream design work4 set to commence to test and select the preferred graphite purification technology, conduct a plant site location study and develop a Project Economic Assessment (PEA) for the downstream Battery Anode Material (BAM) refinery, with a bulk concentrate sample being generated by SGS Canada for shipment to Dorfner Anzaplan facilities in Germany.
- Applications lodged with Government agencies to access grants under various funding programs, with further submissions planned, to advance Pre-Feasibility Study.
- Extensive local consultation and engagement with consultants, contractors, government and First Nations organisations, including the economic development arm of the Uashat Mak Mani-Utenam, in line with the Company’s commitment to establish a socially acceptable project for all stakeholders.
- Contract award readiness for additional work scopes integral to the broader PFS study following approval of a drilling permit, including Mineral Resource Estimation, mining design and scheduling and Environmental and Social Impact Assessment (ESIA) studies.
In addition to the advancements being made by the Company, the strategic value of the Lac Carheil high- grade flake-graphite project stands to be significantly enhanced from the outcome of a 30-day consultation period announced by the Canadian Government on August 26th 2024 (September 10 to October 10, 2024) seeking inputs on the potential application of a surtax on a range of Chinese imports related to critical manufacturing sectors, including critical minerals.
This follows the imposition of a 100% surtax on Chinese-made EVs due to come into effect on October 1, 2024, and a 25% surtax on imports of steel and aluminium from China, effective October 15, 2024. Lac Carheil’s strategic significance is also linked directly to, and referenced in, Quebec’s Plan for The Development of Strategic Minerals5 (2020-2025).
Based on its reviews of the projects outlined in the above plan, Metals Australia is unaware of any graphite projects actively progressing in Canada that have both the resource grade and upside potential that Lac Carheil exhibits.
Figure 1 - Lac Carheil Graphite Project – Existing Mineral Resource Locations2 (grey shading / black hole positions) & planned resource extension and infill drilling (blue holes). Location of Quebec Hydro High Voltage Powerline Corridor (dashed line) & general topography.
Metals Australia CEO Paul Ferguson commented:
“We are delighted to report progress on multiple fronts at Lac Carheil as we continue to advance our flagship high- grade flake-graphite project in Quebec to Pre-Feasibility Study status.
This progress comes as we wrap up our phase one field exploration program at our Corvette River project in Canada, where we expect to receive assay results later this month, and the recent launch of aggressive exploration programs across our three Australian gold and critical minerals projects – Warrambie, Big Bell North and Warrego East.
Over the last couple of weeks, I have had the pleasure of engaging in person with a broad range of stakeholders on country in Ontario and Quebec regarding the development of Lac Carheil. The very clear message from those discussions is that our project is rapidly developing a profile as one of the best graphite projects advancing in North America today.
Earlier this week, the Lac Carheil project received a further potential tailwind when Canada’s Department of Finance launched a 30-day consultation process on a range of potential new surtaxes, including on critical minerals, in response to what it claimed were unfair Chinese trade practices. The Government has already shown its teeth on this issue by imposing a 100% surtax on all Chinese-made EVs, effective October 1, 2024, and a 25% surtax on imports of steel and aluminium, effective October 15, 2024.
Our project can contribute to forecasted shortfalls of graphite required to meet national and homeland security requirements across North America. This future stands in stark contrast to the state of domestic market supply for graphite in North America today. There is extremely limited onshore production of graphite in North America. Nearly all graphite used in the growing North American battery industry is sourced from offshore jurisdictions. This places Lac Carheil as a project of strategic importance for a domestic supply of high-quality graphite. This is essential for securing the supply chain certainty required for the clean energy transition.
The work we committed to completing as part of our planned PFS is rapidly advancing. Comprehensive metallurgical test work for the PFS level flowsheet design of the planned 100,000 tonnes per annum concentrate plant is well progressed – as are the plant designs for the concentrate plant. We are very close to dispatching the bulk concentrate sample to Germany that will launch the downstream design phase of the project, on schedule.
The design work to date has also given rise to a prioritised list of follow-up projects that we intend to further refine and progress as we move from PFS level studies and into the Feasibility Study design. We have held discussions related to grant funding avenues in Canada, including in Quebec, and in the USA, with funding applications made and more to follow. The work we are proposing is innovative and the solutions to be generated match well with the criteria set by governments for grant funding.
While our recent endeavours have focused heavily on the engineering and scientific elements of design, we are cognizant of our need to engage broadly with stakeholders and communities to ensure we understand their concerns, identify solutions as we look to establish enduring partnerships with those communities and stakeholders.
In that regard, a large focus of my recent trip was spent engaging with government at the provincial and local levels and speaking with stakeholders, including existing and prospective service providers, First Nations economic development groups and to seek further meetings with governments and First Nations communities. I was appreciative of the many groups we were able to speak with face to face and to those who have committed to follow up discussions.
As a board and management team, we remain dedicated to collaborating with all stakeholders to develop this strategically significant project for the betterment of all.”
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This article includes content from Metals Australia Ltd, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Galan Lithium Investor Kit
- Corporate info
- Insights
- Growth strategies
- Upcoming projects