HMW Project Achieves 1,000t LCE Contained Inventory as Lithium Chloride Production Journey on Track

Galan Lithium Limited (ASX:GLN) (Galan or the Company) is pleased to provide a further update on the progress of construction activities at its 100% owned Hombre Muerto West (HMW) Phase 1 lithium brine project, with lithium chloride production expected in H1 2025. Galan continues its steady progress in advancing its low cost, high grade HMW project to production in a timely manner.

HMW Project Update

• Pond 1 and 2 evaporation continues; approx 1,000t LCE contained inventory
• Pond 3 earthworks almost complete, liner installation at 60% and filling of pond 3 commenced; Pond 4 earthworks have commenced
• Overall project completion now at 33%, with pond construction 45% complete; project execution is advancing as planned
• Aligning with the physical progress of the project, capital expenditure also sits at 33% of the Phase 1 budget
• Key processing parameters; average brine flow rate, average Li grade from wells and evaporation rates in line with the Feasibility Study. The project remains on track to commence production in H1 2025
• Opportunities to reduce the Capex and Opex for HMW Phase 1 identified; engineering and procurement teams working to quantify these opportunities within the next two months
• Low all-in sustaining costs; HMW is expected to be in the 1st quartile of lithium industry’s cost curve with an initial reserve estimate of 40 years
• Phase 2 Operating cost to LiCl concentrate of $US3,510/t LCE equates to a low Li2O equivalent operating cost of SC6 (Spodumene Concentrate) $US310/t-$US350/t; solid production margins at current spot prices
• Following the recent agreement signed with the Catamarca government, offtake and funding discussions are advancing; Glencore due diligence process continues.

In addition, Galan’s team are analysing options to reduce capital expenditure, these opportunities are focussed on selecting the minimum infrastructure required to commence production of Phase 1. Multiple trade-off exercises are being assessed such as the analysis of rental options for energy supply, reduction of the size for selected buildings, usage of independent smaller control systems, instead of a larger central control system for all facilities.

As previously announced, the HMW project was separated into four production phases. The initial Phase 1 Definitive Feasibility Study (DFS) focused on the production of 5.4ktpa LCE of a lithium chloride concentrate by H1 2025, as governed by the approved production permits. The Phase 2 DFS targets 21ktpa LCE of a lithium chloride concentrate in 2026, followed by Phase 3 production of 40ktpa LCE by 2028 and finally a Phase 4 production target of 60ktpa LCE by 2030. Phase 4 will include lithium brine sourced from both HMW and Galan’s other 100% owned project in Argentina, Candelas. The very positive Phase 2 DFS results were announced on 3 October 2023 (https://wcsecure.weblink.com.au/pdf/GLN/02720109.pdf).

Ponds 1 and 2 completed with evaporation continuing

Pond 3 liner installation and Pond 4 earthworks

Galan’s Managing Director, Juan Pablo (JP) Vargas de la Vega, commented:

“We are very proud of the solid progress being made by the HMW Phase 1 construction team. With more than one third of the project completion now achieved, Galan is well on its way towards its targeted commencement of production in H1 2025. Galan would like to acknowledge and sincerely thank the Government of the Catamarca Province in Argentina for their continued support, evidenced by the recent agreement signed to commercialise lithium chloride concentrate from HMW. We are excited about the opportunities this agreement now presents to Galan’s future”

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