Phase 2 DFS Confirms Tier One Status of Hombre Muerto West (HMW) Lithium Brine Project in Argentina

Galan Lithium Limited (ASX: GLN) (Galan or the Company) is very pleased to announce the results of the Phase 2 Definitive Feasibility Study (DFS) for its 100% owned Hombre Muerto West (HMW) Project (HMW Project or the Project) in Catamarca Province, Argentina.

• Tier one Phase 2 DFS results; HMW Project produces a premium high grade lithium chloride (LiCl) concentrate of 6% Li, comparable to 13% Li2O or 32% Lithium Carbonate Equivalent (LCE) in H2 2026, and delivers the following strong financial outcomes:
  • Post-tax NPV8% US$2 billion, IRR 43% free cash flow US$236m pa (pretax NPV8% US$3.1 billion)
  • Short Payback Phase 1 & 2 of 2.9 years
  • Increased Production to 21Ktpa LCE up from 5.4Ktpa LCE in Phase 1
  • Moderate Incremental CAPEX of US$278m (additional to Phase 1 Capex US$104m). Total Phase 1 & 2 Capex US$382m (ex-contingency)
  • Low Operating Cost of US$3,510/t LCE (excludes conversion cost from LiCl to lithium carbonate)
  • Phase 1 construction has commenced with first production H1 2025
• Low all-in sustaining costs; HMW is in the 1st quartile of industry’s cost curve
• Capex & Opex intensity reduced by 7% & 11% respectively (from Phase 1 DFS); future potential reduction for key cost drivers •
• High Li recovery (68.5%) with further process optimisation underway
• Strong 40 year Ore Reserve 806kt LCE @ 864 mg/Li; resource upside remains
• Long term average payable price assumed for LiCl 6% Li US$22,841/t LCE, long term average lithium carbonate price US$29,000/t LCE
• Robust Financial Outcomes of HMW Phase 2 DFS – majority of costs are based directly in USD, reducing the impact of local currency fluctuation
• Advanced negotiations for offtake/funding options for Phase 1 underway
• Galan’s robust 4 phase production strategy (up to 60ktpa LCE) provides an exceptional foundation for significant future economic upside

The HMW Project DFS was separated into two phases. The initial Phase 1 DFS was based on a production level of 5.37 ktpa lithium carbonate equivalent (LCE) in the form of lithium chloride concentrate (as governed by the production permits).

The Phase 2 DFS has increased the overall annual production rate to 20,851 recoverable tonnes LCE, contained in a concentrated lithium chloride product for a period of 40 years. The Phase 2 DFS results and analysis have provided outstanding outcomes that confirm Galan’s belief that the HMW Project is a tier one project in the lithium brine industry.

Galan’s Managing Director Juan Pablo (JP) Vargas de la Vega commented on the Phase 2 DFS Results:

“The release of the Phase 2 DFS for Hombre Muerto West clearly demonstrate the world-class nature of Galan’s 100% owned Project. The production volumes and low cost of production from HMW means it is truly worthy of being considered a tier one lithium brine project. These results fully support our DFS reevaluation process and long-term production strategy, delivering a high-quality lithium chloride product into the market and providing Galan with strong early cash flows. The Board is delighted to report these outstanding financial outcomes for the Project Phase 2 DFS which are robust and include an approximate 2.9-year payback and a USD 2 billion Project NPV. Thanks to our loyal project and corporate teamsthat have worked cohesively and tirelessly to deliver these outstanding results. We are also very grateful for the supportive government policies in place, and our local community support, which have enabled us to demonstrate the enhanced feasibility of the Project.

We are extremely confident about the future of HMW, both in the short and long term. Construction of Phase 1 is already well underway with the first evaporation pond already 15% complete. Galan looks forward to updating shareholders and investors as development continues into future phases to accelerate and ramp up production.”

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