Up to ~A$25 Million Capital Raise to Support Full Funding of HMW Phase 1

Galan Lithium Limited (ASX: GLN) (Galan or the Company) is pleased to announce the launch of a capital raising of up to A$25 million. The Company has received firm commitments for a Placement of approximately A$12 million (before costs) to institutional, sophisticated, professional investors and Chemphys at A$0.105 per share.

Highlights:

• Galan has received firm commitments to raise A$12 million via a placement at A$0.105 per share (Placement)
• Galan launches up to A$13.3 million 1 for 4 non-renounceable entitlement offer (Entitlement Offer) at the same price as the Placement
• Offtake partner Chemphys to subscribe for US$3 million (A$4.5 million) under the Placement, subject to completion of definitive agreements
• Proceeds of the capital raising together with the planned Chemphys Offtake Prepayment are expected to fund Galan into production
• Funds will be used for further development of HMW, corporate overheads and working capital

In addition, the Company is pleased to announce a 1 for 4 non-renounceable entitlement offer to raise up to A$13.3 million at the same price as the Placement (the Placement and the Entitlement Offer together being the Offer).

Galan’s proposed offtake partner¹, Chengdu Chemphys Chemical Industry Co., Ltd (Chemphys) or designated affiliate, has agreed to subscribe for approximately A$4.5 million under the Placement. The investment by Chemphys is subject to completion of definitive offtake agreements.

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

“We are delighted with the support for the Placement and welcome a number of new investors to the register. In addition, on behalf of the Board of Directors, I would like to thank our shareholders for their ongoing support.

We also welcome the participation of Chemphys in the Placement which further strengthens the relationship between our companies.

The Board has adopted a lower capital intensity Phase 1 development to an initial 4,000 tpa LCE rate in light of market conditions. Funds raised from the Offer and the planned Chemphys prepayment provide the means to complete this development and keep our planned start to production in the second half of 2025.

Amid challenging market conditions Galan is moving forward with the development of HMW. We remain confident about the project economics underpinning the HMW development and the future of the lithium market.”

Placement

The Company has received firm commitments for a Placement of approximately A$12 million at A$0.105 per share.

Under the Placement, excluding Chemphys participation, the Company will issue 69,533,340 fully paid ordinary shares in the Company at A$0.105 per share (New Shares) (41,832,692 being issued under the Company’s ASX Listing Rule 7.1 capacity and 27,700,648 under its ASX Listing Rule 7.1A capacity).

New Shares under the Placement, excluding Chemphys participation, are expected to settle on 16 September 2024 and to be issued on or around 17 September 2024. Chemphys Placement participation is expected to settle within 10 business days after shareholder approval, as applicable, and completion of definitive offtake agreements. The Chemphys investment is subject to a sunset date of 31 December 2024, unless otherwise mutually agreed.

The issue price of A$0.105 per New Share represents a 8.7% discount to the last closing price of A$0.115 on 5 September 2024 and a 16.1% discount to the 5-day VWAP of A$0.125 as at the same date.

The Placement is not underwritten.

Entitlement Offer

The Company is pleased to announce a 1 for 4 non-renounceable entitlement offer at A$0.105 per New Share to raise up to approximately A$13.3 million. The record date for the Entitlement Offer is 13 September 2024.

Indicative Timetable

*These dates are indicative only. The Company reserves the right to vary the dates without notice. Note the Company and Chemphys have the right to mutually agree an extension to the Sunset Date for settlement.

Petra Capital Pty Limited acted as Sole Bookrunner and Joint Lead Manager and Barclay Wells Limited acted as Joint Lead Manager to the Offer. Alpine Capital acted as Co-Manager to the Offer. Terry Gardiner is a Director of Galan and is also an Executive Director of Barclay Wells Limited.

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