Highlights:
- Phase 1 DFS delivers compelling economics from an initial 5.37ktpa LCE operation at HMW; targeting a high quality, 6% concentrated lithium chloride product (equivalent to 12.9% Li2O or 31.9% LCE) in H1, 2025.
- Phase 1 on its own delivers a post-tax NPV8% of US$460m, IRR of 36% and free cash flow of US$54m per year, facilitating Galan’s funding for further expansions.
- Capex before contingency of US$104m and opex of US$3,963/t of recoverable LCE contained in concentrated lithium chloride product; Phase 1 costing in the first half of world lithium cost curve.
- Approximate 2 year payback from commencement of production.
- Minimal fresh water and power required for lithium chloride production.
- Phase 1 provides an exceptional foundation for significant economic upside in the Phase 2 DFS (20ktpa LCE), due in September 2023; with Phase 2 production expected in 2026.
- Initial Phase 1 development permits granted; top-soil removal, camp expansion and other earthworks have commenced, allowing the project to maintain schedule for first production in H1 2025.
- Procurement of long lead construction items underway.
Galan Lithium Limited (ASX: GLN) (Galan or the Company) is very pleased to announce the results of its Phase 1 Definitive Feasibility (DFS) for its 100% owned Hombre Muerto West (HMW) Project in Catamarca Province, Argentina.
The HMW DFS Phase 1 delivers an annual production rate of 5,367 recoverable tonnes of lithium carbonate equivalent (LCE), contained in a concentrated lithium chloride product for a period of 40 years. The Phase 1 DFS results and analysis provided outstanding outcomes that demonstrated the HMW Project was a very competitive and highly compelling project in the lithium brine industry, with significant upside.
As previously announced, the DFS was separated into two phases. This initial Phase 1 of the DFS focuses on the production of a lithium chloride concentrate, as governed by the production permits. The DFS optimisation work continues and will culminate in the release of a Phase 2 DFS in September 2023, addressing full 20ktpa LCE production rate.
Galan’s Managing Director Juan Pablo (JP) Vargas de la Vega commented:
“We are delighted by the compelling economics produced from just the first phase of the HMW DFS. The re-evaluation of the DFS process and long-term production strategy will now deliver a high-quality lithium chloride product into the market which will provide Galan with strong early cash-flows. The numbers speak for themselves with an approximate 2-year payback and a project NPV that represents more than twice our current market cap. Thanks to our loyal project team for their tireless commitment to the Galan cause.”
Contact details:
Jane Morgan
jm@janemorganmanagement.com.au