Perth, Australia – 27 August 2024 | Galan Lithium Limited (ASX: GLN) ("Galan" or "the Company") is pleased to announce that it has entered into a Memorandum of Understanding (MOU) with Chengdu Chemphys Chemical Industry Co. Ltd ("Chemphys") for an offtake prepayment agreement related to the Company’s flagship Hombre Muerto West (HMW) Project in Argentina.
Highlights:
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Offtake Agreement: Upon execution of definitive agreements, Galan will supply Chemphys with a total of 23,000 tonnes of lithium carbonate equivalent (LCE), as lithium chloride, over the first five years of Phase 1 of the HMW Project.
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Prepayment Facility: Chemphys will provide Galan with a US$40 million offtake prepayment facility for support for the ongoing development of the HMW Project. The prepayment will be secured by a first-ranking security interest over the lithium inventory and the HMW Project itself.
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Delivery Timeline: Deliveries under the agreement are expected to run from the second half of 2025 through to 2030, commencing at Phase 1 of the HMW Project (second half of 2025).
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Pricing and Conditions: The pricing for the lithium chloride product will be linked to the market price for battery-grade lithium carbonate. The MOU is non-binding and also subject to the receipt of all necessary regulatory approvals. The MOU is also subject to the satisfactory completion of due diligence by Chemphys.
JP Vargas de la Vega, Managing Director of Galan Lithium, commented: “I am delighted with this outcome. The high grade, low impurity lithium chloride samples Galan has been producing from the HMW pilot plant have been very well received by lithium converters leading to this agreement with Chemphys. Chemphys is a leader in processing lithium products in China and is a trusted partner to some of the world's largest battery manufacturers. The offtake partnership and the financing prepayment will be foundational agreements for the HMW project and Galan. We look forward to the execution of the definitive agreements and further advancing the development of HMW in anticipation of first lithium chloride production in the second half of 2025.”
Alison Dai, Director at Chemphys, stated: “Chemphys is pleased to achieve this first milestone with Galan. Chemphys places great importance on the quality of the lithium supply and visibility of the supply chain. Galan is a great partner for Chemphys on these measures and we look forward to a strong relationship.”
Next Steps:
Galan will work towards finalising a definitive offtake and prepayment agreement with Chemphys, with a focus on securing all necessary regulatory approvals and completing the required due diligence the current MOU is subject to.
JP Vargas de la Vega
Managing Director
jp@galanlithium.com.au
+61 8 9214 2150
Terry Gardiner
Non-Executive Director
TGardiner@galanlithium.com.au
+61 (0) 400 900 377
Jane Morgan
Investor and Media Relations
info@janemorganmanagement.com.au
+61 (0) 405 555 618
About us:
About Galan Lithium Limited:
Galan Lithium Limited (ASX:GLN) is an ASX-listed lithium exploration and development business. Galan’s flagship assets comprise two world-class lithium brine projects, HMW and Candelas, located on the Hombre Muerto Salar in Argentina, within South America’s ‘lithium triangle’. Hombre Muerto is proven to host lithium brine deposition of the highest grade and lowest impurity levels within Argentina. It is home to the established El Fenix lithium operation (Arcadium Lithium, formerly Livent Corporation), Sal de Vida (Arcadium Lithium, formerly Allkem) and Sal de Oro (POSCO) lithium projects. Galan is also exploring at Greenbushes South in Western Australia, just south of the Tier 1 Greenbushes Lithium Mine.
Contact details:
Jane Morgan
Jane Morgan Management
Investor & Media Relations
jm@janemorganmanagement.com.au