By 
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.
Filling of pond 2 has commenced, evaporation process is underwayPond 2 earthworks and liner installation progressing well (65% complete)Pond 3 earthworks construction work well under way (40% complete)Pond 1 evaporation continuing, containing approximately 500t LCE alreadyTen (10) production wells completed; only six are required for Phase 1The HMW production process uses very little fresh water and considerably less water than subsequent conversion to lithium carbonate or hydroxideWater was never intended to be sourced from the Los Patos River; water for the HMW Project will be sourced directly from in situ dedicated water wellsStrategic HMW lithium chloride production plan continues; phase 1 (permits granted) and phase 2 development plans are unaffected by the recent provincial court rulingLow 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 yearsPhase 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
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).
Galan and its lithium chloride strategy
The HMW Project is a tier one project that will produce a premium high grade lithium chloride (LiCl) concentrate of 6% Li, comparable to 13% Li2O or 32% Lithium Carbonate Equivalent (LCE) in H1 2025.
This LiCl product results in 85 times the concentration of contained Lithium compared to raw brines sourced from the Hombre Muerto Salar. Galan’s 6% LiCl concentrate contains more than twice the Li content of Spodumene concentrates exported from Australia.
Galan is confident on the viability of its LiCl production strategy. There is an established market precedent for the sale of liquid LiCl concentrate in the industry, including over 10 years of exports to China by SQM in Chile. Domestically, the potential addition of the premium HMW high grade, low impurity LiCl product is likely to improve the performance of any lithium carbonate plant in northern Argentina. It is expected that there will be up to 10 downstream processing plants operating in Argentina within the next 5 years.
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