ASX-listed Galan Lithium has hit the go-button on a scoping study into the potential development of its Candelas lithium brine project in the Catamarca, Argentina, sector of South America’s “lithium triangle”. Candelas lies south-east of and in the same fertile salt flat terrane as the Perth-based company’s flagship Hombre Muerto West brine project, which was the subject of an impressive scoping study published late last year.
Galan says the study on Candelas, described as a 15km-by-3-5km valley-filled channel, is expected to be completed during the December quarter this year.
The project area takes in an existing lithium brine resource estimated to contain about 685,000 tonnes of lithium carbonate-equivalent.
Management points to a significant reservoir of technical and financial data it has built up in the wake of detailed studies and testing at Hombre Muerto West that provides the impetus to press ahead with the Candelas scoping study phase.
Galan Lithium Managing Director Juan Pablo Vargas de la Vega said: “This … is a natural step to complement our lithium inventory from the same salt flat with an aim to adding further value by investigating an increase in production levels for Galan.”
“We are very pleased with Candelas’ modelling results for its lithium chloride concentrate … showing that it can reach up to 6 per cent lithium with a low impurity setting, which can provide commercial flexibility to production.”
Galan’s preliminary economic assessment or “PEA” on its nearby Hombre Muerto West lithium brine project tabled in December 2020 featured some compelling economic projections.
They included an EBITDA that was tipped to average US$174 million a year across a whopping projected mine life of 40 years.
Internationally recognised commodity research outfit Roskill’s average real long-term lithium carbonate-equivalent price prediction for between 2020 and 2040 of US$11,687 per tonne was used in the PEA.
The spine-tingling financial extrapolation in the PEA was predicated on annual production from Hombre Muerto West averaging 20,000 tonnes of battery-grade lithium carbonate-equivalent per annum.
Operating cash costs of lithium carbonate production came in at an average US$3,518/t, which Galan says places Hombre Muerto West in the lowest quartile of the global lithium cost curve.
The pre-production capital cost of developing Hombre Muerto West was forecast at US$438.9 million and the project’s capital payback period was put at 4.3 years.
A net present value topping the US$1 billion mark before tax was bestowed on the “world-class” asset by the PEA.
According to the $235 million market-cap Galan, the PEA took into account about 60 per cent of the current total indicated mineral resource estimate for Hombre Muerto West, of 2.26 million tonnes of lithium carbonate-equivalent, from brine going at an average 946 milligrams per litre lithium.
The company suggests this leaves plenty of flexibility to increase future lithium carbonate production rates up to 25,000tpa and says it believes the key parameters for the proposed Hombre Muerto West development can be finessed and further optimised.
Galan has been plugging away carrying out preparation testwork for a subsequent feasibility study.
The Hombre Muerto West project area, perched to the west and south of the Salar del Hombre Muerto, occupies the Hombre Muerto basin, one of the most globally prolific salt flats in the Argentinean Puna plateau of the Andes mountains at an elevation of about 4,000m above sea level.
Both Candelas and Hombre Muerto West project also sit within cooee of other major lithium projects, owned by Galaxy Resources, Posco and Livent.
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By Matt Birney
