Galan Lithium is pulling out all stops to get a DFS tabled for its massive Hombre Muerto West, or “HMW”, lithium brine project in Argentina by the end of the year. The company expects to update its resource by quarter three this year after discovering potentially new mineral resource zones courtesy of a transient electromagnetic geophysical survey. The project already boasts a pre-tax US$2.2b net present value and a seriously impressive set of pre-DFS numbers.
The company says a pilot plant is under construction and the first evaporation pond to be known as “S1” is now complete and ready to accept brine. Two boreholes have completed brine pumping tests with another to commence soon.
Galan is looking to produce 20,000 tonnes of lithium carbonate over a ridiculously large forty-year mine life. Capital costs are forecast to be US$439 million and the company says it should be able to pay that number down in less than three years. Annual earnings before interest, tax, depreciation and amortisation, or EBITDA, is anticipated to be US$287 million albeit the DFS will be the final arbiter of the numbers and will no doubt be highly anticipated by the market given the significant pre-DFS predictions.
HMW has a high-grade resource of approximately 2.3 million tonnes LCE at 946 mg/l lithium as part of its total resource in Argentina of approximately 3 million tonnes LCE @ 858 mg/l lithium.
Construction of the pilot plant at HMW is well underway with brine filling of the evaporation pond S1 about to commence followed by evaporation testing. Data from an initial evaporation trial is to be used to calibrate the model predicting completion time for producing 6 per cent lithium brine concentrate.
Galan has expanded the camp at HMW and it has been operational since mid-January.
HMW is a salar lithium brine deposit. Periodically flooded dry lakes are called salars and they become enriched in minerals through evaporation forming a brine. Until recently lithium brine formed the bulk of global production.
Diamond drilling is in progress to test the potential for extensions of the mineral resource beyond the limits of the salar.
The transient electromagnetic geophysical survey was able to detect a potentially significant brine deposit beneath a recent lava flow. The results are thought by the company “to complement the interpretation of brine units previously recognised as well as the conceptual hydrogeological model.” Lateral continuity of the brine at HMW is now better supported according to Galan.
The company is getting to the pointy end of a definitive feasibility study and pilot plant testing at its large high-grade salar lithium deposit at HMW in Argentina. Early economic studies show robust economics at a long-term average lithium price assumption of US$18,594 per tonne of battery grade LCE. The lithium market is forecast to remain strong and growing due to the electric vehicle battery market and it just might be that Galan’s timing is exquisite.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
