Galan Lithium will gain full control of the Greenbushes South lithium project on the edge of the world class Greenbushes Lithium Mine after shaking hands on a $3 million purchase of joint venture partner Lithium Australia’s 20 per cent stake.
The deal includes $2m in cash, issuing $1m worth of Galan shares and the granting of first right of refusal to Lithium Australia for offtake of up to 20 per cent of Galan’s share of lithium from the project to produce lithium ferro phosphate.
The joint venture will end once shares are issued based on the five-day volume-weighted average price of Galan preceding the completion date.
Galan Lithium Managing Director Juan Pablo Vargas de la Vega said:“We have the necessary personnel in place to undertake the pending exploration programmes and workload at Greenbushes South and are extremely excited with what is to come there.
“Galan is in total control of its destiny with full ownership of its lithium projects in Argentina and Australia.”
The deal comes nearly two years after Lithium Australia struck a joint venture deal to bring Galan into the project 250km south of Perth near Bridgetown in 2021.
Lithium Australia is turning its focus from exploration to battery recycling and commercialisation of cathode powders, for which the offtake agreement under its Galan JV exit deal is a key factor.
In order to execute an offtake deal under the agreement Lithium Australia will have to green light a commercial lithium metal phosphate cathode powders facility by December 31, 2029.
Lithium Australia Chief Financial Officer Stuart Tarrant said: “A key risk for LFP production is the availability of lithium chemicals, which have the potential to become scarce as demand increases for EVs in the future.”
“Converting the prior investment into listed equity ensures that any upside generated by Galan for the Greenbushes South lithium project can be more readily realised should there be an opportunity to advance a core project of the company.”
Proximity to Talison Lithium’s Greenbushes mine, the largest hard rock lithium mine in the world, has been a driving factor for Galan’s interest in Western Australia’s South West.
The 1.34mtpa Greenbushes mega mine has been churning out lithium since 1983 and is yet to show signs of slowing down, with Talison drafting up a third processing plant and tailings retreatment facility to further boost production.
In the September quarter alone Greenbushes produced a record 361.227 tonnes of spodumene concentrate.
Galan got tongues wagging in August when a 500m pegmatite outcrop associated with spodumene-bearing lithium was discovered on one of its tenements three kilometres south of Talison.
The explorer has since embarked on extensive mapping and sampling to pin drill targets at the pegging, in addition to other tenements further north.
The deal appears a win-win for the JV partners.
Galan can get on with the job of building a resource and Lithium Australia can turn its laser focus onto how best to use any product mined in the shadows of a world-class resource.
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