Galan Lithium has set a new record at its Hombre Muerto West (HMW) project in Argentina’s world-renowned “Lithium Triangle”, pumping 981 milligrams per litre of lithium brine at 15 litres per second during testing.
At the company’s newly-consolidated Catalina ground, the first diamond hole hit 300m of highly-fractured rock and flowed at 6l/s during airlift testing, with fluid density of about 1216 grams per cubic centimetre.
In a busy period for Galan at its flagship HMW project, it says the results have bolstered its confidence in its subsurface resource, as on-surface activities continue with the confirmation that the ground is suitable for the construction of the company’s first 205,000-square-metre solar evaporation pond.
Galan Lithium managing director Juan Pablo Vargas de la Vega said: “On the HMW Phase 1 construction front everything is moving along nicely with the main earthmoving contractor mobilising to site a week or so ago. HMW’s newly consolidated Catalina area has provided very encouraging exploration results as we look forward to drilling more holes, along with geophysics, to be included in a future resource update. HMW keeps on growing and giving great results. Our path to production is now tangible and real. We remain motivated become a new lithium miner and to start cashflow in H1 2025.”
The construction of solar evaporation pond one, a massive shallow pool in which the brines will be subjected to evaporation to increase their lithium concentration, is well underway after earthmoving equipment broke ground earlier this month. The company says testing of the ground returned density and compaction parameters within the expected range of results for pond construction.
The pond will feed the existing pilot plant with concentrated brine to produce a lithium chloride end product. Last month, Galan revealed testing from its HMW pilot plant had achieved the production of a 6 per cent lithium chloride concentrate product, equivalent to 13 per cent lithium oxide or 31.9 per cent lithium carbonate equivalent (LCE), with low levels of impurities. Management says the plant is expected to deliver its next batch of concentrate next month and it is progressing with discussions regarding third-party offtake agreements for the product.
Regarding its existing brine production wells, management says it has now completed the construction of all six phase-one wells in HWM and has flow tests on four.
The most recent test returned the highest production grades from any HWM well to date, with the 61 brine samples coming back at between 907mg/l and 1008mg/l lithium, averaging 981mg/l. The well maintained a solid flow rate of 15 litres per second over the 15-day test.
The company says it is on track to exceed its phase-one production demand of 91l/s, with all six wells expected to produce a total of 120l/s.
At Catalina, in the north-west of the project area, the first diamond hole reached rig capacity at 301m while still in fractured rock, which acts as the reservoir for the lithium brines. The company says the presence of fractured rock at Catalina may suggest the continuation of the main HMW brine resource north of its existing footprint and at depth, as the base of the fractured zone was not hit.
To assess the reservoir quality offered by the Catalina fractures, Galan completed a 72-hour airlift test on the hole and it returned concentrated brine with a density of about 1216 grams per cubic centimetre at a flow rate of 6l/s.
Management says the flow rates are extraordinary for that type of pumping method and reflect the highly-permeable condition of the fractured media, suggesting excellent conditions for future production yields.
On the commercial front, the company is concurrently maturing the HMW phase-two definitive feasibility study (DFS) that is expected to be delivered next month. The DFS will address the upscaling of production rates to a full 20,000 tonnes of LCE per year for a 40-year mine life from 2026.
The phase-one DFS focused on the production of about 5400 tonnes of LCE per year for 40 years and is governed by current production permits. It delivered a post-tax net present value of $696 million, representing an internal rate of return of 36 per cent, with an average annual free cash flow of $81 million.
It estimated phase-one capital expenditure at $158.8 million before contingency, with an operating expenditure of $6053.2 million per tonne of LCE, placing HMW in the lower half of the lithium cost curve globally.
The company’s projected sales price for the 40-year period is about $30,993 per tonne of LCE, leaving what would appear to be a healthy operating margin that should be enhanced further by a phase-two expansion, subject to confirmation via the DFS.
The 5954-hectare HMW project sits on the west coast of the Hombre Muerto salt flat and comprises seven concessions – Pata Pila, Rana de Sal, Deceo III, Del Condor, Pucara, Santa Barbara and the recently-consolidated Catalina tenements.
Galan has previously said it believes the Catalina tenements alone could add an exploration upside of between 500,000 and 1.5 million tonnes of LCE at between 953 and 988mg/l to the project.
Now, with a hole confirming good reservoir quality and with plenty of fractures providing porosity and permeability, HMW may soon be ready to push the company into the limelight of global lithium brine production.
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By Andrew Duffy
