Galan Lithium has secured 100 per cent ownership of the Candelas lithium brine project in Argentina, only 40kms from its developing Hombre Muerto West, or “HMW” lithium brine project where a 40-year mine life has already been predicted.
The company has completed the payment for the final instalment of a options agreement.
Galan is set to return to Candelas where a preliminary economic assessment completed in late 2021 tabled a stunning set of numbers that shows the project will make $270m a year for 25 years for a net present value of $1.76b.
A preliminary economic assessment study is similar in nature to an Australian JORC Scoping Study.
The company believes its cursory assessment at its Candelas project suggests it could churn out 14,000 tonnes of battery grade lithium carbonate equivalent, or “LCE” per annum during the contemplated 25-year initial mine life.
A payback period of only four years has been estimated for a capital outlay of $575m.
Average annual operating costs have clocked in at US$4,277 per tonne of LCE in the study which positions Galan at the low end of the cost curve within the burgeoning lithium industry.
The 2021 economic evaluation pegged a long-term average selling price at US$18,594 per tonne of LCE.
An internal rate of return of 27.9 per cent and a USD pre-tax net present value of US$1.225b are predicted in the study.
Incredibly, the market prices for battery-grade lithium carbonate are currently averaging around US$67,000 per tonne. Of course, whether prices will deflate over the long term is still hotly debated as analysts try to juggle forecasts over the future supply and demand of the battery metal.
Galan has also secured the valuable green tick of approval, after it was found its water was suitable for reverse osmosis treatment and is readily available at the project which removes the need to tap into the nearby Los Patos river.
The company has etched out an indicated resource of 685,000 tonnes of contained LCE grading at 672 mg/L from only eight drill holes that have perforated a 15km long and 4km wide structurally controlled basin that extends over the length of the project.
Nearby, its resource at HMW tips the scales at 5.8 million tonnes of contained LCE grading 866 mg/L.
Galan is also busy putting the finishing touches on a definitive feasibility study – or “DFS” at its HMW project with a preliminary economic assessment estimating 20,000 tonnes of annual battery grade LCE production over the 40-year mine life.
As it stands, HMW and Candelas could be in line to produce a combined 34,000 tonnes of LCE each year.
Galan Lithium Managing Director, Juan Pablo Vargas de la Vega said: “The Candelas Project was our first project foray into Argentina and we now have final full ownership of the project. Over the journey, our focus has understandably been on Hombre Muerto West but once we complete the DFS and associated works and infrastructure projects we will move forward on Candelas.”
The two projects lie in the Hombre Muerto salt flat or “salar”, located in the world renowned ‘Lithium Triangle’ of South America.
Incredibly, more than 50 per cent of the world’s identified lithium resources are contained within the Lithium Triangle that stretches across northern Argentina, into Chile and across to southern Bolivia.
Both Candelas and HMW lie within a stones-throw of other major lithium brine projects in the region, including New York-listed Livent Corporation’s Fenix project which has been in production for more than 27 years.
With the results of a DFS at the company’s flagship HMW lithium brine project due out any day and ownership of a second project stitched up in a cut-and-dry transaction, Galan appears to be well on its way to becoming the next major player in the hottest lithium region in the world.
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By Matt Birney
