Galan Lithium says its newly-acquired Catalina tenement in Argentina’s “Lithium Triangle” could add between 500,000 and 1.5 million tonnes of lithium carbonate equivalent (LCE) at between 953 and 988 milligrams per litre lithium to its adjacent Hombre Muerto West project.
Management says a well-drilled 500m to the south of the Catalina tenement hit lithium grades in the target range and believes it may extend into its exclusively-owned ground. Galan acquired Catalina late last month as part of deal with private owners, circumventing a long-standing local government dispute over land ownership.
The company says its recent field work at Catalina suggests the area is part of a fractured rock domain extending from Hombre Muerto West in the south and management believes the lithium brines are stored within a secondary porosity caused by the fractures in the reservoir rock.
It plans to further its understanding of Catalina’s geology, in particular the reservoir porosity, by drilling three diamond drillholes for a total of about 1000m, competing air-lift tests, brine sampling and running a tool downhole to measure the total rock porosity.
Galan Lithium managing director Juan Pablo Vargas de la Vega said: “This important transaction comes at a pivotal time for consolidating and securing Galan’s tenure at Hombre Muerto West. Our geological and hydrogeological information has identified this new target area as an exciting opportunity to increase our actual resource footprint, providing exceptional conditions for both brine quality and productive yield. Existing exploration data on the Hombre Muerto West area, located on the southern limit of the consolidated area, provides an excellent foundation for Resource expansion at Hombre Muerto West.”
The company secured the exclusive ownership of its highly-prospective new ground by issuing 9.76 million shares to Catalina’s private owner, resulting in the consolidation of the land packages named Catalina, Rana de Sal II, Rana de Sal III, Pucara del Salar and Deceo I.
Galan says its deal circumvents the dispute between the adjacent Salta and Catamarca province governments, which control land either side of Catalina, relating to the tenement’s ownership. The dispute has remained unresolved for more than 100 years and management says it has no foreseeable resolution.
Catalina now forms part of the company’s giant Hombre Muerto West project that already covers about 5954 hectares and boasts an impressive total mineral resource of 6.6 million tonnes at 880mg/L lithium, of which 4.7 million tonnes at 873mg/L lithium is in the measured category.
Galan is moving ahead with plans to produce saleable lithium product and last month, at the Hombre Muerto West pilot plant, it achieved the delivery of a six per cent lithium chloride concentrate product, equivalent to 13 per cent lithium oxide or 31.9 per cent LCE.
The company’s phase one definitive feasibility study for Hombre Muerto West used an initial production rate of 5367 tonnes per annum of the pilot plant product for 40 years. 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 $81million per year.
Management says the phase-one study provides an exceptional foundation for significant economic upside in the phase-two definitive feasibility study, which will address a full production rate of 20,000 tonnes per annum LCE. The phase-two study is due next month with production expected in 2026.
With the initial phase one development permits granted, top-soil removal and camp expansion underway, the project seems to be on track for its scheduled initial production in the first half of 2025. Galan says it is planning on releasing a maiden mineral resource for Catalina in due course.
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By Andrew Duffy
