Australian Lithium Developer Targets Argentina's 'Lithium Triangle'

• Galan Lithium is an Australian lithium company focused on the Hombre Muerto salt flat project in Argentina.
• They recently completed a resource estimate of 2.1 million tonnes LCE and are working on a scoping study.
• Major shareholder Gangfeng owns around 10% of the company.
• Galan raised A$1.6 million in June to fund the scoping study and initial project development.
• The company aims to complete a PFS in the next 18-24 months which they believe can be funded organically.

Perth-based Galan Lithium Limited (ASX: GLN) is advancing its flagship Hombre Muerto lithium brine project in Argentina's Catamarca province, the heart of South America's 'Lithium Triangle'. With major producers already operating in the region, Hombre Muerto is strategically positioned to capitalize on surging demand for lithium batteries.

In a recent interview, Galan Lithium CEO Juan Pablo Vargas de la Vega outlined plans to fast-track development of the project. He noted that Hombre Muerto lies next to projects held by major lithium producers Livent Corporation and POSCO, along with Australian miner Galaxy Resources.

"We are the newcomer here," said Vargas de la Vega. "This is an idea that we had three years ago to explore in a part that has non-conventional explored at the Hombre Muerto salt flat."

Since acquiring the project, Galan has delineated an initial mineral resource estimate of 2.1 million tonnes of lithium carbonate equivalent. Vargas de la Vega said he was pleased with the pace of progress to date.

"The company has gone a long way in a very short little time and we have a fantastic team that is pushing in the same direction," he remarked.

With lithium prices depressed, Vargas acknowledged it is currently difficult for juniors to attract investment. However, he expressed confidence in Hombre Muerto's fundamentals.

"Our thesis is about being a competitive option," he said. "We would have a competitive project that even if we are currently not a producer, these sort of environments will be the ones that are not complaining, not making money."

Major Shareholder Provides Backing

China's Ganfeng Lithium Co. Ltd owns around 10% of Galan. Vargas de la Vega said Ganfeng's continued shareholding provides validation, despite lackluster market conditions.

“The good thing is that we're still talking to them and while things have been cooling off in the lithium market, they haven't walked away, they haven't sold a single share," he noted. "That gives confidence from our end that we're doing the right thing."

Ganfeng participated in Galan's recent A$1.6 million capital raising, which will fund a scoping study and initial development work. Vargas de la Vega said the support of major shareholders like Ganfeng has been critical in securing funding amid challenging markets.

Scoping Study on Track

Galan has appointed an internationally reputable engineering firm to carry out the Hombre Muerto scoping study, although the company elected not to name the firm at this stage. Vargas de la Vega anticipates the study will be completed during the fourth quarter of this year. Following the scoping study, Galan plans to commence a pre-feasibility study.

"We just want to tell the market that we have something meaningful while we're not required to do a preliminary economic assessment (PEA)," said Vargas de la Vega, explaining the rationale for completing a scoping study ahead of a PEA.

The CEO believes Galan can self-fund all the way through to a full feasibility study over the next 18-24 months, which he estimates will cost around A$7 million.

Fast-Tracking Development

A key focus for Galan is identifying opportunities to accelerate commercial production. Vargas de la Vega highlighted test results indicating Hombre Muerto brines can be concentrated to very high levels.

"4.8% equates to 25.6% lithium carbonate equivalent. This is 4.8% lithium, so if you transform that into lithium oxide just to give a reference point, lithium oxide would be 10-10.5%," he said.

By comparison, most hard rock lithium projects in Western Australia target spodumene concentrates grading around 6% lithium oxide. Vargas de la Vega believes the exceptionally high grades at Hombre Muerto present an opportunity to produce a saleable lithium concentrate rather than more costly lithium carbonate.

"Commercially this could make a very big difference, because I could come online in two years instead of five," he said.

While still conceptual, fast-tracking production by selling lithium concentrates could dramatically improve Hombre Muerto's economics. Vargas de la Vega stressed that permits and logistics would still need to be worked out. Nonetheless, the CEO's commercial background leads him to constantly explore such innovative approaches.

"I try not to take technical answers as absolute answers – I push back," Vargas de la Vega stated. "I'm also saying, I have a limited budget and I need to stick to what makes sense commercially."

Hombre Muerto's fundamentals remain strong regardless of whether Galan pursues an accelerated development timeline. With an experienced leadership team and backing from key shareholders, the company is positioned to realize the potential of its strategic lithium brine project.

"If there's a way to put our product into the market quicker than anyone else because the chemistry of our salt flat allows those levels of concentration, I will do so."

Key reasons lithium could be a good investment:

• Global demand for lithium-ion batteries is surging, driven by electric vehicles and energy storage. This should support higher lithium prices.
• Supply growth has lagged demand growth in recent years. New projects are needed to rebalance the market.
• Argentina's Lithium Triangle is a prime location with low-cost brine deposits. Companies there could become major producers.
• Lithium brine projects can have lower operating costs than hard rock spodumene projects.
• High-quality projects in the hands of capable management teams have the best upside potential.