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Hombre Muerto West project, Argentina, Bolivia and Chile – update

Image of the Hombre Muerto project looking east

Photo by Galan Lithium

6th October 2023

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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Name of the Project
Hombre Muerto West (HMW) project.

Location
South American lithium triangle, which spans the borders of Argentina, Bolivia and Chile.

Project Owner/s
Galan Lithium.

Project Description
A definitive feasibility study (DFS) proposes that the project be separated into two phases.

Phase 1 focuses on the production of a lithium chloride concentrate as governed by the production permits. The DFS optimisation work continues and will culminate in the release of a Phase 2 DFS, addressing a full 20 000 t/y lithium carbonate equivalent production rate.

The Phase 1 DFS has delivered compelling economics from an initial 5 367 t/y lithium carbonate equivalent operation, targeting a high quality, 6% concentrated lithium chloride product (equivalent to 12.9% lithium oxide, or 31.9% lithium carbonate equivalent).

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Phase 1 delivers an after-tax net present value (NPV), at an 8% discount rate, of $460-million and an internal rate of return (IRR) of 36%, with a payback of two years from the start of construction.

Capital Expenditure
$104-million, before contingency.

Planned Start/End Date
Phase 1 is expected to enter production in the first half of 2025, and Phase 2 in 2026.

Latest Developments
The Phase 2 DFS on the HMW lithium project has delivered robust financial outcomes.

Galan earlier this year released the Phase 1 DFS.

The Phase 2 DFS has increased the overall yearly production rate of the project to 20 851 t/y lithium carbonate equivalent, contained in a concentrated lithium chloride product for 40 years. The results and analysis of the DFS have provided outstanding outcomes that confirm Galan’s belief that the HMW project is a tier-one project in the lithium brine industry.

The Phase 2 project is estimated at a capital cost of $278-million, in addition to the $104-million contemplated in the Phase 1 study, with the total Phase 1 and Phase 2 capital cost estimated at $382-million.

The Phase 2 study also estimates an after-tax NPV of $2-billion and an IRR of 43%, with a free cash flow of $236-million a year and a payback period for Phase 1 and Phase 2 of just under three years.

Galan is in advanced negotiations with offtake and funding partners for the Phase 1 project.

Phase 2 construction is expected to start in the second half of 2024 and will run until the first half of 2026, with first production from Phase 2 targeted for the second half of 2026.

Key Contracts, Suppliers and Consultants
Ad-Infinitum (feasibility study work and lithium recovery method); SRK Consulting (mineral resources and reserve estimates); AIA Engineering, Consulting Services International and EIC Engineering (pond designs and water contour channels); M3 Engineering and Technology Corporation (reviewing and documenting the recovery method and the civil material takeoff quantities for ponds and water contour channels, developing the engineering design of the reagents and filtering plant); M3 (project layout, infrastructure designs, capital cost and operating-cost estimates and economic evaluation); and Wood Mackenzie and iLiMarkets (price estimates of the lithium carbonate and lithium chloride concentrate).

Contact Details for Project Information
Galan Lithium, tel +61 8 9322 6283 or email admin@galanlithium.com.au.

Edited by Creamer Media Reporter

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