Galan Lithium readies itself for Phase 1 lithium production at HMW with new capital injection
Galan Lithium (ASX: GLN) has once again gained strong market support for its Hombre Muerto West (HMW) lithium brine project in Argentina, with the company receiving firm commitments from institutional, sophisticated and professional investors to raise $14 million.
Managing director Juan Pablo Vargas de la Vega said the funds will provide working capital headroom and ongoing financial flexibility.
He also noted that Galan is finalising negotiations for alternative funding solutions, including debt and prepayment facilities, which will enable the completion of HMW Phase 1.
New investors
“We are delighted with the support for the placement and welcome a number of new investors to the register,” he said.
“In addition, on behalf of the board of directors, I would like to thank our shareholders for their ongoing support.”
“We look forward to putting investors’ funds to work.”
Deed agreement
Galan recently utilised a new at-the-market subscription deed (ATM) agreement with Acuity Capital to raise $2.25m.
The ATM – which Galan initially entered into in mid-April – provides the company with up to $15m of reserve equity capital until 31 January 2029.
Galan has full discretion as to whether or not to utilise the ATM, the maximum number of shares to be issued, the minimum issue price of shares and the timing of any subscription.
The company agreed to place 15,000,000 fully paid ordinary Galan shares at nil cash consideration to Acuity Capital as security for the ATM.
Upon early termination or maturity of the ATM, the company may buy back (and cancel) the shares placed as security for no cash consideration (subject to shareholder approval).
For the recent $2.25m raising, 7,950,000 Galan collateral shares previously issued to Acuity under the ATM were set off.
Those funds will also be utilised for further development at HMW.
Phase 1 on target
Galan is on target for first lithium chloride production from HMW Phase 1 in H1 2025, with a number of key activities recently completed or underway.
An initial definitive feasibility study (DFS) focused on the production of 5.4 thousand metric tonnes per annum lithium carbonate equivalent (LCE) of a lithium chloride concentrate by H1 2025.
The Phase 2 DFS identified a target of 21ktpa LCE in 2026, followed by Phase 3 production of 40ktpa by 2028 and finally a Phase 4 production target of 60ktpa by 2030.
Phase 4 will include lithium brine sourced from both HMW and the 100%-owned Candelas project.
In late April, the company achieved a major development breakthrough to support its rapidly developing mining activities, signing a commercial agreement with the local Catamarca government for the support of the grant of permits to enable the commercialisation of lithium chloride concentrate to be sold locally or exported internationally from HMW.
Galan will also continue to endeavour to place lithium chloride concentrate locally and is committed to pursuing further downstream processing routes after four years, in a location outside the Hombre Muerto salar.
The next step in the process is the formalisation and the passing into legislation.