Galan completes DFS for Argentina lithium project
PERTH (miningweekly.com) – A definitive feasibility study (DFS) into Phase 1 of the Hombre Muerto West (HMW) lithium project, in Argentina, has estimated a capital cost of $104-million and an operating cost of $3 963/t.
ASX-listed Galan Lithium on Monday said that the DFS was based on a Phase 1 production rate of 5 367 t/y of lithium carbonate equivalent contained in a concentrated lithium chloride production, over 40 years.
The DFS estimated a post-tax net present value of $460-million, an internal rate of return of 36% and free cash flows of $54-million a year, facilitating Galan’s funding for further expansions.
“We are delighted by the compelling economics produced from just the first phase of the HMW DFS. The re-evaluation of the DFS process and long-term production strategy will now deliver a high-quality lithium chloride product into the market which will provide Galan with strong early cash flows,” said MD Juan Pablo Vargas de la Vega.
“The numbers speak for themselves with an approximate two-year payback and a project net present value that represents more than twice our current market cap.”
The DFS was separated into two phases, with the initial Phase 1 of the DFS focused 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 in September, addressing full 20 000 t/y lithium carbonate equivalent production rate.
Phase 2 production is targeted for 2026.
Galan told shareholders on Monday that initial Phase 1 development permits had been granted and top-soil removal, camp expansion and other earthworks have commenced, allowing the project to maintain schedule for first production in the first half of 2025.
Procurement for the long-lead construction items is already under way.
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