PERTH (miningweekly.com) – ASX-listed Galan Lithium has struck a deal with fellow listed Lithium Australia to acquire the remaining 20% interest in the Greenbushes South lithium project, in Western Australia.

Under the terms of the agreement, Galan will pay A$2-million in cash and will issue shares to the value of A$1-million to Lithium Australia, with the number of shares to be issued calculated based on the volume weighted average share price of Galan shares traded on the five days proceeding the date of completion.

On completion of the transaction, the existing joint venture over the Greenbushes South project will terminate.

Lithium Australia will maintain the first right to negotiate an offtake agreement with Galan over 20% of the lithium produced at the tenements.

“We are delighted to acquire full ownership of this highly prospective project in one of the world’s most renowned lithium districts. We have the necessary personnel in place to undertake the pending exploration programmes and workload at Greenbushes South and are extremely excited with what is to come there. Galan is in total control of its destiny with full ownership of its lithium projects in Argentina and Australia,” said Galan MD JP Vargas de la Vega.

Lithium Australia CEO Stuart Tarrant said on Tuesday that the company’s primary focus was on the growth of its battery recycling division and on commercialisation of its lithium ferro phosphate (LFP) cathode powders.

“A key risk for LFP production is the availability of lithium chemicals, which have the potential to become scarce as demand increases for electric vehicles in the future. Importantly, this agreement provides the company with rights for lithium chemicals from the Greenbushes South lithium project, defined under the original acquisition and joint venture agreement.

“Converting the prior investment into listed equity ensures that any upside generated by Galan for the Greenbushes South lithium project can be more readily realised should there be an opportunity to advance a core project of the company,” said Tarrant.

The Greenbushes South project is located 3 km from the Greenbushes lithium mine, which is one of the world’s largest, highest grade hard rock spodumene deposits.