Galan Lithium Limited (ASX: GLN) has signed a binding term sheet with a wholly-owned subsidiary of Glencore plc global mining and trading company, for offtake for up to 100% of its premium lithium chloride concentrate from HMW and the offer to provide or facilitate a secured financing prepayment facility for US$70M to US$100M, subject to conditions precedent being met.
“The agreement with Glencore is a validation of the quality our world class project and endorses the calibre and experience of Galan’s team,” commented Galan managing director, JP Vargas de la Vega.
“Our agreement with Glencore significantly de-risks our project and we are very well poised to secure finance for Phase 1 of the HMW Project. Importantly, Glencore’s funding assistance via the prepayment facility endorses our lithium chloride concentration strategy to deliver the HMW project, and provide returns to shareholders, in a shorter time frame.”
Glencore will purchase technical grade lithium chloride product from Galan’s high-grade, low impurity HMW Project in Catamarca Province, Argentina. The offtake commitment does not require Galan to have secured an export licence for its lithium chloride. Glencore will accept offtake for Galan’s lithium chloride to be toll treated into lithium carbonate for sale and export from Argentina.
The company commenced construction of Phase 1 of the project in September 2023 and remains on track for the first pond fill in Q1-2024.
The binding agreement is for a five-year period from commencement of commercial production for an estimated 5.4Ktpa lithium carbonate equivalent (LCE) in lithium chloride concentrate. The price payable by Glencore will be referenced to a mutually agreed lithium carbonate price index over a quotational period less a marketing fee, discount, and penalties (if any). The agreement is renewable subject to mutual agreement between Galan and Glencore.
For further information, please visit: www.galanlithium.com.au
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