Galan Lithium Limited (ASX: GLN) has obtained robust results from an updated Preliminary Economic Assessment (PEA) study for its 100% owned flagship Hombre Muerto West (HWM) in Catamarca Province, Argentina.
The new stronger, compelling economic results for HMW project include an unleveraged Pre-tax NPV of US$2,193m (8% discount rate), IRR of 37.5% and less than three year payback period and a pre-tax NPV8 up 120% from US$1.0b to US$2.2b and Average life-of-mine annual EBITDA of US$287m (from US$174m)
The original PEA, released in December 2020, was based on an average Li price of US$11,687/t to the year 2040. The updated HMW economic study uses the same conservative Li price of US$18,594/t as used in the study for Galan’s second project.
The updated economic study retains the original production profile of 20,000 tonnes per annum of battery grade lithium and no changes or improvements were made to Capex/ Opex estimations used in the original PEA study. The updated economic study results also reflect recent changes to the tax legislation in Argentina.
The preparation of the Project’s original PEA disclosed in December 2020 was carried out by several well-regarded consultants. The mineral resource estimate was prepared by SRK, the lithium recovery method was designed by Ad-Infinitum, while Worley Chile reviewed the potential recovery method, the project’s potential layout and infrastructure, capital and operating cost estimates and preliminary economic evaluation.
The other sections of the original PEA were managed by employees of Galan Lithium Limited. The updated economic study results were managed by Ad-Infinitum and employees of Galan.
Since the release of the original HMW PEA Study in December 2020, Galan has confirmed laboratory lithium chloride concentrations of 6% Li several times and confirmed production of lithium carbonate battery grade of 99.88% LCE from its concentrate.
It has also received permits for new drilling and Stage 1 construction permits for the HMW camp and pilot plant.
Galan’s Managing Director Juan Pablo (JP) Vargas de la Vega said uring 2022, the company will be undertaking a definitive feasibility level study (DFS) with the appointment of an independent, well credentialed engineering firm imminent.
Galan also expects the new HMW drilling to increase its Indicated Resources as well as a likely move into the Measured and Indicated Mineral Resource category. A key part of the DFS will be the formulation of a more robust hydrogeological model that supports the base case production level at HMW and potentially increases the production profile beyond 20ktpa along with a Reserve statement.
“These updated project economics for Hombre Muerto West just shows how very strong and healthy our flagship project is. Despite using a conservative long-term price assumption, HMW has delivered a phenomenal pre-tax NPV of nearly US$2.2 billion,” JP) Vargas de la Vega said.
“The company is in an enviable space whereby it has two study level projects that can potentially deliver combined long term production levels of 34ktpa LCE along with NPV’s that are above US3.4 billion. As we have previously said, Galan remains excited about the potential value add for our shareholders once we enter the lithium market with prices expected to be +US25k/t LCE.
“Our projects would now be among the lowest cost of any future producers in the lithium industry, due to their high grade and low impurity setting, green credentials and a low carbon footprint. Galan is excited to be a part of the solution to the global decarbonisation story.”
For further information please visit: https://galanlithium.com.au/
