Australia’s junior miner Galan Lithium Limited (ASX: GLN) has secured substantial capital to develop one of its flagship brine projects in Argentina’s Catamarca province.
The company said Wednesday that it had firm commitments totalling C$15.9 million from multiple investors. Galan aims to raise C$17.2 million altogether. It also will offer C$1.3 million to its shareholders via a non-underwritten share purchase plan.
This will allow shareholders to buy more stock directly from the company at a 14.8 per cent discount. Galan will issue about 13.8 million shares at C$0.40 a piece.
Funds will be put toward the first phase of construction at the Hombre Muerto West operation.
“We are very pleased with the outcome of the placement considering the tougher market conditions at the moment,” Managing Director Juan Pablo Vargas de la Vega said. “The strong support from both new and existing institutional investors is a clear endorsement of Galan’s timely path to low-cost, phase 1 production.”
Recent aerial shot of Hombre Muerto West. Photo credit: Galan Lithium
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Hombre Muerto West adjacent to Arcadium
The Catamarca brine project comprises 21 mining tenements. Operations run by the new lithium major Arcadium Lithium plc (NYSE: ALTM) (ASX: LTM) are situated directly to the east on the Hombre Muerto Salar.
The project, 100 per cent owned by Galan, will hold an estimated 6.6 million tonnes of lithium carbonate equivalent. Its indicated resources have an average grade of 904 milligrams per litre.
The company will establish a 200-man camp, an onsite laboratory, multiple ponds, a plant and six production wells at the site.
“Hombre Muerto West” translates to Dead Man West in English and it isn’t the only Argentina lithium brine project with that name. Above Catamarca in the neighbouring Salta province, Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) is currently developing its flagship Hombre Muerto North project.
Lithium South’s project is located north of Arcadium’s Fenix project. Both companies are surrounded by the majors’ Albemarle Corporation (NYSE: ALB), Sociedad Químicay Minera de Chile (SQM) (NYSE: SQM), POSCO Holdings (KRX: 005490) and Lithium Americas (Argentina) Corp. (TSX: LAAC) (NYSE: LAAC).
Map: Lithium South
Lithium exports to increase
A recent report from Argentina’s business firm Aleph Energy indicated that the country’s annual lithium exports would increase to about US$30 billion by 2040. The country raked in about US$700 million from its lithium resources in 2022.
Aleph predicted that the low price of lithium would start climbing back up in 2028. In just over one year the price of lithium carbonate has dropped by about 75 per cent.
Galan Lithium holds two of Argentina’s 62 lithium projects. In addition, the company expects its other operation in the country, Candelas, to have a 25-year lifespan.
Hombre Muerto West and Candelas are both located in the Puna geological province. The high-altitude region in northwestern Argentina’s Andes Mountains extends throughout the Catamarca, Salta and Jujuy provinces. It stretches into southern Bolivia and northern Chile as well.
Lithium South Development Corporation is a sponsor of Mugglehead news coverage
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