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HMW Project Achieves 1,000t LCE Contained Inventory as Lithium Chloride Production Journey on Track

April 29, 2024

Galan Lithium Limited (ASX:GLN) (Galan or the Company) is pleased to provide a further update on the progress of construction activities at its 100% owned Hombre Muerto West (HMW) Phase 1 lithium brine project, with lithium chloride production expected in H1 2025. Galan continues its steady progress in advancing its low cost, high grade HMW project to production in a timely manner.

HMW Project Update

Pond 1 and 2 evaporation continues; approx 1,000t LCE contained inventoryPond 3 earthworks almost complete, liner installation at 60% and filling of pond 3 commenced; Pond 4 earthworks have commencedOverall project completion now at 33%, with pond construction 45% complete; project execution is advancing as plannedAligning with the physical progress of the project, capital expenditure also sits at 33% of the Phase 1 budgetOpportunities to reduce the Capex and Opex for HMW Phase 1 identified; engineering and procurement teams working to quantify these opportunities within the next two monthsLow all-in sustaining costs; HMW is expected to be in the 1st quartile of lithium industry’s cost curve with an initial reserve estimate of 40 yearsPhase 2 Operating cost to LiCl concentrate of $US3,510/t LCE equates to a low Li2O equivalent operating cost of SC6 (Spodumene Concentrate) $US310/t-$US350/t; solid production margins at current spot prices

Overall completion of the HMW project now sits at 33% with the ponds system already at 45% completion. Approximately 600,000 m2 of evaporation area has now been built, currently housing 1,000t LCE contained inventory. This evaporation area is sufficient to produce a lithium chloride volume of approximately 2.4 ktpa LCE. The key processing parameters, including raw brine well average flow rates, Li grades and evaporation rates are all aligned with the Phase 1 DFS. Based on the rate of construction and the results achieved to date, the HMW project remains on track to start production in H1 2025.

In addition, Galan’s team are analysing options to reduce capital expenditure, these opportunities are focussed on selecting the minimum infrastructure required to commence production of Phase 1. Multiple trade-off exercises are being assessed such as the analysis of rental options for energy supply, reduction of the size for selected buildings, usage of independent smaller control systems, instead of a larger central control system for all facilities.

As previously announced, the HMW project was separated into four production phases. The initial Phase 1 Definitive Feasibility Study (DFS) focused on the production of 5.4ktpa LCE of a lithium chloride concentrate by H1 2025, as governed by the approved production permits. The Phase 2 DFS targets 21ktpa LCE of a lithium chloride concentrate in 2026, followed by Phase 3 production of 40ktpa LCE by 2028 and finally a Phase 4 production target of 60ktpa LCE by 2030. Phase 4 will include lithium brine sourced from both HMW and Galan’s other 100% owned project in Argentina, Candelas. The very positive Phase 2 DFS results were announced on 3 October 2023 (https://wcsecure.weblink.com.au/pdf/GLN/02720109.pdf).

Galan’s Managing Director, Juan Pablo (JP) Vargas de la Vega, commented:

“We are very proud of the solid progress being made by the HMW Phase 1 construction team. With more than one third of the project completion now achieved, Galan is well on its way towards its targeted commencement of production in H1 2025. Galan would like to acknowledge and sincerely thank the Government of the Catamarca Province in Argentina for their continued support, evidenced by the recent agreement signed to commercialise lithium chloride concentrate from HMW. We are excited about the opportunities this agreement now presents to Galan’s future”

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