Australia-listed Galan Lithium is advancing offtake and financing agreements for its Hombre Muerto West (HMW) lithium project with multiple industry players, Terry Gardiner, Galan’s non-executive director tells Kallanish.

“We’re negotiating offtakes for Phase 2 and we’re going to try and accelerate that,” he says in an interview in London.

The director notes there is a “long list” of companies Galan is talking to, but declined to give further details, adding that there could be an announcement soon. “We have got multiple options on the table right now. We had more options delivered to us today [Tuesday]. We are going to consider what is the best outcome,” Gardiner adds. 

The construction for Phase 1 of the project located in Argentina’s Catamarca Province is on track, with the first pond fill aimed for the end of February 2024. First production of 5,400 tonnes/year of lithium carbonate equivalent (LCE) is also on track for the first half of 2025. The definitive feasibility studies (DFS) for Phases 3 and 4 are planned together for the coming year, the top executive adds.

The company recently inked an offtake and financing deal with Glencore for Phase 1, with the Swiss mining giant offering a financing prepayment facility for $70-100 million. The agreement, Gardiner says, gives “validity” to the project. 

While Glencore is very eager for a Phase 2 offtake agreement, the director adds Galan is “holding off, because we want to negotiate with everyone to get the best outcome. They will have to match and better [any offer].”

The project has passed through almost all the de-risking stages, and Galan is now looking to raise additional funding. “This last interim funding is the last piece of the puzzle,” Gardiner adds, highlighting that investments are still flowing into lithium projects.   

“If it was just a simple equity raise, we could do that tomorrow; the money is there,” he explains. “For lithium projects, if you needed $300-400 million dollars, it’s there tomorrow. [For] lithium, at the moment, what we find in Western Australia, is that the money is there. That might not always be the case. Once we change from explorer to developer and then producer, then we just print money; we’re nearly there.”

The HMW project requires a capital expenditure of $118.4 million in Phase 1, with an additional $310.4m needed for Phase 2. 

“We are going to pick the best offer,” the director adds. “The offers are coming. We are on the big players’ radar. We may not be on the small players’ radar. We will be a known name soon.”

The company plans to raise the funding as early as pre-Christmas, Gardiner notes.

Galan’s next biggest project is the Greenbushes South project in Western Australia, south of the 100-year-old Greenbushes mine – the world’s largest hard-rock lithium mine, where the company will begin drilling in March. 

“We are exploring in Western Australia and if we strike success and discovery there, then we could raise a billion dollars – it’s so easy,” Gardiner says. “We’re next to the biggest, highest-grade mine in the world. If we have their extensions, then you’ll see us on the news in every country on the planet.”

The firm recently formed a joint venture with Redstone Resource to acquire three tenements in Canada, two next to Patriot Battery Metals’ Corvette project. 

The director’s optimistic outlook remains unwavering by the recent crash in lithium prices. “For us, we don’t mind. If we had this current price forever, and it’ll go up from here, it will stabilise, so we’re not worried about that. We are happy now because we are going to be in the lowest cost curve, we would have sunk our cost.”

He expects the lithium prices to rebound early next year, likely coinciding with the Chinese New Year in February.