【Ferro-alloys.com】:A definitive feasibility study (DFS) into Phase 1 of the Hombre Muerto West (HMW) lithium project, in Argentina, has estimated a capital cost of $104-million and an operating cost of $3 963/t.
ASX-listed Galan Lithium on Monday said that the DFS was based on a Phase 1 production rate of 5 367 t/y of lithium carbonate equivalent contained in a concentrated lithium chloride production, over 40 years.
The DFS estimated a post-tax net present value of $460-million, an internal rate of return of 36% and free cash flows of $54-million a year, facilitating Galan’s funding for further expansions.
“We are delighted by the compelling economics produced from just the first phase of the HMW DFS. The re-evaluation of the DFS process and long-term production strategy will now deliver a high-quality lithium chloride product into the market which will provide Galan with strong early cash-flows,” said MD Juan Pablo Vargas de la Vega.
“The numbers speak for themselves with an approximate two-year payback and a project net present value that represents more than twice our current market cap.”
The DFS was separated into two phases, with the initial Phase 1 of the DFS focused on the production of a lithium chloride concentrate, as governed by the production permits. The DFS optimisation work continues and will culminate in the release of a Phase 2 DFS in September, addressing full 20 000 t/y lithium carbonate equivalent production rate.
Phase 2 production is targeted for 2026.
Galan told shareholders on Monday that initial Phase 1 development permits granted; top-soil removal, camp expansion and other earthworks have commenced, allowing the project to maintain schedule for first production in the first half of 2025.
Procurement for the long-lead construction items is already under way.