Galan Lithium Secures $20M Placement at 21% Premium, RIGI Incentive for HMW Project

Strategic Funding Secured Amid Market Challenges

Galan Lithium Limited has taken a significant step forward in its development journey by securing a binding commitment for a $20 million equity placement from The Clean Elements Fund. This strategic investment, priced at a 21% premium to the previous share close, is earmarked to complete Phase 1 construction of the Hombre Muerto West (HMW) lithium project in Argentina. The placement will be executed in two tranches, with the first expected to settle shortly after the company’s general meeting in August 2025, and the second contingent on shareholder approval and due diligence by November 2025.

Managing Director Juan Pablo Vargas de la Vega highlighted the importance of this funding in the context of a challenging lithium market that is beginning to show signs of recovery. The partnership with Clean Elements, a specialist lithium investor with a successful track record, underscores Galan’s strategic approach to combining project quality with strong financial backing.

Government Incentives Boost Competitive Edge

In a parallel development, the Argentine Government’s Comite Evaluador de Proyectos RIGI has approved the Régimen de Incentivo para Grandes Inversiones (RIGI) for the HMW project. This incentive regime offers a suite of benefits including a reduced corporate income tax rate of 25%, fiscal stability for 30 years, preferential foreign exchange access, customs and tariff exemptions, and accelerated depreciation allowances. These measures are designed to enhance project financing, streamline construction, and support long-term operations.

Galan’s HMW project is only the sixth in Argentina to receive RIGI approval and the second in the mining sector, following Rio Tinto’s Rincon project. This endorsement not only strengthens HMW’s position as a future low-cost lithium producer but also signals governmental support for large-scale mining investments in the region.

Progress on Construction and Commercialisation

Construction activities at HMW remain on schedule, with the nano-filtration plant’s detailed engineering design completed and fabrication orders issued. Installation and commissioning are targeted for the second half of 2025, aligning with the broader Phase 1 construction timeline. The project aims to deliver 4,000 tonnes per annum of lithium carbonate equivalent (LCE) as a 6% lithium chloride concentrate over an initial 40-year mine life.

Complementing the equity placement, Galan has advanced its commercial relationship with Authium Limited, securing an offtake agreement for 45,000 tonnes of lithium chloride over six to twelve years, alongside access to a $6 million prepayment facility. Authium’s expertise in mineral commercialisation and innovative nano-filtration technology is expected to enhance the quality and purity of lithium chloride production.

Financial Position and Outlook

At the end of the June 2025 quarter, Galan reported cash and liquid assets of $4.4 million and no outstanding debt. The company has prudently managed its expenditure to preserve cash ahead of the placement settlements. With the funding in place and government incentives secured, Galan is well positioned to complete construction in the second half of 2025 and commence production in the first half of 2026.

The company’s focus remains firmly on delivering a high-purity lithium product suited for the growing electric vehicle battery market, particularly lithium iron phosphate (LFP) batteries. The staged development plan aims to scale production to 60,000 tonnes per annum LCE across four phases, balancing capital intensity with execution risk.