Good progress by Galan of late with Pond 1 construction 85% compete (as of 21/12 announcement) and Pond 1 liner install imminent, as too is Pond 2 construction - both to commence before year end - in fact hot off the press as I write this, Galan just tweeted that Pond 2 has started construction - well done!! Pond 3 topsoil removal already well underway as well. I jumped on sentinel and got the latest satellite photo (26/12) and overlayed the pond design (see below). Looking good!
As a reminder to all, these Phase 1 ponds are to be used for the full field development, so not only is Phase 1 under construction, but essentially so is Phase 2+. This is huge and very deliberate benefit of the Phased development strategy, i.e. the full development schedule is completely de-risked by starting small and the construction of Phase 1 will just seamlessly roll into Phase 2 and then Phase3/4, saving costly demobilisation/mobilisation costs each time.
You find me a near-term Li producer (i.e. within 18mo) in construction that is valued so ridiculously low as Galan is -0 you wont! The value proposition here is astounding. Combine this with the fact Galan is traditional brine (i.e. low cost and low risk) with some of the highest grade and lowest impurities in all Argentina and we will definitely be one of the lowest cost producers in the entire industry - something the market is finally starting to wake up to as being critical in a commodity business where price cycles up and down. The "strategic reviews" announced by Core and Sayona highlight the struggles high cost producers will have and I guarantee there are many more higher cost projects conducting "strategic reviews" given Li prices. But even at very low proves, Galan's HMW margins will be huge and we will not only survive low price cycles but thrive through them! After 25+ years in oil & gas going through numerous oil price cycles, I can tell you 100% that LOW COST OF SUPPLY WILL ALWAYS WIN! Quality and scale are critical in supporting low cost of supply and Galan have this in spades at Hombre Muerto with a genuine massive Tier 1 resource.
My gosh we have 7.3MT @ 852mg/l total LCE (more than LTR, AZS, PMT on an LCE basis!) and within that we have HMW at 6.6 MT @ 880mg/l of which a massive 72% is already in the measured category (none of this inferred crap many are still reporting). Given focus on project construction and having more than enough resource already, Galan have not been focused on growing the resource base, however I remain absolutely convinced there is well over 10MT on our HM tenure (I've researched it and followed it for over 3 years!) - we know there is at least 1-2MT to add from the northern Catalina tenements already and the recent wells up there are outstanding, some of the highest grade and highest flowrates ever! Wouldn't surprise me to see Galan eventually hit 15MT at 800+ mg/l and that is world scale on any measure - and importantly all 100% OWNED!! Here is a stat for you all! A fellow large holder did some detailed Li recovery analysis and if Galan resource was hard rock, our HMW resource today is equivalent to ~200MT @ 1.25% LiO2! Let that soak in for a minute and then look at our market cap vs hard rock peers with may less resource. And on top of that our margins will be even higher than hard rock as we are traditional evaporation with high grade and low impurities!
Galan has to be the pick of all Li companies in the 2024 Li market recovery. As prices start to recover in H1 2024, investors and brokers will be looking to be a little smarter with were they reinvent and Galan just has to be one of the most preferred Li investments given its low cost, low risk (chloride not battery grade) and fast to production strategy - in construction and will be a producer within 18mo!
Do your research as I have done and you will all agree...Galan to be the standout performer in 2024!
GLN Price at posting:
64.5¢ Sentiment: Buy Disclosure: Held
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