Wheres can this UPI article be found that everyone keeps referring to??
The Drudge report times out.
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Announcement from ERM has made my day. :)
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Moin Moin
I actually wanted to wait and see how expensive the deal would actually be for the shareholders before writing another comment. Then dry my tears, collect my thoughts and write a post.Most important milestone:
As a result, however, Galan will no longer be perceived asa developer on the verge of bankruptcy, but as a low-cost near-term producer.The first saleable product can be expected in around 12-15 months. This is lithium chloride. A product that has so far only played a subordinate role in the lithium world dominated by spodumene, carbonate and hydroxide. There is certainly a certain amount of scepticism on the market as to whether this product is being used to produce lithium that is not needed. However, the interest and behaviour of significant market players such as Ganfeng, Chemphys and now Zhejiang Huayou Cobalt Co also, shows where the battery segment is heading. Ganfeng will approximately double the global amount of lithium chloride produced to date with its Mariana project. Ganfeng has so far invested around US$ 800 million in this 20,000 tpa project. The level of investment should be more than enough proof that Ganfeng's lithium chloride route is seen as promising. I recently posted a report here on Ganfeng's new lithium metal foil production process. Unfortunately, I can't remember exactly when.
In addition, Arcadium had taken over " Li-Metal Corp. "shortly before the takeover by Rio. Our neighbouring project ‘Fenix’ has also been producing lithium chloride for years. There is obviously also future potential for lithium metal here and Rio has now decided to expand production capacity in Hombre Muerto "Fenix". No wonder, given the resource. Hopefully they get their fresh water consumption issue under control.
Rio favours a DLE technology for its Rincon project. I have already pointed out several times that RIO has not opted for Arcadium's "Iliad technology". In my opinion, one of the reasons is the significant fresh water consumption of this technology. For Rincon, they prefer a new (unproven) "DLE-R technology" from Electralith. For those interested, just search Mandrake (there was something about GLN?
) and Electralith.In any case, lithium chloride is the next hot material for next generation battery materials. Keyword: One Step Production
This realisation also needs to mature on the market.
@ChasingProfits You argue that ‘greenbushes’ make little or no money at current prices.Seriously? I agree with the criticism of basing valuation solely on EBITDA. Nevertheless, I have looked at the transcript of the Q2 2025 earnings call. The following two quotes should show that Greenbushes is operationally profitable:- ...Costs, $300 a ton, so we're sort of in line there, which is great to see... (note: 300 AUD)
- ...The margin is fantastic. Despite this being a weak point in the cycle for lithium, 68% pretty impressive EBITDA and just shows you how unparalleled this asset is. It's an amazing ore body and lots more potential that we're working through on that...
If you don't want to rely on Galan's DFS 1 and DFS 2 then that's smart and recommended. I have also shared my differing assumptions on this more often and have come to a positive conclusion. Galan's project economics, or ‘Hombre Muerto’ for that matter, stand up to any comparison. Incidentally, much cleverer and more experienced experts than myself have also realised this. I have also posted various charts from different experts here. The Hombre Muerto projects are in the first quartile and on the far left. The foundation of these assumptions/data results from the knowledge of the chemical composition of the brine.
If I have understood you correctly, you are assuming that project size, optimal capacity utilisation, years of expertise and cost optimisation attempts, among other things through scaling, will lead to corporate success and are therefore assuming that Galan cannot achieve this? My answer to this is resource quality. ‘Small but mighty’ is often not such a bad way to hold your own in the market. What are your assumptions for HMW from Galan regarding C1 and AISC?You certainly know that project economics are significantly influenced by the use of separating agents. Consumption in turn depends on the degree of impurity. Two components are particularly important here: magnesium and sulphuric acid. Simple equation: the higher the content, the higher the prossessing costs - OPEX- and vice versa. Incidentally, the brine from SQM and ALB in the Atacama has a higher magnesium content. I am keeping a very close eye on what is crystallising in terms of project economics in Eramet's "Centenario Ratones" project.
For me, it is very likely that Galan will produce into a phase of higher or rising prices.Even my ‘friends’ at Goldman Sachs recently predicted a 28% higher market price for 2026. Not a bad outlook.
Sales speculation:I am surprised by the often limited view of a possible sale according to the motto "All or nothing" . What about a partial sale of Candelas? But I am happy to assume a complete sale of the 9.5 Mt LCE resource.For Lithium Chile, a multiple of approx. 55 US$/t LCE was offered in December. That would correspond to a price of US$ 522 million for the Galan resources.I know that some people here are gasping at the value. If the financing for production is successful, there is no reason for me to deviate downwards from the valuation multiple. On the contrary, see :Post #: 78544722
Finally, a brief outlook:- Short but severe pain soon due to CR (hopefully for the last time)
- RIGI approval shortly (was the lack of financing the brake?)
- Publication of the overall environmental impact study for the Hombre Muerto Salar (important for Candelas)
- Announcement of the construction of the LiCL-converter plant (estimated US$ 35 million investment?)
- Among other things, the price of steel has fallen considerably since DFS 1. Perhaps our neighbour POSCO can submit an offer that undercuts current Chinese prices? Due to the USA/CHN export restrictions, I would even wait with the order. Estimated construction time approx. 6-8 months
- Various Argentinian suppliers are looking for completion of several lithium projects Mariana, Centenario Ratones, Sal de Oro, Cauchari-Olaroz, because they have fallen into an order gap.This will not make orders more expensive.
- Announcement on further pond construction (here it will be interesting to see how many ponds are planned and with what capacity) Modular construction possible.
- Extension of building permission for HMW
- Possible sale of Candelas 1.6Mt LCE (assuming positive environmental impact study and court decision)
- Possible JV for Candelas (check whether Electralith DLE-R Tecologie or other DLE technologies are suitable)
- Possible JV(s) für Phase(s) 12.000 tpa, 20.000 tpa, 30.000 tpa, ...the cost savings through RIGI amount to approx. 10% of the original total project costs
By minimising risk in the financing, bankruptcy is almost impossible. Galan has no debts. The hope of prospective buyers to get a bargain on one of the few world-class resources due to a financial constraint will be dashed with a definitive offtake agreement andcapital raise.
Have a good start to the week
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