Court Suspends mining permits. Catamarca., page-7

This is potentially a very important development and I look forward to an announcement from Galan in the near future, as to the extent this affects their potential future development.

I understand that Galan has permits for Phase 1, so this should be unaffected, funding to completion aside. However, as stated in the half yearly report, the environmental assessment documentation for Phase 2 is currently with the Catamarca Government. This is the issue. The Catamarca Court ruling says that no new permits can be issued until a comprehensive environmental impact study is completed. As I read it, this affects all of HM Salar. The effect could be to mire Phase 2, potentially for years, until both the resulting environmental impact study is completed, any required changes are made and the Catamarca Court reviews the findings and reverses the ban on permits. None of these things are guaranteed, even with the winds of change that Milei has been unleashing in Argentina.

As to the case, while the original action, brought in 2021, was primarily against Livent and Galaxy (collectively now Arcadium), and concerns about their usage of water from the Los Patos River, the ruling seems to apply to all of the Hombre Muerto Salar and there seem to be references extending to Candelas (see quotes below).

How will potential offtake customer Glencore react to this news? Phase 1 offtake might be ok but surely their intent, and first refusal rights for Phase 2 are a big part of their involvement. Get low impurity material from GLN into the carbonate plants operating at less than capacity, reduce their operating costs, clip a few tickets along the way. It's potentially a lot less appealing if production is capped at 5.4kt from GLN Phase 1 and permiting for Phase 2+ is mired for potentially years. GLN have most of their money sunk into HMW and they need to complete Phase 1 to start earning. A limit on the project to Phase 1 only, at least for some considerable extra time, does not make it easier to get the rest of the money to complete the Phase 1 project. Regulatory issues scare investment.

GLN itself, may not be a project that's particularly concerning to the Court, or even those that filed the action in 2021, but I fear (with respect to Mondy) that GLN, never-the-less, is caught up in the aftermath of the thirsty work that's happened on Arcadium projects.

Another consideration here is that this ruling could have been worse. According to reports I've read, "the President of the Court rejected the request to suspend the permits and authorizations which were already granted." One of the judges ruled for suspension of the permits that have already been granted, though I'm not sure how politically motivated that ruling may have been.

GLN's HMW project has a lot of potential. Nice grades, low impurities, a really solid resource size, low operating costs and I think a good strategy in producing the LiCl solution from ponds. Managament has not done the project any favours by running the cash low, without funding the entirety of Phase 1, when something like this court ruling can come in from the side when it didn't initially reference GLN.

I see various comments largely dismissing this news. I'd like to be so positive. Maybe it's nothing but I don't think it's nothing. I can't post a sentiment at this time, until I see what GLN has to say. Before today, held.

Some quotes:
"Therefore, on the one hand, it is appropriate to reject the request in respect of suspending the effects of permits and authorizations granted in relation to the projects being developed."

"The vote also noted that there are 6 mining projects for the extraction of lithium, located in the Sanenca del Río de Los Patos - Antofagasta de la Sierra: Phoenix, Sal de Vida, Sal de Oro, Virgen del Valle Litio, Candelas, Candelas Oeste."

"Judge Cáceres said that the effects of permits and authorizations granted should be temporarily suspended, until the environmental impact that all projects can generate in the area are properly completed and evaluated - seeking a reasonable balance between economic development with the protection of the environment, ensuring that human activities do not cause irreversible damage to the environment."