Galan Secures Agreement with Glencore for Offtake & Financing Prepayment Facility for the Hombre Muerto West (HMW) Lithium Project

The Board of Galan Lithium Limited (Galan or the Company) is very pleased to announce that it has signed a binding term sheet with a wholly owned subsidiary of Glencore plc (Glencore) global mining and trading company, for offtake for up to 100% of its premium lithium chloride concentrate from HMW (Marketing Offtake Agreement or MOA) and the offer to provide or facilitate a secured Financing Prepayment Facility (Facility) for US$70 to US$100 million, subject to conditions precedent being met.

Binding offtake secured from Glencore, one of the world’s largest global diversified natural resource companies, for lithium chloride and/or lithium carbonate from Phase 1 production (see DFS ASX release 3 July 2023) at HMW
Glencore offers to provide or facilitate a Financing Prepayment Facility for US$70 to US$100 million, subject to conditions precedentOfftake with Glencore does not require an export licenceThe agreement endorses Galan’s low-cost low-risk lithium chloride development strategy to become the next lithium producer in ArgentinaDiscussions for the larger Phase 2 (see DFS ASX release 3 October 2023) HMW development are open and well advancedAs previously announced Galan has commenced construction of Phase 1 HMW in September 2023 and remains on track for first pond fill in Q1-2024Commencement of production remains forecast for H1 2025


Glencore will purchase technical grade lithium chloride product from Galan’s high-grade, low- impurity HMW Project in Catamarca Province, Argentina. The offtake commitment does not require Galan to have secured an export licence for its lithium chloride. Glencore will accept offtake for Galan’s lithium chloride to be toll treated into lithium carbonate for sale and export from Argentina.

The binding agreement is for a five (5) year period from commencement of commercial production for 100% of Galan’s Phase 1 production estimated at 5.4kt lithium carbonate equivalent (LCE) in lithium chloride concentrate per annum. The price payable by Glencore will be referenced to a mutually agreed lithium carbonate price index over a quotational period less a marketing fee, discount and penalties (if any).

The agreement is renewable subject to mutual agreement between Galan and Glencore.


Galan is also delighted to have secured an offer from Glencore to provide or facilitate a binding proposal for the Facility to support funding of Phase 1, which is subject to certain conditions precedent being met including, amongst others, satisfactory due diligence to Glencore’s absolute discretion and draw down under the Facility will only become effective when the MOA and all transaction definitive documentation has been signed subject to Glencore’s satisfaction in its absolute discretion.

Galan believes that the execution of the binding term sheet for the MOA and Facility is a validation of the exceptional quality of the HMW Project and a strong endorsement of the experienced personnel with the requisite niche expertise which Galan has secured to successfully construct and deliver a lithium brine project in Argentina. Moreover, to underscore such confidence in the growth and future of Galan and its HMW Project, Galan and Glencore have agreed that Glencore will have first right to negotiate in respect of marketing and/or financing with regards to the future expansion of the HMW Project for Phase 2.

In parallel and whilst Galan is developing Phase 1 for maiden production at HMW in 1H 2025, the Company is also advancing discussions for the development of Phase 2 at HMW.

Galan’s Managing Director, Juan Pablo (JP) Vargas de la Vega, said:

“We are very delighted to announce Galan’s achievement of this very significant milestone on the path towards commencing commercial production at HMW in H1 2025. The agreement with Glencore is a validation of the quality our world class project and endorses the calibre and experience of Galan’s team. Our agreement with Glencore significantly de-risks our project and we are very well poised to secure finance for Phase 1 of the HMW Project. Importantly, Glencore’s funding assistance via the prepayment facility endorses our lithium chloride concentration strategy to deliver the HMW project, and provide returns to shareholders, in a shorter time frame.

We are today closer to becoming a significant and reliable producer of lithium, and thereafter growing our production in line with the expected rise in demand. Our momentum towards maiden commercial production continually strengthens and we look forward to updating investors on our progress.

We thank and acknowledge the work of our dedicated Board and personnel to reach this critical milestone. As always, we are grateful to our community and government in Argentina for their invaluable support of our development at HMW.”

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