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REGIONAL ROUNDUP LATIN AMERICA

Galan unfazed by lithium malaise

f Galan Lithium Ltd managing director
IJuan Pablo Vargas de la Vega is con-
cerned about the lithium price, he certainly
isn’t showing it.
In fact, he can’t understand why peo-
ple have suddenly turned against lithium
stocks on the back of the recent dip in
prices.
“Everyone talks about the lithium market
being on the down, but I challenge that vi-
sion,” Vargas de la Vega told Paydirt.
“Six years ago the price was around
$US5,000/t and companies were mak-
ing money at those prices. Now the price
is close to $US10,000/t, operating prices
are similar and nothing has changed much
since then, so where is the problem?
“The whole thing is about perception.
The market perceives that lithium is on the
downer because the price went to twice
that, it went to almost $US20,000/t and
now they’re looking at $US10,000/t.
“I look at the big picture. It went from Juan pablo Vargas de la Vega
$US5,000/t to $US20,000/t, now it’s
$US10,000/t. Well, guess what? You’re re- work all of that data, reality can either over- Orocobre Ltd’s Olaroz project, are recent
ceiving more than twice the revenue you estimate or underestimate,” he said. additions to the Galan team. Both are set
were receiving five years ago if you are a “In our case we underestimated all of to play key roles in the evolution of the PFS
brine operator.” the parameters we were looking at and on Candelas.
Spodumene producers such as ASX- we now have a solid, high-grade resource “We now have people with experience
listed trio Pilbara Minerals Ltd, Altura Min- with low impurities. That is definitely some- who can bring a lot to the table of what
ing Ltd and Alita Resources Ltd (now in thing that you can work with and economi- hasn’t worked in the past so we don’t re-
administration) are among those hardest cally we could potentially be looking at a peat the same mistakes,” Vargas de la
hit by the apparent downturn in lithium. project for the next 20-plus years.” Vega said.
An oversupply of Australian-sourced Following the maiden resource estimate “Orocobre, in a lot of ways, was a good
spodumene into China has been sug- being unveiled, Galan reported encounter- school for a lot of people in Argentina.
gested as a major contributor to the recent ing several heavy brine-bearing aquifers in They were the pioneers in Argentina for
price drop. However, long-term forecasts the first two holes drilled into the compa- lithium, so there’s a lot of examples of how
for lithium demand are still very positive. ny’s Western Basin projects, both adjacent to operate and work. The other good thing
Brines producers, particularly from to Livent’s tenure. about them is they also paved the way in
South America, have quietly been outper- Interim grades of more than 1,000 mg/L industry for services, so some of the is-
forming their spodumene peers this year, lithium were returned from some samples sues they faced we’re not going to face
which has come as no surprise to Vargas and are the highest Galan has reported to because there is an industry that is more
de la Vega given Chile’s Atacama region date. mature than what it was six years ago.”
and Hombre Muerto in Argentina are rec- Galan has now launched into initial PFS It has now been 18 months since Vargas
ognised as the world’s lowest cost jurisdic- work at Candelas with an on-site pilot plant de le Vega vended his private company
tions for brine production. the main aim for 2020. into Nathan McMahon’s Dempsey Miner-
Galan’s flagship Candelas project sits “The PFS is going to help us clarify the als to form Galan and, from his perspec-
within the Hombre Meurto salar where early assumptions we have on capex and tive, events are unfolding as expected.
companies such as Livent Corp, Galaxy opex, what the processing is going to look “It was always on the cards to fast-track
Resources Ltd and POSCO also have pro- like, how fast we can do it and what can we our exploration and to get to this point,” he
lific operations. do to accelerate certain things,” Vargas de said. “The biggest bet we did take was to
Last month, Galan announced a maiden la Vega said. keep drilling in winter. Not many explora-
lithium carbonate resource of 684,850t @ “This is the time where you go to the tion companies do that, they stop in winter,
672 mg/L for the North Zone at Candelas, drawing board and start with all ideas, you but we thought about it, we prepared our-
only eight months after the first hole was can ask all the questions that you want to selves, we had a winter contingency plan
drilled into the project. ask and test all the assumptions that you and it worked, so that’s why we were able
Vargas de la Vega said the resource had want to test before moving into full feasibil- to turn this around and come out with a re-
exceeded his company’s expectations. ity study mode.” source. Luckily we had a winter that wasn’t
“Initially you do your own assumptions Former SQM executive Daniel Jimènez too harsh.”
and estimations, but the point is when you Schuster and respected study manager – Michael Washbourne
Boris Caro, who oversaw the expansion of

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