welcome to CEO insights I'm Marilyn De Guzman with investing News Network Australian mining firm Galan lithium recently announced an important deal with resource giant Glen core that can significantly impact galan's ombre muerto West lithium project in Argentina and here to talk about what the means for his company is galant's managing director JP Vargas deaa hi JP Hi Marilyn so there's two components with that recent announcement one is a um off-take deal with Glen core and a financing agreement for our viewer


viewers who are not familiar with that announcement could you provide just a recap of those uh news releases yeah well um to to start we are an Australian listed company with uh our Flagship project is at the ramort soul flat and we are the best soul flat in Argentina our neighbors are Bosco live and and Alim the last two are going to merge um in at the end of the year and what we have done is we have two DFS for phase one and two and the deal that we've done with Glen Co is for DFS one so we have secure a 5,000 tons of


thereabouts um production in an office take per year for 5 years so there's a a binding commitment from Glenco to buy our lithium chloride concentrate that will be producing from our operations in Argentina and we expect to be in operations we're in construction now and we expect to be in operations on the first half of 2025 yes and um so the other component with that is the financing agreement could you talk a bit more about that as well yeah the with that the fin financ in is uh from a bracket from 70 to100


million us to find the um Mar um the the investment for developing this this project today we have invest Galan directly uh more than $20 million ourself directly and the investment or the the financing solution from Glenco will allows us to pretty much complete the old investment required for phase one so in other words we are pretty much out there with all the financing requirement to become the new lium producer at the lium triangle so the let's talk about the off take agreement uh for for a second how do you you know


when you're talking to your shareholders how does this agreement what does it mean for the future of the project and how is it increasing shareholder value um absolutely it well there are two components from this one is the financial side that we explain we are mostly covered for our CAPIC and potentially fully covered for the CAPIC expenditure requir for phase one but importantly this cements Gant strategy to produce lithium chloride concentrate everyone else at the lithium triangle is producing or going to be producing


lithium carbonate so the fact that gleno has partnered with us to buy the chloride concentrate and um and it's um and place it that within Argentina it's um is the last leg of the things that we need as a company to fully endorse our strategy to show that the lithium chloride concentrate strategy is a valid one that Glenco see the same value as we see it and importantly it cements our phase two in terms that we can look now into a larg production from uh Galan uh going from 5,000 tons to up to 21,000


tons per year that the Gap is around 16,000 tons increase in production from phase one and phase two that we believe that we can also um place within the Argentine Market as a fit stock of lithium carbonet plants within Argentina Bear In Mind by 2026 the should be approximately 10 new plants processing plants for carbonate so we are the only one there to be producing fit stock for all these plants and we believe that we can do this and Glenco believes the same thing mainly because it's not an easy


fit to produce lithium from sulfat that comes with its own um challenging challenges and we believe that we can smooth things up especially at the beginning of production that comes with every project in in um in the mining industry so we believe that we can smooth the production and increase production in Argentina and cement this um uh growth path of all the other companies um within Argentina and we will have a sound um cash flow coming from this that will help us also to look at our phase three and four and we can


look all from our end in the future for adding further value on a downstream if that is something that we can do down the track I guess you know if you could talk about timelines a little bit what um what timelines are we looking uh at in terms of Phase One Construction so Phase One Construction should be finalized by mid 2024 and thereafter we expect to be in production in the first half of 2025 phase two should immediately commence after phase one on the second half of 2024 with production in the second half


of 2026 this off-take agreement with Glen cor really signify sort of some a trend that's been happening in the I guess the resource Market or like the value chain uh for um the battery value chain the EV sector are you anticipating future potential agreement with end users for your lithium supply like battery manufacturers or automakers absolutely we not close to the idea of getting oems uh involved in a sa partner that will buy our lithium carbonate if we find a Toler we also looking at how to process this and


potentially this is something that we may look at the end of uh phase two or beginning of phase three so there's room ample room for everything that we will like to do bear in mind we have our Phase 1 5,000 tons Phase 2 is 21,000 tons phase three we gone to 40 and phase four up to 60 so galance has a long path of growth and development that we want to develop in the next five to six years and but we want to demonstrate as well that we can achieve this on a secure or minimizing the risk of EX ution minimize


the risk of financing because most of companies is the critical path when they start when they're most vulnerable to the market to funding to get things wrong and therefore we just want to walk before we run in other words right and now as we you know approaching the end of 2023 let's talk about 2024 what plans do you have for the company what should the investor Community expect from the company in 2024 absolutely we um the Milestones expect the fogal line in the first quarter of 2024 we expect pwn number one


to be fully constructed uh line it so we need to line it so it's waterproof fill it with Brine and start the evaporation process there after we expect uh the evaporation process to take 12 months to get to your production so that's a critical part for us for us in parallel we do have a project in Western Australia south of the green bushes mine the green bushes mine is the biggest highest grade mine in the world and it's in Western Australia and we have an exploration ground that we are currently doing to a


physics and we expect to drill that in the first quarter of 2024 thereafter we expect to finalize the um construction of phase one in Argentina and in in mid 2024 and production in in the first half of 2025 results from Green bushes just to run this up we should be expected in Q2 uh 2024 well exciting times ahead for the company for sure thanks again JP for uh sharing your insights today thanks very much aarin and thanks everyone for watching join us again next time for another engaging conversation


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