Galan Lithium Limited has announced the signing of an offtake prepayment memorandum of understanding with Chengdu Chemphys Chemical Industry Co., Ltd (Chemphys). This agreement pertains to the Company’s Hombre Muerto West (HMW) project in Argentina.

Once the definitive agreements are executed, Galan Lithium will deliver 23,000 tonnes of lithium chloride (LCE) to Chengdu Chemphys Chemical Industry Co., Ltd over the initial five years of Phase 1 production from the Hombre Muerto West (HMW) project. This arrangement includes a significant US$40 million offtake prepayment facility from Chemphys, aimed at accelerating the development and advancement of Phase 1. Financial support will be crucial for ensuring the successful progression and operationalization of the HMW project.

Managing Director JP Vargas de la Vega expressed his satisfaction with the recent development, noting that the high-grade, low-impurity lithium chloride produced from Galan’s HMW pilot plant has garnered positive feedback from lithium converters, culminating in the deal with Chemphys. Chemphys, a prominent lithium processor in China and a reliable partner for major battery manufacturers, will play a key role in this agreement. The offtake partnership and the accompanying prepayment financing are crucial for the advancement of the HMW project. Galan is eager to finalize the definitive agreements and continue progressing towards the anticipated start of lithium chloride production in the latter half of 2025.

Chemphys Director Alison Dai expressed satisfaction with reaching this initial milestone with Galan, highlighting Chemphys's emphasis on high-quality lithium supplies and transparent supply chains. She commended Galan for meeting these critical standards, reinforcing the value of their partnership. Dai anticipates a successful and enduring collaboration, emphasizing the strong alignment between Chemphys’s quality and supply chain expectations and Galan’s capabilities.

Founded in 1998, Chemphys has established itself as a leading provider of high-purity lithium chemicals and innovative technologies. With a strong track record, the company played a crucial role in introducing spodumene into China in the 1990s. Chemphys has consistently delivered battery-grade and high-purity lithium products that meet the stringent requirements of major global battery materials customers. Leveraging its proprietary lithium processing technologies, including direct lithium extraction, direct precipitation, and electrochemical processes, Chemphys has solidified its position as an industry leader. The company's strategic investments in lithium projects in Argentina, located in the Salta and Catamarca provinces, further strengthen its global footprint and commitment to sustainable lithium supply.

Galan Lithium Limited is a publicly traded company focused on exploring and developing lithium resources. The company's primary assets are two high-quality lithium brine projects, HMW and Candelas, strategically located in the Hombre Muerto Salar in Argentina, a region renowned for its abundant lithium reserves.