Australia-listed Galan Lithium on Tuesday announced a A$25-million capital raising, which would complete funding requirements for its Argentina project.

The capital raise, combined with a prepayment from offtake partner Chemphys, ensures the Hombre Muerto West (HMW) project is fully financed despite challenging market conditions.

Galan has received firm commitments for a placement of A$12-million to institutional, sophisticated, professional investors and Chemphys at A$0.105 a share.

In addition, the company announced a one-for-four non-renounceable entitlement offer to raise up to A$13.3-million at the same price as the placement.

Chemphys has agreed to subscribe for about A$4.5-million under the placement, subject to the completion of definitive offtake agreements.

Galan MD JP Vargas de la Vega said that the board had adopted a lower capital intensity Phase 1 development to an initial 4 000 t/y lithium carbonate-equivalent (LCE) rate in light of market conditions.

“Funds raised from the offer and the planned Chemphys prepayment provide the means to complete this development and keep our planned start to production in the second half of 2025,” he said.

Galan recently announced an offtake prepayment memorandum of understanding with Chemphys, after a previous agreement with commodities major Glencore fell through.

The company will supply Chemphys a total of 23 000 t of LCE over the first five years of Phase 1 production from the HMW project, while Chemphys will provide Galan with a $40-million offtake prepayment facility.

“Amid challenging market conditions Galan is moving forward with the development of HMW. We remain confident about the project economics underpinning the HMW development and the future of the lithium market,” said Vargas de la Vega.