Galan Lithium is looking to raise capital, but what for?
The post Why is the Galan Lithium (ASX:GLN) share price frozen? appeared first on The Motley Fool Australia. –
What’s the trading halt for?
The trading halt was requested on the basis of an upcoming capital raising.
The company advised that its shares will remain halted until Monday, 16 August or upon the release of the announcement.
The decision to raise capital comes right after the Galan Lithium share price surged 23.08% to $1.28 in August.
What’s next for Galan Lithium?
Galan Lithium operates the Humbre Muerto Salar project, located in the world-renowned lithium triangle in Argentina.
According to a recent company presentation for the battery minerals conference in Perth, Galan Lithium has described its project as one with some of the “best grades” and “lowest impurities” in Argentina.
The company’s preliminary economic studies and scoping study highlight a long life project yielding more than 40 years at a production rate of 20,000 tonnes per annum of battery grade lithium carbonate.
The project is expected to have a competitive capex of US$388 million with a 30% contingency.
The area possesses a rich setting for lithium brine development with features such as groundwaters sourced from volcanic rocks, hydrothermal activity and an arid climate.
The project is well-advanced in terms of exploration activities and is currently focused on the completion of a pre-feasibility study and pilot plant permits.
According to the company’s June quarter results, it is currently engaged with WSP Consulting Chile and SRK Consulting in transforming the project’s significant resource into reserves, the main foundation of its feasibility study.
The company expects drilling to follow soon after and is currently in advanced discussions with drilling companies to execute the program.
At the end of the June quarter, Galan Lithium had a cash on hand position of $15.5 million.
Galan Lithium share price snapshot
The Galan Lithium share price has joined in on the red hot lithium sector, surging 245% year-to-date.
Galan Lithium has a market capitalisation of approximately $313 million.
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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.