Galan Lithium (GLN) – My Thesis

Entry Exit Plan/ Not Advice

Entry: Current market cap ~A$150m (share price A$0.14-A$0.15).

Exit target: Sell into the next lithium upswing at ~0.5× Lithium Argentina’s expected upcycle value (US$1.0B ≈ A$1.5B), implying ~A$750m for GLN (~5× from ~A$150m today).

Timeframe: No fixed date — exit when the cycle turns, not on the calendar.

Dated: 5-Oct-2025

Why I'm Writing This

This is not a stock recommendation. It's my personal thesis to clarify why I own Galan Lithium. Writing it forces me to test my logic and assumptions.

Please go through the My-Investment-Thesis-and-Disclaimers Document before you proceed with this

Investing at the Bottom of the Cycle

Lithium is currently in a downcycle. History shows that the best time to invest in commodity projects is when sentiment is poor and capital is scarce.

Companies that succeed are the ones that push forward in downturns and commission into upturns. Those that start projects during booms often find themselves coming online when prices have already rolled over. Core Lithium in Australia is a cautionary example of this. Galan is positioning itself the right way — building now, so it can produce when demand and prices recover.

Capital Discipline and Conviction

The strongest proof of project viability is raising capital in weak markets. Galan has completed its capital raising for Phase 1 construction and has stated no further raise is required before production.

Equally important: in April 2025, Galan rejected a takeover offer at A$0.28/share (~A$240m valuation) — nearly triple its then-trading price. Management, who own large personal stakes, could have sold out at a premium. Instead, they held firm, signalling belief that the long-term value of Hombre Muerto West far exceeds that price.

Demand Beyond EVs

Lithium demand is not just about electric cars. The growth drivers are broader:

Together, these use cases show that battery demand is exploding, and supply is struggling to keep pace.

Brine's Cost Advantage

Brines can produce lithium carbonate directly, making them ideal for lithium iron phosphate (LFP) batteries, which now dominate in China (~70% market share).

Brine projects sit firmly at the low end of the cost curve. In today's prices, many hard-rock projects are loss-making, while brines remain viable.

Galan uses proven evaporation methods, avoiding the risks of Direct Lithium Extraction (DLE), which is untested at commercial scale.

Supply Tightening

Large mining companies like BHP are acquiring lithium assets but often banking them rather than developing. This constrains future supply, increasing the scarcity premium for juniors like Galan that are actively moving towards production.

Valuation

To put a price on Galan, I compare it with Lithium Argentina (LAR) — one of the better-known lithium names.

LAR was spun out of Lithium Americas (LAC) in 2023, separating the Argentine operations from the U.S. projects. Since then, LAR has been in the news as the U.S. government has taken a direct stake in Lithium Americas' U.S. business (the Thacker Pass project in Nevada), underscoring the strategic importance of lithium supply chains. LAR itself is a pure-play on Argentina, holding assets within the same Lithium Triangle brine basins as Galan.

On an ownership-adjusted basis, Galan’s projects are not far behind LAR’s in size and carry a clear grade advantage. Yet Galan is valued at roughly 1/6× LAR’s current market cap.

Looking forward, both companies are highly leveraged to the next lithium upcycle. If LAR re-rates from its current ~US$675m (~A$1.0b) to ~US$1.0b (~A$1.5b) in an upturn, then valuing Galan at 0.5× of LAR’s upcycle value would imply ~A$750m. From today’s ~A$150m market cap, that represents about 5× upside.

This 0.5× peer multiple is conservative, reflecting Galan’s earlier stage of development, smaller balance sheet, and ASX listing. Even with those discounts, the re-rating potential is clear: Galan offers large-cap asset exposure at small-cap pricing.

Near-Term Milestones

Horizon

This is a cycle play, not a long hold. The timing of the lithium upswing cannot be predicted precisely. My plan is simple: sell into the next upswing at ~50% of Lithium Argentina's market cap.