Why is this ASX lithium share charging 15% higher today?

Galan Lithium Ltd (ASX: GLN) shares have returned from their trading halt with a bang on Thursday morning.

In early trade, the ASX lithium share is up 15% to 50 cents.

Why is this ASX lithium share jumping?

Investors have been bidding the company’s shares higher after Galan announced a major milestone at its Hombre Muerto West (HMW) project in Argentina.

According to the release, the company has completed wet plant commissioning and produced its first processed lithium chloride brine at HMW. This processed brine has now been discharged into the final evaporation ponds.

This is a key step for the ASX lithium share as it moves closer to lithium chloride concentrate production and potential product sales in the second half of 2026.

What happened?

Galan advised that following completion of Phase 1 construction in March, it has successfully completed electrical and mechanical testing and transitioned HMW into wet commissioning.

The nanofiltration plant was initially commissioned with raw brine at low pressure before being fed with pre-concentrated brine under high pressure.

Importantly, independent laboratory assays have validated that impurity separation performance is consistent with plant design specifications.

The processed lithium chloride will now remain in final evaporation ponds for around three months. During this period, water will be removed and contained lithium will be concentrated. This is expected to produce lithium chloride concentrate with 6% lithium content, which will then be sold under Galan’s Phase 1 offtake arrangements.

Ramp-up underway

Galan noted that it has not yet achieved stabilised production at HMW and is now moving into an optimisation phase.

This means processed brine rates are expected to vary initially. However, once optimisation is complete, the company expects processing to stabilise at an annualised rate of 4,000 tonnes per annum lithium carbonate equivalent.

The ASX lithium share also highlighted that it has around 10,000 tonnes of LCE brine inventory in evaporation ponds. Management said this provides immediate feedstock for the production ramp-up phase.

Management commentary

Galan’s managing director, Juan Pablo Vargas de la Vega, appeared to be very pleased with the news. He said:

The significance of the successful commissioning of the HMW plant cannot be overstated. The HMW mining operations have now been completely de-risked from start to finish and in just a few months we expect to have lithium chloride concentrate ready for sales. To our knowledge Galan will be the only greenfield lithium project coming online in 2026. Becoming a new source of potential supply to the battery supply chain is very exciting and it is well timed to take advantage of a favourable lithium pricing environment.

The post Why is this ASX lithium share charging 15% higher today? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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 Scott Phillips.