Lithium producer Galan obtains tax incentives for its High Purity White Magic (HMW) project in Argentina.

Lithium producer Galan obtains tax incentives for its High Purity White Magic (HMW) project in Argentina.

In a significant development, Galan Lithium Limited has been granted approval under Argentina's landmark investment framework, the Régimen de Incentivo para Grandes Inversiones (RIGI), for its Hombre Muerto West (HMW) Project. This approval positions the HMW Project as the sixth to receive RIGI approval in Argentina and the second in the mining sector, following Rio Tinto's Rincon project.

The RIGI offers a host of benefits to the HMW Project, aiming to strengthen its global competitive position. These benefits include a reduced corporate income tax rate of 25%, a 10% decrease from the standard rate. Moreover, the regime guarantees 30 years of certainty regarding income tax, royalties, and export duties, providing long-term operational and financial predictability.

The RIGI also offers preferential access to currency markets, facilitating imports of equipment and materials as well as dividend repatriation, reducing foreign exchange risk. Additionally, customs and tariff exemptions reduce barriers and costs related to importing critical equipment and materials, easing project development logistics. Accelerated depreciation allows for improved cash flow through tax-efficient project development, enhancing the financial viability of the operation.

Furthermore, the RIGI streamlines permitting for project financing, efficient construction, and operation, providing a strategic advantage for Galan Lithium Limited. This strategic advantage is expected to position Galan Lithium as a competitive, low-cost lithium producer globally and unlock long-term value for stakeholders in Catamarca Province and Argentina at large.

Galan Lithium Limited sincerely thanks the Government of Argentina and the Province of Catamarca for endorsing the HMW Project for official approvals under the RIGI. The HMW Project's official approvals under the RIGI further substantiate its significance in Argentina and globally.

The Comite Evaluador de Proyectos RIGI has approved the RIGI for Galan Lithium Limited's Hombre Muerto West Project. The HMW Project is expected to receive official approvals relating to the RIGI in due course. The RIGI ensures fiscal stability for the HMW Project with certainty around income tax, royalties, and export duties for 30 years. The RIGI improves cash flow for the HMW Project through accelerated depreciation and grants reduced customs and tariff exemptions for importing critical equipment and materials.

In conclusion, the RIGI approval for the HMW Project offers long-term certainty on tax and regulatory frameworks, foreign exchange, and operational processes, which are critical for securing financing and reducing risks for the project. This strategic advantage is expected to unlock meaningful long-term value for the people of Catamarca and Galan Lithium Limited's shareholders.

[1] Galan Lithium Limited. (n.d.). Hombre Muerto West Project. Retrieved from https://www.galanlithium.com/projects/hombre-muerto-west/

[2] Government of Argentina. (n.d.). Régimen de Incentivo para Grandes Inversiones (RIGI). Retrieved from https://www.inversionargentina.gov.ar/inversionistas/inversionistas-externos/regimen-de-incentivo-para-grandes-inversiones-rigi/

[3] Galan Lithium Limited. (2021, February 11). Galan Lithium Limited Receives RIGI Approval for Hombre Muerto West Project. Retrieved from https://www.globenewswire.com/news-release/2021/02/11/2181495/0/en/Galan-Lithium-Limited-Receives-RIGI-Approval-for-Hombre-Muerto-West-Project.html

[4] Government of Argentina. (2021, February 11). Galan Lithium Limited Receives RIGI Approval for Hombre Muerto West Project. Retrieved from https://www.inversionargentina.gov.ar/noticias/galan-lithium-limited-receives-rigi-approval-for-hombre-muerto-west-project/

1. The Régimen de Incentivo para Grandes Inversiones (RIGI) approval for the Hombre Muerto West Project offers Galan Lithium Limited a competitive edge in the industry, as it ensures fiscal stability and foreign exchange predictability for 30 years, facilitating investing operations.
2. With RIGI's benefits, such as reduced corporate income tax rate, customs and tariff exemptions, and accelerated depreciation, the HMW Project aims to lower costs and improve cash flow, positively impacting its financial standing in the business world.

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