Galan Lithium : HMW Project Update - Strong Progress, New Targets Identified

ASX ANNOUNCEMENT

31 March 2022

Hombre Muerto West Project Update: DFS and Pilot Plant Works Making Strong Progress, New Resource Targets

Identified ______________________________________________________________

Highlights:

• • HMW Definitive Feasibility Study (DFS) on budget and on track for completion by end-CY2022.

• • Two pumping boreholes now completed with short term pumping tests successfully performed on both wells; third borehole to commence shortly.

• • Long term borehole hydraulic pumping tests set to commence in May.

• • Pilot plant construction progressing well; main pond completed with brine filling imminent and evaporation piloting to follow

• • Exploration diamond drill hole underway at Pata Pila; to provide key information on potential Mineral Resource extension beyond salar limits.

• • Mineral Resource update on track for delivery Q3 CY2022.

• • Recently completed Transient Electromagnetic (TEM) geophysical survey identifies potential new Mineral Resource zones.

• • New target zones exploration drilling set to commence in Q2 CY2022.

Galan Lithium Limited (ASX: GLN) (Galan or the Company) is pleased to provide an update on the intensive site and study activities in progress for its 100%-owned Hombre Muerto West Lithium Project (HMW) in Catamarca Province, Argentina.

Galan's Managing Director and CEO, JP Vargas de la Vega, said:

"I have spent the past few months on the ground in Argentina and Chile working with our teams, relevant government authorities and the local communities. I am very pleased to say that our world-class lithium HMW Project is progressing strongly, on all fronts. My meetings with local Catamarca authorities saw evidence of excellent governmental and community support for the HMW and Candelas Projects. We are proud to be rapidly advancing projects that offer such economic and social benefits to the broader regions in which they are located."

"Despite the logistical challenges posed by COVID-19, our key activities at the HMW Project remain on track and on budget. Even more importantly, we remain lost time injury free with all work being undertaken in a safe and highly professional manner. Thank you to our dedicated teams in Argentina, Chile and Australia, who have Galan blood in their veins."

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Level 3, 30 Richardson Street, West Perth, WA 6005 PO Box 396, West Perth, WA, 6872

Ph. [phone] Fax. [phone]www.galanlithium.com.auABN: 87 149 349 646

"Finally, as part of this update it is also pleasing to be able to demonstrate the further potential Mineral Resource upside evidenced by the recent TEM geophysical survey. We look forward to aggressively drilling these new target zones from next quarter and through the rest of 2022."

Definitive Feasibility Study update

The HMW Definitive Feasibility Study (DFS) is being led by leading global engineering consulting group,

Hatch. The Feasibility Study teams Hatch with Galan's other key consultants, including Ad-Infinitum, SRK and WSP, along with the Company's own project teams in Argentina, Chile and Australia.

Early DFS workstreams have now been completed, including various trade-off analyses for location of main infrastructure and process design. Work has also now commenced on detailed facilities design.

The Environmental Impact Assessment (EIA) preparation has begun with Galan further strengthening its team in this area, allowing for regular interaction with all key stakeholders on an ongoing basis.

The DFS is on budget and on schedule for completion by end-CY2022.

Borehole well drilling and pumping activities

Drilling of two pumping borehole wells has now been completed. These two wells are located at Pata Pila (to 225m depth) and at Rana de Sal (to 200m depth).

Short-term pumping tests were successfully performed on both wells (see Figure 1). Long term hydraulic pumping tests are set to commence in May 2022, once monitoring wells are constructed.

Figure 1 - Brine from pumping well PBPP-1-21 located at Pata Pila

Drilling of the third pumping borehole is set to commence shortly.

Pilot Plant progress

Construction of the initial evaporation pond (S1), covering approximately 3,000 m2, has now been completed (see Figure 2). Commencement of brine filling is imminent as all quality control inspections have been completed.

Commencement of brine filling sees the initiation of the evaporation testing activities of the Pilot Plant. This is a major milestone given that it marks the commencement of large-scale piloting activities at HMW.

Figure 2 - Evaporation Pond S1 Ready for Filling

The data set to be obtained from this initial evaporation trial will allow the calibration of the simulation model to predict the completion time for achieving the first batch of brine concentrate with 6% of Li contents produced by the pilot plant.

New camp facilities

The new expanded camp at HMW has been operational since mid-January 2022. An additional 20,000 litre diesel tank and residual storage area have also been constructed.

Exploration drilling activities

An exploration diamond drillhole, EXP-002, is currently underway at Pata Pila. This drillhole is strategically located on higher ground and approximately 1km west from the Livent tenement boundary. This drillhole is expected to provide key geological data for testing extension to the existing Mineral Resource, in both horizontal and vertical dimensions, from the Salar's limit.

An update to the existing HMW Mineral Resource estimate is expected to be completed by Q3 CY2022.

Given recently identified new Mineral Resource expansion targets (see below), Galan now expects to continue exploration diamond drilling activities at HMW through the remainder of CY2022.

Geophysics delivers new Mineral Resource expansion targets

Quantec Geoscience Argentina S.A. recently completed nearly 32km (8 lines) of Transient Electromagnetic (TEM) surveying that spanned across Rana de Sal, Pucara del Salar, Casa del Inca III, and Pata Pila tenements. The TEM method provides information on the electric resistivity in the subsurface and is a well-suited method for Li brine exploration. Galan's lithium brine consultants, WSP, then integrated the widespread coverage of this new survey with the existing HMW data from past Quantec CSAMT geophysical surveys.

The TEM survey was able to image beneath recent lava flows to reveal a potentially significant brine body extension. The TEM survey results complement the interpretation of brine units previously recognised as well as the conceptual hydrogeological model. Lateral continuity of the brine in the different parts of the HMW are also now better supported.

Most significantly, WSP's new model has identified potential new Mineral Resource zones in Pucará del Salar, as well as the recently acquired Casa del Inca III. Any further Mineral Resource expansion could naturally deliver further productive zones and the opportunity to extend the HMW's wellfield.

Exploration diamond drilling of these new target zones is planned to commence in Q2 CY2022.

WSP Interpretation of TEM results

The TEM profiles of the recent geophysical exploration campaign were compared in a 3D model with the CSAMT profiles of the 2018 and 2019 campaigns. The objectives were:

• 1. To determine the lateral continuity of the brine between the different properties.

• 2. To explore the potential presence of brine below the recent lava flows of Casa del Inca.

• 3. To explore the properties of Rana de Sal II, Pucará del Salar.

• 4. To determine the lateral extension and potential connection of the brine from these properties to Rana de Sal I.

The new TEM profiles confirm the lateral continuity of subsurface brine response along the profiled tenements. This is observed as relatively low to moderate resistance zones corresponding with the upper sediments on the alluvial zone (the lower the resistance or higher conductivity, the better for brines exploration). Importantly, below the surface lava flows (for example in the Casa del Inca III tenement) a geoelectric unit was also identified which allows inference of the presence of brine units below this volcanic cap. This finding is planned to be confirmed with future drilling.

In general, the TEM profiles are consistent with geoelectric units described in the previous campaigns (SRK) and improves the geometric extension along the new HMW tenements. The TEM survey also shows a deep high resistance unit is persistent throughout the whole area, which is interpreted as an evaporitic unit (halite) or rock basement. This data is set to assist in the definition of the depth extent of the HMW Mineral Resource.

Figure 3 - HMW's Geophysics looking West, the darker the areas the more conductive and potentially associated with brines occurrence

Figure 4 - HMW Geophysics looking North showing strong potential for brines (darker areas)

Downhole probe at Rana de Sal (Pumping Borehole No 2)

Borehole geophysics were conducted on borehole well, PBRS-01-21, within the Rana de Sal I tenement. Several geophysical probes were used including Borehole Magnetic Resonance (BMR), Conductivity and Temperature probe, Natural Gamma and Caliper.