10-K: Lithium Americas Secures $250 Million Investment Amid Thacker Pass Project Progress

Lithium Americas Corp. announces a $250 million strategic investment from Orion Resource Partners as it advances the Thacker Pass project towards targeted completion in late 2027.

Summary

• Lithium Americas Corp. (LAC) has secured a $250 million investment from Orion Resource Partners to support the development of Phase 1 of the Thacker Pass project.
• The investment includes a $195 million senior unsecured convertible note and a $25 million production payment agreement.
• LAC expects to draw on the $2.26 billion DOE Loan in Q3 2025.
• The company holds a 62% interest in Thacker Pass, with GM owning the remaining 38%.
• Completion of Phase 1 of Thacker Pass is targeted for late 2027, with full capacity production anticipated in 2028.
• Detailed engineering is over 55% complete, and earthworks are over 90% complete.
• The company is focused on preparing the site for major construction, with permanent concrete placement targeted to start in May 2025.
• The Thacker Pass project has a possible mine life of 85 years and a total possible nominal capacity of Phases 1 through 5 of 160,000 t/y Li2CO3.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook due to the secured funding and progress in the Thacker Pass project, but also acknowledges risks and challenges associated with the project's development and operation.

Positives

• The Orion investment provides significant funding for the development and construction of Phase 1 of Thacker Pass.
• The DOE Loan provides substantial financial support for the project.
• The JV with GM brings additional funding and expertise to the Thacker Pass project.
• The company is making progress on site preparation and engineering for Phase 1 construction.
• The Thacker Pass project has a long mine life and significant production capacity.

Negatives

• The company has a limited history of completing mining and chemical processing projects.
• The novel process for producing lithium carbonate from Thacker Pass has not been demonstrated at commercial scale.
• The company anticipates it will continue to have negative cash flow from operating activities in future periods until profitable commercial production is achieved at Thacker Pass.

Risks

• The commercial viability of the Thacker Pass Project depends on numerous uncontrollable factors such as permitting and financing.
• The company's ability to draw on the DOE Loan is contingent on meeting specific conditions and covenants.
• The company's ability to maintain and amend permits is uncertain and subject to regulatory, administrative and litigation challenges.
• The expected capital and operating costs for Thacker Pass are based on various assumptions that may prove inaccurate.
• The company's U.S. operations, coupled with its domicile in British Columbia, and the evolving political landscape, including increased geopolitical tensions and industrial policies, could impact its ability to fund the project.
• Changes in government laws and regulations, including those related to taxation, environmental compliance and permitting, may affect development.
• Opposition could lead to delays or prevent the project from proceeding, impacting development.
• Failure to achieve production estimates for Thacker Pass, due to inaccuracies in assumptions or lower quality ore, could materially and adversely affect cash flows and profitability.
• The success of operations will be affected by the fluctuating market price of lithium products, and failure to meet battery-grade quality or customer specifications could reduce the prices the company is able to realize for its products and its customer base.
• Climate change may impact water availability, which could increase litigation, regulatory compliance costs and physical climate risks could further affect operations and safety.
• GMs share ownership and rights may influence corporate actions and diverge from other shareholders interests, potentially affecting liquidity and market price, amount other areas.
• GM has significant influence over Thacker Passs development due to investor rights, its rights as a JV Partner and board representation at both the Company and Lithium Nevada Ventures, which may affect other securityholders and the Companys actions, including the determination to make a FID in respect of Phase 1 of Thacker Pass.
• Upon conversion of the Orion Note, if issued, Orion may hold a substantial equity position in LACs business and may thereafter exercise influence over the Company.
• The Companys debt agreements, including the DOE Loan and the Orion Note, if issued, contain restrictions that limit its flexibility in operating its business.
• The Companys share price may fluctuate due to factors beyond its control and may not reflect its operating performance, with no guarantee of a liquid market for reselling shares.
• Future financings may dilute current shareholders interests by issuing more shares or equity securities, reducing ownership percentages and potentially lowering share prices.
• Financing through capital markets could dilute shareholders interests and impose restrictions.
• The Company cannot generate earnings or pay dividends while Thacker Pass is in development, posing a risk to investors who may not see returns for the foreseeable future.
• Challenges in securing intellectual property protection could leave the company vulnerable to competition, potentially diminishing the commercial potential of its proprietary technologies.
• The Companys growth and operations rely heavily on retaining and attracting key personnel in a competitive market, and failure to do so could affect its business.
• Relying on consultants for mineral exploration expertise carries the risk of delays or increased costs if their work is found to be incorrect or inadequate.
• Compliance with regulatory requirements and potential litigation resulting therefrom could be costly, time-consuming and have a significant adverse impact on business and financial condition.
• Increased reliance on digital technologies and new information systems to support the growing business could increase costs and cybersecurity related threats.
• Incorporation in a jurisdiction outside the U.S. may make it difficult or impossible for U.S. investors to serve process for civil liabilities in the U.S.
• Loss of FPI status requires increased regulatory reporting requirements and associated costs.
• If certain Canadian Tax requirements are not met, the Company and Lithium Argentina could be subject to substantial tax liabilities resulting from the Separation.
• Shareholders may face significant tax liabilities, impacting the intended tax-free status of the Common Shares received pursuant to the Arrangement.
• The Company faces restrictions for three years to maintain tax-free status for shareholders, limiting its ability to pursue certain strategic transactions.
• Changes in U.S. and Canadian tax laws could increase the Companys tax liabilities.
• Any indemnification claims may have a material adverse effect upon the Company.
• If classified as a PFIC, U.S. shareholders may face greater tax liabilities, interest charges and additional reporting obligations, impacting their overall tax situation.

Future Outlook

LAC expects to achieve fully funded status for the development and construction of Phase 1 of Thacker Pass for the duration of construction, with completion targeted for late 2027 and full capacity production in 2028.

Industry Context

Global electric vehicle (EV) adoption is driving lithium demand, with total demand expected to more than double by 2030. Thacker Pass is expected to help secure North Americas lithium battery supply chain and reduce dependence on foreign countries for supply.

Comparison to Industry Standards

• The document mentions Benchmark Mineral Intelligence estimates for global EV adoption and lithium demand.
• It also compares Thacker Pass production to the lithium needs for electric vehicles, estimating it can support up to 800,000 EVs annually.

Legal Proceedings

• In March 2023, the State Engineers decision was appealed in state court by a local ranching company and the case is currently pending.

Related Party Transactions

• The document details the JV Transaction with GM, including the $625 million in total committed cash and letters of credit from GM.
• It also mentions the Offtake Agreement with GM, which was extended to 20 years and includes an additional 20-year offtake agreement for up to 38% of Phase 2 production.

Stakeholder Impact

• The Thacker Pass project is expected to create approximately 2,000 jobs during construction and additional jobs during operations.
• The company is committed to hiring locally where possible and has been working with Great Basin College to develop and offer a Workforce Development Training program for local communities and the Tribe.
• The company is collaborating with the Fort McDermitt Paiute and Shoshone Tribe to increase transparency and address impacts from the project.
• The company is collaborating with the Humboldt County School District and the BLM to finalize the conceptual design and location of a new K-8 school in Orovada.

Next Steps

• Completion of the Orion Investment is expected early in the second quarter of 2025.
• The company currently expects to make the first draw on the DOE Loan sometime in Q3 2025.
• Current activity at Thacker Pass, as of March 28, 2025, has been focused on preparing the site for major construction, which will start with permanent concrete placement targeted to start in May 2025.
• First steel installation is targeted to commence in September 2025.

Key Dates

Keywords

Lithium Americas, Thacker Pass, lithium, mining, Orion, investment, DOE Loan, GM, battery materials, resources