8-K: Lithium Americas Secures $250 Million Investment from Orion Resource Partners for Thacker Pass Project

Lithium Americas has secured a $250 million strategic investment from Orion Resource Partners to fully fund the development and construction of Phase 1 of the Thacker Pass lithium project.

Summary

• Lithium Americas has announced a $250 million strategic investment from Orion Resource Partners for the Thacker Pass lithium project.
• The investment is structured as $195 million in senior unsecured convertible notes and a $25 million Production Payment Agreement (PPA).
• Orion has also committed to potentially purchase an additional $30 million in notes within two years, subject to certain conditions.
• The initial $220 million investment is expected to satisfy remaining equity capital fundraising requirements from the U.S. Department of Energy (DOE) and General Motors (GM) related to the $2.26 billion DOE loan.
• The investment positions Lithium Americas to be fully funded for the construction of Phase 1 and manage corporate overhead costs.
• First draw on the DOE Loan is expected in the third quarter of 2025.
• Completion of Thacker Pass Phase 1, targeting 40,000 tonnes per year of battery-grade lithium carbonate, is targeted for late 2027.
• Orion has agreed, on a non-binding basis, to evaluate supporting up to $500 million of financing for Phase 2 of Thacker Pass, which also targets 40,000 t/y of battery-grade lithium carbonate.

Sentiment

Score: 8

Explanation: The announcement is positive due to securing significant funding for a key project, which de-risks the project and supports the development of a domestic lithium supply chain. The partnership with a reputable firm like Orion further enhances the positive outlook.

Positives

• The $250 million investment from Orion Resource Partners fully funds Phase 1 construction of the Thacker Pass project.
• The investment satisfies remaining equity capital fundraising requirements from the DOE and GM related to the $2.26 billion DOE loan.
• The investment provides Lithium Americas with meaningful liquidity post-final investment decision (FID) to manage its corporate overhead costs and other expenses during construction.
• The partnership with Orion, a leading resource investment firm, brings extensive experience in landmark projects.
• The investment highlights the strategic importance of Thacker Pass to national security and developing a domestic supply chain.
• The company expects to make an affirmative FID of the Thacker Pass joint venture (JV) for Phase 1 of Thacker Pass concurrently with the closing of the initial $220 million investment.

Negatives

• The convertible notes mature in 2030 and bear an initial conversion price of $3.78 per share, which represents a 43% premium to Lithium Americas' 5-day VWAP on the New York Stock Exchange ending on March 5, 2025.
• The production payments are subject to certain adjustments related to the tonnage of battery-grade lithium carbonate equivalent sold.
• The variable payments are also subject to certain adjustments related to the future price of lithium.
• Orion's potential $500 million financing for Phase 2 is on a non-binding basis and subject to further evaluation.

Risks

• The closing of the investment is subject to customary closing conditions.
• The final investment decision (FID) remains subject to certain conditions precedent, including the approval of GM.
• The company's actual results could differ materially from those anticipated in any FLI as a result of the risk factors set out herein and in the Company's filings with securities regulators.
• There are risks associated with satisfying draw-down conditions for the DOE Loan.
• There are risks associated with the timing of GM's contribution to the JV of its remaining cash contribution and the first draw on the DOE Loan.
• There are risks associated with the absence of material adverse events affecting the Company during the construction of the Project.
• There are risks associated with the ability of the Company to satisfy all draw-down conditions under the DOE Loan.
• There are risks associated with general business and economic uncertainties and adverse market conditions.
• There are risks associated with the availability of equipment and facilities necessary to complete development and construction at the Project.
• There are risks associated with unforeseen technological and engineering problems.
• There are risks associated with political factors, including the impact of the results of the 2024 U.S. presidential election on, among other things, the extractive resource industry, the green energy transition and the electric vehicle market.
• There are risks associated with uncertainties inherent to feasibility studies and mineral resource and mineral reserve estimates.
• There are risks associated with uncertainties relating to receiving and maintaining mining, exploration, environmental and other permits or approvals in Nevada.
• There are risks associated with demand for lithium, including that such demand is supported by growth in the electric vehicle market.
• There are risks associated with current technological trends.
• There are risks associated with the impact of increasing competition in the lithium business, and the Company's competitive position in the industry.
• There are risks associated with compliance by joint venture partners with terms of agreements.
• There are risks associated with the regulation of the mining industry by various governmental agencies.
• There are risks associated with assumptions concerning general economic and industry growth rates, commodity prices, resource estimates, currency exchange and interest rates and competitive conditions.

Future Outlook

Lithium Americas expects the investment to fully fund Phase 1 construction and is evaluating potential financing for Phase 2 with Orion. The company anticipates making a final investment decision (FID) for Phase 1 concurrently with the closing of the initial $220 million investment, subject to certain conditions.

Management Comments

• Jonathan Evans, Lithium Americas President and CEO, stated that Orion's commitment highlights the strategic importance of Thacker Pass to national security and developing a domestic supply chain.
• Oskar Lewnowski, Orion's Founder and Group CEO, added that Orion is excited to make this strategic investment in Lithium Americas to support the development of a domestic lithium supply chain.
• Istvan Zollei, Managing Partner of Orion, added that Thacker Pass is a world-class project, and they are committed to providing investment solutions for metals and materials critical to sustainable economic growth and the energy transition.

Industry Context

This announcement comes amid increasing demand for lithium due to the growth of the electric vehicle market and the need for a secure domestic supply chain. The investment in Thacker Pass aligns with the U.S. government's efforts to reduce reliance on foreign suppliers for critical minerals.

Comparison to Industry Standards

• The Thacker Pass project aims to produce 40,000 tonnes per year of lithium carbonate in Phase 1, which is comparable to other large-scale lithium projects globally.
• For example, SQM's expansion in Chile targets similar production levels.
• The $2.26 billion DOE loan is a significant commitment, reflecting the strategic importance of the project.
• The investment from Orion Resource Partners is similar to other private equity investments in the lithium sector, such as those made by Livent in Nemaska Lithium.

Stakeholder Impact

• Shareholders: Positive impact due to securing funding and de-risking the Thacker Pass project.
• Employees: Positive impact due to job creation during construction.
• Customers: Positive impact due to increased supply of lithium for battery production.
• Suppliers: Positive impact due to increased demand for equipment and services.
• Creditors: Positive impact due to improved financial stability of Lithium Americas.

Next Steps

• Closing of the investment, expected the week of March 10, 2025, subject to customary closing conditions.
• Making an affirmative final investment decision (FID) for Phase 1 of Thacker Pass concurrently with the closing of the initial $220 million investment, subject to certain conditions.
• First draw on the DOE Loan, expected in the third quarter of 2025.
• Advancing construction of Thacker Pass Phase 1, targeting completion in late 2027.
• Evaluating potential financing for Phase 2 with Orion.

Key Dates