8-K: Lithium Americas Secures Funding for Thacker Pass, Eyes Production by Late 2027

Lithium Americas announced its 2024 full-year results, highlighting significant progress in funding and development for the Thacker Pass lithium project, targeting production by late 2027.

Summary

• Lithium Americas reported its financial and operational results for the fiscal year ended December 31, 2024.
• The company has secured substantial funding for the Thacker Pass lithium project, including a $2.26 billion loan from the U.S. Department of Energy and investments from GM and Orion Resource Partners.
• As of December 31, 2024, Lithium Americas had approximately $594.2 million in cash, cash equivalents, and restricted cash.
• Construction capital costs and other project-related costs of $179.9 million were capitalized during the year ended December 31, 2024.
• The company expects to make the first draw on the DOE Loan sometime in the third quarter of 2025.
• Major construction at Thacker Pass is slated to begin with permanent concrete placement in May 2025, targeting completion in late 2027.
• The project aims for a nominal production capacity of 40,000 tonnes per year (t/y) of battery-grade lithium carbonate in Phase 1.
• A strategic investment of $250 million from Orion Resource Partners includes convertible notes and a Production Payment Agreement.
• GM acquired a 38% asset-level ownership stake in Thacker Pass through a joint venture, contributing $330 million in cash.
• The NI 43-101 Technical Report includes a Proven and Probable Reserve estimate of 14.3 million tonnes (Mt) of lithium carbonate equivalent (LCE) at an average grade of 2,540 parts per million (ppm) lithium (Li).
• The Measured and Indicated Resource estimate is 44.5 Mt LCE at an average grade of 2,230 ppm Li.
• The Reserve estimate supports an expansion plan of up to five phases targeting total nominal production capacity of 160,000 t/y of battery-quality lithium carbonate with an 85-year mine life.
• The company reported a net loss of $42.6 million for the year ended December 31, 2024, compared to a net loss of $5.1 million in 2023.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the significant progress in securing funding and advancing the Thacker Pass project, despite the increased net loss. The project's potential to become a major lithium producer and the strategic partnerships are viewed favorably.

Positives

• Successful funding secured for Phase 1 of the Thacker Pass project, including a $2.26 billion DOE loan and investments from GM and Orion.
• Significant progress in site preparation for major construction, with permanent concrete placement targeted for May 2025.
• Increased mineral resource and reserve estimates for Thacker Pass, supporting a potential 85-year mine life.
• Strategic partnerships established with GM and Orion to advance the project.
• Approval of an $11.8 million grant from the U.S. Department of Defense to support local power infrastructure upgrades.
• The company completed an underwritten public offering of 55 million common shares at a price of $5.00 per common share for aggregate gross proceeds to the Company of $275 million.
• The company and its engineering, procurement and construction management contractor, Bechtel, entered into a National Construction Agreement (Project Labor Agreement) with North Americas Building Trades Unions for construction of Thacker Pass.

Negatives

• The company reported an increased net loss of $42.6 million for the year ended December 31, 2024, compared to $5.1 million in 2023, primarily due to higher transaction costs and losses on financial instruments.
• The project is still in the development phase, with production not expected until late 2027, which introduces execution risk.

Risks

• Delays in obtaining necessary permits and approvals could impact the project timeline.
• Fluctuations in lithium prices could affect the project's economic viability.
• Construction and operational risks associated with a large-scale mining project.
• Potential challenges in securing additional financing for future phases of the project.
• The company's ability to satisfy all conditions to closing of the strategic investment with Orion.
• The ability of Lithium Nevada LLC (LN) to draw-down on the DOE Loan on the anticipated timeline, or at all, and the absence of material adverse events affecting the Company during this time.
• The ability of LN to satisfy all draw-down conditions for the DOE Loan in a timely manner.
• The ability of the Company to perform conditions and meet expectations of agreements with GM.
• Unforeseen technological and engineering problems.
• 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.
• Uncertainties inherent to feasibility studies in the NI 43-101 Technical Report and S-K 1300 Technical Report and mineral resource and mineral reserve estimates.
• The mine processing facilities, based on the results of the testing facility and third-party tests, performing as expected.
• The ability of the Company to secure sufficient additional financing, advance and develop Thacker Pass, and to produce battery grade lithium.
• The respective benefits and impacts of Thacker Pass when production operations commence.
• Settlement of agreements related to the operation and sale of mineral production as well as contracts in respect of operations and inputs required in the course of production.
• The Companys ability to operate in a safe and effective manner, and without material adverse impact from the effects of climate change or severe weather conditions.
• Uncertainties relating to receiving and maintaining mining, exploration, environmental and other permits or approvals in Nevada.
• Demand for lithium, including that such demand is supported by growth in the electric vehicle market and lithium-ion battery market.
• Current technological trends.
• The impact of increasing competition in the lithium business, and the Companys competitive position in the industry.
• Continuing support of local communities and the Fort McDermitt Paiute and the Shoshone Tribe in relation to Thacker Pass, and continuing constructive engagement with these and other stakeholders, including any expected benefits of such engagement.
• Risks related to cost, funding and regulatory authorizations to develop the WFH.
• The stable and supportive legislative, regulatory and community environment in the jurisdictions where the Company operates.
• Impacts of inflation, deflation, currency exchange rates, interest rates and other general economic and stock market conditions.
• The impact of unknown financial contingencies, including litigation costs, environmental compliance costs and costs associated with the impacts of climate change, on the Companys operations.
• Increased attention to environmental, social, governance and safety (ESG-S) and sustainability-related matters.
• Risks related to the Companys public statements with respect to such matters that may be subject to heightened scrutiny from public and governmental authorities related to the risk of potential greenwashing, (i.e., misleading information or false claims overstating potential sustainability-related benefits).
• Risks that the Company may face regarding potentially conflicting initiatives from certain U.S. state or other governments.
• Estimates of and unpredictable changes to the market prices for lithium products.
• Development and construction costs for Thacker Pass, and costs for any additional exploration work at the Project.
• Estimates of mineral resources and mineral reserves, including whether mineral resources not included in mineral reserves will be further developed into mineral reserves.
• Some of the modifying factors used to convert mineral resources to mineral reserves may change materially, and could materially impact the mineral reserve estimate.
• Reliability of technical data.
• Anticipated timing and results of exploration, development and construction activities, including the impact of ongoing supply chain disruptions and availability of equipment and supplies on such timing.
• Timely responses from governmental agencies responsible for reviewing and considering the Companys permitting activities at Thacker Pass.
• Availability of technology, including low carbon energy sources and water rights, on acceptable terms to advance Thacker Pass.
• Government regulation of mining operations and mergers and acquisitions activity, and treatment under governmental, regulatory and taxation regimes.
• Ability to realize expected benefits from investments in or partnerships with third parties.
• Accuracy of development budgets and construction estimates.
• That the Company will meet its future objectives and priorities.
• That the Company will have access to adequate capital to fund its future projects and plans.
• That such future projects and plans will proceed as anticipated.
• Compliance by LN and GM with terms of the JV agreements and the ability of LN and GM to fund their share of funding obligations for Thacker Pass.
• The lack of any material disputes or disagreements between LN and GM.
• The regulation of the mining industry by various governmental agencies.
• Assumptions concerning general economic and industry growth rates, commodity prices, resource estimates, currency exchange and interest rates and competitive conditions.

Future Outlook

Lithium Americas aims to commence major construction at Thacker Pass in May 2025, targeting production in late 2027. The company anticipates achieving fully funded status for Phase 1 and is exploring financing options for Phase 2.

Management Comments

• Jonathan Evans, President and Chief Executive Officer of Lithium Americas said, '2024 was a transformational year in moving Thacker Pass forward to develop a North American lithium supply chain.'
• Mr. Evans added, 'With the ramp-up of major construction at Thacker Pass, we are excited to start creating new jobs and bringing economic activity to northern Nevada.'

Industry Context

This announcement underscores the growing demand for lithium to support the electric vehicle market and the development of a North American lithium supply chain. Lithium Americas' progress at Thacker Pass positions the company as a key player in this evolving industry.

Comparison to Industry Standards

• Lithium Americas' Thacker Pass project is positioned to be a significant lithium producer, targeting 40,000 t/y of battery-grade lithium carbonate in Phase 1, comparable to other major lithium projects globally.
• The project's resource estimate of 44.5 Mt LCE is substantial, placing it among the largest known lithium deposits worldwide.
• The company's strategic partnerships with GM and Orion are similar to other collaborations in the lithium industry, where automakers and financial institutions invest in lithium projects to secure supply.
• Compared to Albemarle and SQM, two of the largest lithium producers, Lithium Americas is still in the development phase, but Thacker Pass has the potential to become a major source of lithium in the future.
• The DOE loan is a significant endorsement of the project and aligns with government initiatives to support domestic lithium production, similar to other government-backed projects in the renewable energy sector.

Stakeholder Impact

• Shareholders: Potential for long-term value creation through the development of Thacker Pass.
• Employees: Job creation during construction and operation of the project.
• Customers: Increased availability of battery-grade lithium carbonate to support the electric vehicle market.
• Suppliers: Opportunities to provide goods and services to the Thacker Pass project.
• Local Community: Economic benefits and job opportunities in northern Nevada.

Next Steps

• Commence major construction at Thacker Pass with permanent concrete placement in May 2025.
• Continue detailed engineering work, targeting over 90% completion by year-end 2025.
• Make the first draw on the DOE Loan sometime in the third quarter of 2025.
• Achieve first occupancy of the Workforce Hub in the second half of 2025.
• Commence first steel installation in September 2025.
• Declare the final investment decision (FID) for Phase 1.

Key Dates

Keywords

Lithium Americas, Thacker Pass, Lithium, Mining, Battery-grade lithium carbonate, DOE Loan, GM, Orion Resource Partners, Funding, Construction, Reserves, Resources