Lithium Americas Corp. (TSX: LAC) (NYSE:
LAC) ("Lithium Americas" or the "Company") has reported
financial and operating results for the second quarter ended June
30, 2020.
This news release should be read in conjunction
with Lithium Americas’ unaudited condensed consolidated interim
financial statements and management's discussion and analysis
(“MD&A”) for the six months ended June 30, 2020, which are
available on the Company’s website and SEDAR. All amounts are
in U.S. dollars unless otherwise indicated.
“We remain focused on protecting our workers and
communities, while coordinating closely with the Province of Jujuy
to ensure we operate responsibly and safely as we begin to restart
construction activities over the next few weeks,” said Jon Evans,
President and CEO of Lithium Americas. “I would like to personally
thank all of our workers in Argentina for their commitment and
recognize the significant contribution they continue to make to the
success of the project for the benefit of all stakeholders."
“With respect to the Thacker Pass lithium
project in Nevada, we continue to make significant progress with
the recent release of the draft Environmental Impact Statement by
the Bureau of Land Management.”
Highlights
Caucharí-Olaroz Lithium Project
(“Caucharí-Olaroz”):
- As of June 30, 2020, the project
was 47% complete with $427 million (75%) of the planned capital
expenditures committed including $304 million (54%) spent.
- In mid-April 2020, following
modifications to the government’s COVID-19 related restrictions,
construction activities at Caucharí-Olaroz gradually resumed on a
limited basis with comprehensive health and safety protocols.
- Significant progress was made on
the liming plant, SX plant, civil construction and solar
evaporation ponds.
- Critical equipment, including the
fabrication of equipment in China for the lithium carbonate plant,
remain on track for delivery in the second half of 2020.
- Subsequent to the end of Q2 2020,
to protect the health and safety of our employees and contractors,
and support the Province of Jujuy efforts to limit transmission of
COVID-19, we temporarily suspended construction activities after
workers tested positive for COVID-19. All workers remain in good
condition and substantially all workers who tested positive have
since recovered and have been released from isolation.
- The Company is coordinating closely
with the Province of Jujuy, local communities, unions and its
workforce on the safe restart of operations and the implementation
of additional COVID-19 health and safety protocols.
- Remobilization is expected to begin
in the coming weeks and will be gradual in order to allow time to
adopt as well as progressively assess and refine the pandemic
related operating protocols.
- The Company is continuing to review
the impacts of the temporary suspension of the project on the
timeline and budget and will provide an update once the assessments
have been completed.
Thacker Pass Lithium Project (“Thacker
Pass”):
- Permitting continues as planned
with the draft Environmental Impact Statement released by the
Bureau of Land Management for public comment on July 29, 2020.
- The process testing facility in
Reno, Nevada has resumed full operations with appropriate COVID-19
protocols in place.
- Over 15,000 kg of high-quality
lithium sulphate has been produced at the process testing
facility.
- Third-party vendors continue to
engineer and design the lithium carbonate and lithium hydroxide
evaporator and crystallizer as well as provide performance
guarantees and product samples.
- The Company’s technical team and
consultants continue to advance work on the definitive feasibility
study with results expected in Q4 2020.
- The Company continues to explore
financing options for Thacker Pass’ construction, including the
possibility of a joint venture partner.
Corporate:
- At June 30, 2020, the Company had
$50 million in cash and cash equivalents, including $12 million
representing the Company’s 50% share of Caucharí-Olaroz cash and
cash equivalents, a $20 million drawdown on one of the credit
facilities during the six months ended June 30, 2020 to fund
Caucharí-Olaroz and $17 million held by Lithium Americas and its
subsidiaries.
- At June 30, 2020, the Company had
$187 million in undrawn credit. The Company has drawn $96 million
of the $205 million senior credit facility and $22 million from its
$100 million unsecured, limited recourse, subordinated loan
facility.
- On June 9, 2020, Ganfeng Lithium Co
Ltd. (“Ganfeng Lithium”) received regulatory approval from the
National Development and Reform Commission of the People’s Republic
of China in respect to the transaction announced on February 7,
2020 (the “Transaction”). The Transaction remains on track to close
by the end of Q3 2020 subject to remaining closing conditions.
Financial ResultsSelected
consolidated financial information is presented as
follows:
(in US$ million except per share
information) |
Three months ended June 30, 2020 |
|
Three months ended June 30, 2019 |
|
|
$ |
|
$ |
|
Expenses |
(6.5) |
|
(4.9) |
|
Net loss |
(6.0) |
|
(6.7) |
|
Loss per share - basic |
(0.07) |
|
(0.07) |
|
(in US$ million) |
As at June 30, 2020 |
|
As at December 31, 2019 |
|
|
$ |
|
$ |
|
Cash and cash equivalents |
49.7 |
|
83.6 |
|
Total assets |
319.6 |
|
293.8 |
|
Total long-term liabilities |
(161.4) |
|
(119.2) |
|
|
|
|
|
|
During the six months ended June 30, 2020, total assets
increased primarily due to capital expenditure at Caucharí-Olaroz,
partially offset with expenses in the period. Cash decreased mainly
due to capital expenditures on Caucharí-Olaroz and operating
activities, including exploration expenditures on Thacker Pass.
Total long-term liabilities increased primarily as a result of a
$22.2 million drawdown on the Company’s limited recourse loan
facility and a $12.0 million drawdown on the Company’s senior
credit facility.
Net loss for the three months ended June 30,
2020 was $6.0 million compared to net loss of $6.7 million for the
three months June 30, 2019. Net loss in Q2 2020 decreased primarily
as a result of lower equity compensation and administrative
expenses, higher foreign exchange gain and capitalization of
finance costs in the period, partially offset with the higher
engineering costs on Thacker Pass and other items.
Qualified Person:
The scientific and technical information in this
news release has been reviewed and approved by Dr. Rene LeBlanc, a
Qualified Person for purposes of NI 43-101 by virtue of his
experience, education and professional association. Dr.
LeBlanc is the Chief Technical Officer of the Company. Information
on the Company’s data verification and QA / QC procedures is
contained in Lithium Americas’ current technical reports for
Caucharí-Olaroz and Thacker Pass, available at www.sedar.com.
About Lithium
Americas:
Lithium Americas is developing Caucharí-Olaroz
in Jujuy, Argentina with 50/50 joint venture partner, Ganfeng
Lithium. Following the close of the Transaction, Ganfeng Lithium
will increase its interest in the Caucharí-Olaroz to 51% with
Lithium Americas holding the remaining 49%. In addition, the
Company is developing the 100%-owned Thacker Pass in Nevada, USA.
The Company trades on both the Toronto Stock Exchange and on the
New York Stock Exchange, under the ticker symbol “LAC”.
For further information contact:Lithium Americas
Corp.Investor RelationsSuite 300 – 900 West Hastings
StreetVancouver, BC, V6C 1E5Telephone:
778-656-5820Email: ir@lithiumamericas.comWebsite:
www.lithiumamericas.com
Forward-Looking
Statements:
This news release contains “forward-looking
information” and “forward-looking statements” (which we refer to
collectively as forward-looking information) under the provisions
of applicable securities legislation. All statements, other than
statements of historical fact, are forward-looking information.
Examples of forward-looking information in this news release
include, among other things, statements related to: development of
the Caucharí-Olaroz and Thacker Pass projects, including timing and
budget, completion of construction activities, anticipated
productions, and results thereof; the Company’s response to the
COVID-19 outbreak, the potential impact to the construction and DFS
schedules, and the expected timing for updates on its impact on
such schedules; discussions with vendors and freight forwarders,
and results thereof; the expected closing, benefits from, and
approvals related thereto, of the February 2020 Ganfeng investment
agreement; capital expenditures and programs; estimates of the
mineral resources and reserves at its properties; development of
mineral resources and reserves; government regulation of mining
operations and treatment under governmental and taxation regimes;
the timing and amount of future production; currency exchange and
interest rates; the Company’s ability to raise capital; exploration
of financing options and a potential joint venture partner for
Thacker Pass; expected expenditures to be made by the Company on
its properties; the timing, cost, quantity, capacity and product
quality of production of the Caucharí-Olaroz project, which is held
and operated through the Company’s joint venture with Ganfeng;
successful operations of the Ganfeng co-ownership structure;
ability to produce high quality battery grade lithium carbonate;
the timing, cost, quantity, capacity and product quality of
production at the Thacker Pass project; results of the Company’s
engineering, design permitting program at the Thacker Pass project,
including that the Company meets deadlines set forth herein and
receives permits as anticipated; successful results from the
Company’s testing facility and third-party tests related thereto;
capital costs, operating costs, sustaining capital requirements,
timing, results and completion of the Thacker Pass feasibility
study; funding of project permitting and DFS costs for the Thacker
Pass project; the Company’s share of the expected capital
expenditures for the construction of Stage 1 of the Caucharí-Olaroz
project; ability to achieve capital cost efficiencies; and
stability and inflation related to the Argentine peso, whether the
Argentine government implements additional foreign exchange and
capital controls, and the effect of current or any additional
regulations on the Company’s operations.
Forward-looking information is based upon a
number of factors and assumptions that, if untrue, could cause the
actual results, performances or achievements of the Company to be
materially different from future results, performances or
achievements expressed or implied by such information. Such
information reflects the Company’s current views with respect to
future events and is necessarily based upon a number of assumptions
that, while considered reasonable by the Company today, are
inherently subject to significant uncertainties and contingencies.
These assumptions include, among others, forecasted demand for
lithium products, including pricing thereof, the Company’s ability
to fund, advance and develop the Caucharí-Olaroz project and the
Thacker Pass project into production, including results therefrom
and timing thereof, the impacts of COVID-19 globally and in the
jurisdictions in which we operate, and on the availability and
movement of personnel, supplies and equipment, timing of regulatory
approvals and permits, and on third parties we are in a contractual
relationship with regarding the preparation of the DFS and with
respect to construction activities at the Caucharí-Olaroz project,
accuracy of mineral resources, including whether such mineral
resources can ever be converted into reserves, reliability of
technical data, accuracy of current budget and construction
estimates, that pending patents will be approved, ability to
achieve commercial production, general economic conditions,
maintenance of a positive business relationship with Ganfeng,
timely responses from governmental agencies responsible for
reviewing and considering the Company’s permitting activities, the
Company position in a competitive environment, and a stable and
supportive legislative, regulatory and community environment.
Forward-looking information also involve known
and unknown risks that may cause actual results to differ
materially, these risks include, among others, inherent risks in
development of capital intensive mineral projects (including as
co-owners), variations in mineral resources and mineral reserves,
global demand for lithium, recovery rates and lithium pricing,
risks associated with successfully securing adequate financing,
changes in project parameters and funding thereof, risks related to
growth of lithium markets and pricing for products thereof, changes
in legislation, governmental or community policy, political risk
associated with foreign operations, permitting risk, including
receipt of new permits and maintenance of existing permits, title
and access risk, cost overruns, unpredictable weather and
maintenance of natural resources, unanticipated delays,
intellectual property risks, currency and interest rate
fluctuations, operational risks, health and safety risks, and
general market and industry conditions. Additional risks,
assumptions and other factors are set out in the Company’s
management discussion analysis and most recent annual information
form, copies of which are available on SEDAR at www.sedar.com.
Although the Company has attempted to identify
important risks and assumptions, given the inherent uncertainties
in such forward-looking information, there may be other factors
that cause results to differ materially. Forward-looking
information is made as of the date hereof and the Company does not
intend, and expressly disclaims any obligation to, update or revise
the forward-looking information contained in this news release,
except as required by law. Accordingly, readers are cautioned not
to place undue reliance on forward-looking information.
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