Lithium Americas Corp. (TSX: LAC) (NYSE: LAC)
(“
Lithium Americas”
or the
“
Company”) has reported financial and operating
results for the third quarter ended September 30, 2022 (“
Q3
2022”).
HIGHLIGHTS
Argentina
Caucharí-Olaroz
- Construction
continues to progress towards production with key areas of the
processing plant commenced commissioning in late Q3 2022.
- With
construction nearing completion, focus remains on prioritizing
production volume over product quality during ramp-up.
- As previously
announced in July 2022, construction on a portion of the
purification process designed to achieve battery-quality was
deferred to the first half of 2023.
- The Company
expects to provide an update and guidance on production ramp-up
schedule around the end of 2022.
- Due primarily to
the low official Argentine exchange rate and high local inflation,
capital cost estimates at the official exchange rate have been
revised to $852 million (on a 100% basis), up 15% from $741 million
previously; however, at the substantially more favorable
market-based exchange rate available and the streamlined production
plan, the Company expects that there will be no material change to
its total funding requirements for Stage 1.
- As of September
30, 2022, 85% of the budget has been spent with a substantial
portion deferred until 2023, to complete the purification
process.
- As of September
30, 2022, the Company had $63 million (49% share) in capital costs
remaining at the official Argentine exchange rate, requiring
funding of an estimated $31 million based on the latest
market-based exchange rate.
- Development
planning for Stage 2 expansion of at least 20,000 tonnes per annum
of lithium carbonate equivalent continues to progress to align with
completion of Stage 1.
- In Q2 2022, the
seven local communities in the vicinity of the project approved the
proposed expansion.
Pastos Grandes
- The Company
continues to advance the Pastos Grandes $30 million development
plan, with completion of the plan and a resulting construction
decision expected for the second half of 2023.
- Following the
recent exploration results from the adjacent property owned by
Arena Minerals Inc. (TSXV: AN) and additional modelling of the
basin, the Company is updating its exploration plan.
United States
Thacker Pass
- The Lithium
Technical Development Center (“LiTDC”) in Reno
continues to operate based on the Thacker Pass flowsheet processing
raw ore to final battery-quality lithium carbonate.
- As of September
2022, over 100 tonnes of lithium ore were collected at Thacker Pass
to feed the LiTDC to produce product samples for potential
customers and partners.
- Results of
ongoing test work to de-risk each step of the flowsheet continues
to be in line with expectations.
- In Q2 2022,
cultural work on approximately 13,000 acres was completed as
required under the National Environmental Policy Act and conducted
by an independent consultant, with the oversight and assistance of
the Fort McDermitt Paiute and Shoshone Tribe
(“Tribe”). No areas of archeological significance
were identified at Thacker Pass.
- In October 2022,
the Company signed a Community Benefits Agreement with the Tribe,
to establish a framework for continued collaboration and define
long-term benefits for the Tribe.
- On August 11,
2022, briefings were submitted for the appeal of the issuance of
the Record of Decision (“ROD”) for Thacker Pass.
The US District Court, District of Nevada has scheduled an oral
hearing for January 5, 2023.
- Lithium Americas
is moving ahead with pre-construction activities, including the
selection of an engineering, procurement and construction
management firm to execute the development and construction plan
for Thacker Pass.
- The Company is
also evaluating potential investment, partnership and supply
agreements to support the development of a North American supply
chain. In addition, Lithium Americas continues to progress the U.S.
Department of Energy Advanced Technology Vehicles Manufacturing
loan program application.
- The timing for
completion of a feasibility study is now scheduled for Q1 2023, in
order to reflect ongoing feedback from strategic partnership and
financing process, results of LiTDC operations and to align with
the anticipated timing of the ROD appeal ruling.
Corporate
- As at September
30, 2022, the Company had $392 million in cash, cash equivalents
and short-term bank deposits, with an additional $75 million in
available credit.
- On July 18,
2022, the Company made an equity investment in Ascend Elements,
Inc. (“Ascend Elements”), a US-based lithium-ion
battery recycling and engineered material company, by way of a
subscription for Series C-1 preferred shares for $5 million.
- On September 20,
2022, the Company entered a Strategic Collaboration Agreement with
Green Technology Metals Ltd. (ASX:GT1) (“GT1”), in
which it owns a 5% stake, to advance a common goal of developing an
integrated lithium chemical supply chain in North America.
- In September
2022, the Company was recognized on the TSX30 for the second
consecutive year, ranking as one of the top 30 performers on the
TSX.
- The Company
continues to advance a potential separation of its US and Argentina
operations to unlock shareholder value and better position each
business to pursue its independent strategy and growth.
TECHNICAL INFORMATION
The Technical Information in this news release
has been reviewed and approved by Rene LeBlanc, PhD, SME, Chief
Technical Officer of Lithium Americas, and a Qualified Person as
defined by National Instrument 43-101.
FINANCIAL RESULTS
Selected consolidated financial information is
presented as follows:
(in US$ million except per share information) |
Quarter ended September 30, |
|
2022 |
|
2021 |
|
|
$ |
|
|
$ |
Expenses |
|
(25.3) |
|
|
(16.6) |
Net loss |
|
(40.9) |
|
|
(17.2) |
Loss per share – basic |
|
(0.30) |
|
|
(0.14) |
(in US$ million) |
As at September 30, 2022 |
|
As at December 31, 2021 |
|
|
$ |
|
|
$ |
Cash, cash equivalents and short-term bank deposits |
|
392.2 |
|
|
510.6 |
Total assets |
|
1,023.9 |
|
|
817.3 |
Total long-term liabilities |
|
(243.6) |
|
|
(272.8) |
During the nine months ended September 30, 2022,
total assets increased primarily due to the acquisition of
Millennial Lithium Corp., and investments in GT1 and Ascend
Elements. Total long-term liabilities decreased due to $12.8
million decrease in fair value of convertible senior notes
derivative liability and repayment of $24.7 million limited
recourse loan facility balance and accumulated interest.
The higher net loss in Q3 2022 compared to Q3
2021 is primarily attributable to $18.4 million loss on change in
fair value of convertible notes derivative driven by an increase in
market value of the Company’s shares during the three months ended
September 30, 2022, and $8.3 million share of loss of
Cauchari-Olaroz which was primarily related to foreign exchange
loss on the project’s loans and deferred taxes during the three
months ended September 30, 2022.
This news release
should be read in conjunction with Lithium Americas’ condensed
consolidated interim financial statements and management's
discussion and analysis for the nine months ended September 30,
2022, which are available on the Company’s website and SEDAR. All
amounts are in U.S. dollars unless otherwise indicated.
ABOUT LITHIUM AMERICAS
Lithium Americas is focused on advancing lithium
projects in Argentina and the United States to production. In
Argentina, Caucharí-Olaroz is advancing towards first production
and Pastos Grandes represents regional growth. In the United
States, Thacker Pass has received its Record of Decision and is
advancing towards construction. 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:Investor
RelationsTelephone: 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: successful
development of the Caucharí-Olaroz project, the Thacker Pass
project and the Pastos Grandes project, including timing, progress,
construction, milestones, scale, anticipated production and results
thereof; plans to prioritize commissioning and the expected timing
to complete deferred construction items such as the purification
process as a result of such prioritization; expected timing to
provide an update on the production ramp up schedule for the
Caucharí-Olaroz project; expectations that funding requirements for
Stage 1 of the Caucharí-Olaroz project will remain static,
including in light of inflationary and other economic conditions;
the Company’s ability to fund its development programs through debt
or equity financing, including through government loan programs,
and the expected outcome of debt or other financing strategies the
Company is pursuing, including the Advanced Technology Vehicles
Manufacturing loan program application; expectations concerning
timing for completion of a feasibility study for the Thacker Pass
project; that results from testing of the Thacker Pass flowsheet at
the Lithium Technical Center will be successful; expected timing
and outcome of litigation or regulatory processes concerning
permits for the Thacker Pass project; plans to advance an
integrated lithium chemical supply chain in North America in
cooperation with partners; the potential for partnership and
financing scenarios for the Thacker Pass project; and the proposed
separation of the Company’s business, its structure and completion
thereof.
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, the following: the
Company’s ability to fund, advance and develop its projects,
including results therefrom and timing thereof; capital costs,
operating costs, and sustaining capital requirements of the
Caucharí-Olaroz project and the Thacker Pass project, significant
increases to such estimates and ability to finance any such
increases; a cordial business relationship between the Company and
its strategic partners, including Ganfeng Lithium for the
Caucharí-Olaroz project; ability of the Company to secure
additional debt or equity funding as needed to advance its projects
uncertainties relating to maintaining mining, exploration,
environmental and other permits or approvals in Nevada and
Argentina, and the outcome of any litigation or regulatory
processes concerning such permits; realizing on the expected
benefits from transactions with existing partners; stable and
supportive legislative, regulatory and community environments in
the jurisdictions where the Company operates; demand for lithium,
including that such demand is supported by continued growth in the
electric vehicle market; the Company’s ability to produce battery
grade lithium products; the impact of increasing competition in the
lithium business, and the Company’s competitive position in the
industry; currency exchange and interest rates; general economic
conditions, including inflationary conditions and their impact on
the Company’s projects, contractors and suppliers; the feasibility
and costs of proposed project designs and plans; availability of
technology, including low carbon energy sources and water rights,
on acceptable terms to advance the Thacker Pass project; stability
and inflation of the Argentinian peso, including any foreign
exchange or capital controls which may be enacted in respect
thereof, and the effect of current or any additional regulations on
the Company’s operations; the impact of unknown financial
contingencies, including costs of litigation and regulatory
processes, on the Company’s operations; gains or losses, in each
case, if any, from short-term investments in Argentine bonds and
equities; estimates of and unpredictable changes to the market
prices for lithium products; technological advancements and
changes; estimates of mineral resources and mineral reserves,
including whether mineral resources will ever be developed into
mineral reserves; reliability of technical data; that pending
patent applications are approved; government regulation of mining
operations and M&A activity, and treatment under governmental,
regulatory and taxation regimes; accuracy of development budget and
construction estimates; expected benefits from investments made in
third parties; changes to the Company’s current and future business
plans and the strategic alternatives available to the Company; and
stock market and economic conditions generally.
Forward-looking information also involves known
and unknown risks that may cause actual results to differ
materially. These risks include, among others, inherent risks in
the development of capital intensive mineral projects (including as
co-owners), variations in mineral resources and mineral reserves,
changes in budget estimation, global demand for lithium, recovery
rates and lithium pricing, risks associated with successfully
securing adequate financing, including the outcome of the Company’s
loan application with the U.S. Department of Energy, 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, changes in public
perception concerning mining projects generally and opposition
thereto, political risk associated with foreign operations,
permitting risk, including receipt of new permits and maintenance
of existing permits, outcomes of litigation and regulatory
processes concerning the Company’s projects, title and access risk,
cost overruns, unpredictable weather and maintenance of natural
resources, risks associated with climate change and its impact on
the Company’s projects and operations, unanticipated delays,
intellectual property risks, currency and interest rate
fluctuations, operational risks, health and safety risks,
cybersecurity risks, economic conditions, and general market and
industry conditions. Additional risks, assumptions and other
factors are set out in the Company’s most recent annual management
discussion analysis and annual information form, copies of which
are available under the Company’s profile on SEDAR at www.sedar.com
and on the SEC website at www.sec.gov.
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 such forward-looking
information.
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