Lithium Americas Closes US$275 Million Underwritten Public Offering
- Lithium Americas successfully closed a US$275 million underwritten public offering by issuing 55,000,000 common shares at $5.00 per share.
- The net proceeds of $275,000,000 from the offering will be used to fund the advancement of construction and development of the Thacker Pass lithium project in Humboldt County, Nevada.
- The offering, combined with a U.S. Department of Energy loan and General Motors Holdings investment, will satisfy the funding condition for the GM second tranche investment.
- The company aims to de-risk construction execution by increasing detailed engineering and progressing procurement packages for the Thacker Pass project.
- Upon meeting closing conditions for the GM funding and DOE loan, Thacker Pass will move towards full construction to support America's energy security and emissions reduction goals.
- None.
Lithium Americas Corp's closure of a
From a financial perspective, the offering's success signals robust market appetite for investments in clean energy. The strategic partnership with an automotive giant like GM underscores the project's critical role in the electric vehicle (EV) sector. For stakeholders, the immediate impact is the dilution of existing shares, which could temper short-term share prices. However, the long-term prospects appear favorable given the increasing demand for lithium in EV batteries and energy storage solutions. The deal is also structured to meet conditions for additional financing, which aligns with strategic milestones and risk mitigation.
Examining the Thacker Pass project within the larger context of the lithium market, one observes a surge in demand tied to the EV revolution and energy storage growth. The project's advancement is not just a corporate milestone; it's a strategic move that aligns with U.S. goals for energy security and lowering emissions. Investors should be attuned to the project's potential to capture a significant share of the domestic lithium market.
However, it's important to be cognizant of the supply chain complexities and the environmental scrutiny associated with lithium extraction. While the project is poised to meet a market need, regulatory hurdles remain a potential risk factor. The sustainable development commitment by Lithium Americas addresses some environmental concerns and may enhance the project's social license to operate, which is increasingly important to socially responsible investors.
The contingent nature of the DOE Loan, pinned on technical, legal, environmental and financial conditions, introduces an element of uncertainty. While the Conditional Commitment from the DOE reflects a positive outlook, investors must consider the risk of unmet conditions or renegotiation of terms. The evolving legal landscape around environmental regulations and the necessary due diligence could impact timelines and additional funding tranches.
Moreover, the intersection of public and private financing highlights the importance of understanding governmental policy in energy investment. The eventual finalization of the DOE Loan could serve as a bellwether for future public investments in private sector green initiatives, thereby influencing broader market expectations for such collaborations.
(All amounts in US$ unless otherwise indicated)
VANCOUVER, British Columbia, April 22, 2024 (GLOBE NEWSWIRE) -- Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) (“Lithium Americas” or the “Company”) announced the closing of its previously announced underwritten public offering (the “Offering”) of its common shares (the “Common Shares”). The Company issued 55,000,000 Common Shares, issued at a price of
The net proceeds from the Offering are intended to be used to fund the advancement of construction and development of the Company’s Thacker Pass lithium project in Humboldt County, Nevada (“Thacker Pass”).
Jonathan Evans, President and Chief Executive Officer of Lithium Americas said, “We are pleased to have completed this key financing milestone, which together with the U.S. Department of Energy (“DOE”) loan under the Advanced Technology Vehicles Manufacturing Loan Program (the “Loan”), satisfies the funding condition to closing the General Motors Holdings LLC (“GM”) second tranche investment (the “Tranche 2 Investment”). At the same time, the Offering and GM funding will allow the Company to meet the financing-related condition relating to closing the DOE Loan conditional commitment (the “Conditional Commitment”). These financings are expected to fully fund Thacker Pass Phase 1 construction.”
Mr. Evans continued, “With site preparation for major earthworks completed, our focus is on de-risking construction execution by increasing detailed engineering and progressing procurement packages. Once the remaining closing conditions are met and the Tranche 2 Investment and the DOE Loan close, which we anticipate to occur later this year if conditions to finalization of the Loan are met, Thacker Pass will advance to full notice to proceed and major construction to support America's energy security and emissions reduction aspirations. Our team continues to focus on our commitment to sustainably develop Thacker Pass toward production."
For the DOE Loan, if finalized, it is possible that the terms of the finalized Loan agreement may change from the time of Conditional Commitment. While the Conditional Commitment indicates DOE’s intent to finance Thacker Pass, the Company must satisfy certain technical, legal, environmental and financial conditions before the DOE enters into definitive financing documents and funds the Loan.
ABOUT LITHIUM AMERICAS
The Company is a Canadian-based lithium resource company that owns
INVESTOR CONTACT
Virginia Morgan, VP, IR and ESG
+1-778-726-4070
ir@lithiumamericas.com
FORWARD-LOOKING INFORMATION
This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation, and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively referred to as “forward-looking information” (“FLI”)). All statements, other than statements of historical fact, are FLI and can be identified by the use of statements that include, but are not limited to, words, such as “anticipate,” “plan,” “continues,” “estimate,” “expect,” “may,” “will,” “projects,” “predict,” “proposes,” “potential,” “target,” “implement,” “scheduled,” “forecast,” “intend,” “would,” “could,” “might,” “should,” “believe” and similar terminology, or statements that certain actions, events or results “may,” “could,” “would,” “might” or “will” be taken, occur or be achieved. FLI in this news release includes, but is not limited to, statements related to the anticipated use of net proceeds of the Offering; the expected operations, financial results and condition of the Company; the Company’s future objectives and strategies to achieve those objectives, including the future prospects of the Company; the estimated cash flow, capitalization and adequacy thereof for the Company; the estimated costs of the development of Thacker Pass, including timing, progress, approach, continuity or change in plans, construction, commissioning, milestones, anticipated production and results thereof and expansion plans; expectations regarding accessing funding from the Tranche 2 Investment and the ATVM Loan Program; anticipated timing to resolve, and the expected outcome of, any complaints or claims made or that could be made concerning the permitting process in the United States for Thacker Pass; capital expenditures and programs; estimates, and any change in estimates, of the mineral resources and mineral reserves at Thacker Pass; development of mineral resources and mineral reserves; the expected benefits of the separation transaction undertaken by the Company to acquire ownership of the North American business assets of Lithium Americas Corp. (now named Lithium Americas (Argentina) Corp.) (the “Arrangement”) to, and resulting treatment of, shareholders and the Company; the anticipated effects of the Arrangement; information concerning the tax treatment of the Arrangement; government regulation of mining operations and treatment under governmental and taxation regimes; the future price of commodities, including lithium; the creation of a battery supply chain in the United States to support the electric vehicle market; the realization of mineral resources and mineral reserves estimates, including whether certain mineral resources will ever be developed into mineral reserves, and information and underlying assumptions related thereto; the timing and amount of future production; currency exchange and interest rates; the Company’s ability to raise capital; expected expenditures to be made by the Company on Thacker Pass; ability to produce high purity battery grade lithium products; 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 timing, cost, quantity, capacity and product quality of production at Thacker Pass; successful development of Thacker Pass, including successful results from the Company’s testing facility and third-party tests related thereto; capital costs, operating costs, sustaining capital requirements, after tax net present value and internal rate of return, payback period, sensitivity analyses, and net cash flows of Thacker Pass; the expected capital expenditures for the construction of Thacker Pass; anticipated job creation and workforce hub at Thacker Pass; the expectation that the project labor agreement with North America’s Building Trades Unions for construction of Thacker Pass will minimize construction risk, ensure availability of skilled labor, address the challenges associated with Thacker Pass’s remote location and be effective in prioritizing employment of local and regional skilled craft workers, including members of underrepresented communities; the Company’s commitment to sustainable development, minimizing the environmental impact at Thacker Pass and plans for phased reclamation during the life of mine; ability to achieve capital cost efficiencies; the Tranche 2 Investment and the potential for additional financing scenarios for Thacker Pass; the expected timetable for completing the Tranche 2 Investment; the ability of the Company to complete the Tranche 2 Investment on the terms and timeline anticipated, or at all; the receipt of required stock exchange and regulatory approvals and authorizations, and the securing of sufficient available funding to complete the development of Phase 1 of Thacker Pass as required for the Tranche 2 Investment; the expected benefits of the Tranche 2 Investment; as well as other statements with respect to management’s beliefs, plans, estimates and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts.
FLI involves known and unknown risks, assumptions and other factors that may cause actual results or performance to differ materially. FLI reflects the Company’s current views about future events, and while considered reasonable by the Company as of the date of this news release, are inherently subject to significant uncertainties and contingencies. Accordingly, there can be no certainty that they will accurately reflect actual results. Assumptions upon which such FLI is based include, without limitation, the ability to raise financing in a timely manner and on acceptable terms; the potential benefits of the Arrangement being realized; the risk of tax liabilities as a result of the Arrangement, and general business and economic uncertainties and adverse market conditions; the risk that the Arrangement may not be tax-free for income tax purposes and potential significant tax liabilities that the Company may be exposed to if the tax-deferred spinoff rules are not met; the risk of tax indemnity obligations owed by the Company to Lithium Argentina following the Arrangement becoming payable, including as a result of events outside of the Company’s control; uncertainties inherent to feasibility studies and mineral resource and mineral reserve estimates; 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 Company’s 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; current technological trends; the impact of increasing competition in the lithium business, and the Company’s competitive position in the industry; continuing support of local communities and the Fort McDermitt Paiute Shoshone Tribe for Thacker Pass; continuing constructive engagement with these and other stakeholders, and any expected benefits of such engagement; the stable and supportive legislative, regulatory and community environment in the jurisdictions where the Company operates; impacts of inflation, currency exchanges 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 Company’s operations; increased attention to environmental, social, governance and safety (“ESG-S”) and sustainability-related matters, risks related to the Company’s 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 anti-ESG-S 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; 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 Company’s permitting activities at Thacker Pass; availability of technology, including low carbon energy sources and water rights, on acceptable terms to advance Thacker Pass; the Company’s ability to obtain additional financing on satisfactory terms or at all, including the outcome of the ATVM Loan Program process; 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; the ability of the Company to satisfy all closing conditions for the Tranche 2 Investment and complete the Tranche 2 Investment in a timely manner; the impact of the Tranche 2 Investment on dilution of shareholders and on the trading prices for, and market for trading in, the securities of the Company; as well as assumptions concerning general economic and industry growth rates, commodity prices, currency exchange and interests rates and competitive conditions. Although the Company believes that the assumptions and expectations reflected in such FLI are reasonable, the Company can give no assurance that these assumptions and expectations will prove to be correct.
Readers are cautioned that the foregoing lists of factors are not exhaustive. There can be no assurance that FLI will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. As such, readers are cautioned not to place undue reliance on this information, and that this information may not be appropriate for any other purpose, including investment purposes. 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.
The FLI contained in this news release is expressly qualified by these cautionary statements. All FLI in this news release speaks as of the date of this news release. The Company does not undertake any obligation to update or revise any FLI, whether as a result of new information, future events or otherwise, except as required by law. Additional information about these assumptions and risks and uncertainties is contained in the Company’s filings with securities regulators, including the Company’s most recent Annual Report on Form 20-F and most recent management’s discussion and analysis for our most recently completed financial year and, if applicable, interim financial period, which are available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. All FLI contained in this news release is expressly qualified by the risk factors set out in the aforementioned documents.
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