Lithium Americas Provides an Update on GM Investment
Lithium Americas (LAC) and General Motors (GM) have agreed to extend the deadline for GM's second tranche investment of $330 million in LAC's Thacker Pass project until the end of the year. This investment is part of a larger $650 million equity investment by GM to support the development of North America's largest known lithium resource. The companies are exploring alternative structures for the investment, with LAC agreeing to forbear making a unilateral election to close the second tranche until December 20, 2024. The investment is contingent on finalizing a $2.26 billion loan from the U.S. Department of Energy, which LAC expects to close by year-end. This partnership aims to develop a robust domestic lithium supply chain, with Thacker Pass targeting a total production capacity of 80,000 tonnes per annum of battery-grade lithium carbonate.
Lithium Americas (LAC) e General Motors (GM) hanno concordato di estendere la scadenza per il secondo investimento di GM di 330 milioni di dollari nel progetto Thacker Pass di LAC fino alla fine dell'anno. Questo investimento fa parte di un investimento azionario più ampio di 650 milioni di dollari da parte di GM per supportare lo sviluppo della più grande risorsa di litio conosciuta del Nord America. Le aziende stanno esplorando strutture alternative per l'investimento, con LAC che accetta di non effettuare un'elezione unilaterale per chiudere il secondo lotto fino al 20 dicembre 2024. L'investimento è subordinato alla finalizzazione di un prestito di 2,26 miliardi di dollari dal Dipartimento dell'Energia degli Stati Uniti, che LAC prevede di chiudere entro la fine dell'anno. Questa partnership mira a sviluppare una solida catena di approvvigionamento di litio domestico, con Thacker Pass che punta a una capacità di produzione totale di 80.000 tonnellate all'anno di carbonato di litio di grado batteria.
Lithium Americas (LAC) y General Motors (GM) han acordado extender la fecha límite para la segunda inversión de GM de 330 millones de dólares en el proyecto Thacker Pass de LAC hasta finales de año. Esta inversión es parte de una inversión de capital más grande de 650 millones de dólares por parte de GM para respaldar el desarrollo de la mayor fuente de litio conocida en América del Norte. Las empresas están explorando estructuras alternativas para la inversión, con LAC acordando abstenerse de hacer una elección unilateral para cerrar la segunda tranche hasta el 20 de diciembre de 2024. La inversión depende de la finalización de un préstamo de 2.26 mil millones de dólares del Departamento de Energía de los EE. UU., que LAC espera cerrar a finales de año. Esta asociación tiene como objetivo desarrollar una robusta cadena de suministro de litio nacional, con Thacker Pass apuntando a una capacidad de producción total de 80,000 toneladas anuales de carbonato de litio de grado batería.
리튬 아메리카스(LAC)와 제너럴 모터스(GM)가 LAC의 태커 패스 프로젝트에 대한 GM의 두 번째 3억 3천만 달러 투자 마감 기한을 연말까지 연장하기로 합의했습니다. 이 투자는 GM이 북미 최대의 알려진 리튬 자원의 개발을 지원하기 위해 6억 5천만 달러의 대규모 자본 투자 일부로 이루어진 것입니다. 두 회사는 투자를 위한 대안 구조를 탐색하고 있으며, LAC는 2024년 12월 20일까지 두 번째 투자 를 단독으로 종료하기 위한 결정을 보류하기로 합의했습니다. 이 투자는 미국 에너지부로부터 22억 6천만 달러의 대출이 최종화되는 것에 따라 달라지며, LAC는 이를 연말까지 마무리할 것으로 예상하고 있습니다. 이 파트너십은 강력한 국내 리튬 공급망을 개발하는 것을 목표로 하며, 태커 패스는 배터리급 리튬 탄산염의 연간 총 생산 능력을 8만 톤으로 목표로 하고 있습니다.
Lithium Americas (LAC) et General Motors (GM) ont convenu de prolonger la date limite pour le deuxième investissement de GM de 330 millions de dollars dans le projet Thacker Pass de LAC jusqu'à la fin de l'année. Cet investissement fait partie d'un investissement en actions plus large de 650 millions de dollars de GM pour soutenir le développement de la plus grande ressource de lithium connue en Amérique du Nord. Les entreprises explorent des structures alternatives pour l'investissement, LAC convenant de s'abstenir de faire un choix unilatéral pour clôturer la deuxième tranche jusqu'au 20 décembre 2024. L'investissement est conditionné à la finalisation d'un prêt de 2,26 milliards de dollars du Département de l'Énergie des États-Unis, que LAC espère finaliser d'ici la fin de l'année. Ce partenariat vise à développer une chaîne d'approvisionnement nationale robuste en lithium, avec Thacker Pass visant une capacité de production totale de 80 000 tonnes par an de carbonate de lithium de qualité batterie.
Lithium Americas (LAC) und General Motors (GM) haben vereinbart, die Frist für die zweite Tranche der Investition von GM in Höhe von 330 Millionen US-Dollar in das Thacker Pass-Projekt von LAC bis Ende des Jahres zu verlängern. Diese Investition ist Teil einer umfassenderen Eigenkapitalinvestition von 650 Millionen US-Dollar durch GM zur Unterstützung der Entwicklung der größten bekannten Lithiumressource Nordamerikas. Die Unternehmen erkunden alternative Strukturen für die Investition, wobei LAC zustimmt, bis zum 20. Dezember 2024 keine einseitige Wahl zur Schließung der zweiten Tranche zu treffen. Die Investition hängt von der Finalisierung eines Darlehens in Höhe von 2,26 Milliarden US-Dollar vom US-Energieministerium ab, dessen Abschluss LAC bis zum Jahresende erwartet. Diese Partnerschaft zielt darauf ab, eine robuste inländische Lithium-Lieferkette zu entwickeln, wobei Thacker Pass eine Gesamtkapazität von 80.000 Tonnen Batterie-Grad-Lithiumcarbonat pro Jahr anstrebt.
- GM reaffirmed its intention to complete the $330 million second tranche investment
- Thacker Pass is the largest known Measured and Indicated lithium resource in North America
- LAC is finalizing a $2.26 billion loan from the U.S. Department of Energy
- Thacker Pass targets a total production capacity of 80,000 tpa of battery-grade lithium carbonate
- Delay in closing the second tranche investment from GM
- Additional rights related to Phase 2 of Thacker Pass may be granted to GM if LAC elects to close the second tranche after December 20, 2024
Insights
The extension of GM's
The forbearance agreement until December 2024 is intriguing. It suggests LAC is confident in closing the deal this year but wants a safety net. This could be seen as prudent risk management or a sign of potential hurdles. The mention of "additional rights" for GM post-December 2024 adds another layer of complexity to the deal structure.
Overall, while the extension doesn't immediately impact LAC's finances, it underscores the critical nature of both the GM investment and DOE loan for Thacker Pass development. Investors should closely monitor progress towards year-end closure of these deals.
The reaffirmation of GM's commitment to invest in Lithium Americas signals strong confidence in the Thacker Pass project and its potential to bolster the North American lithium supply chain. This partnership aligns with the growing trend of automakers securing critical battery materials.
The extension and exploration of "alternative structures" for GM's investment suggest a dynamic negotiation process. This could potentially lead to more favorable terms for both parties, enhancing the long-term viability of the project. However, it also introduces an element of uncertainty that investors should be aware of.
The emphasis on Thacker Pass as the largest known lithium resource in North America underscores its strategic importance in the rapidly growing electric vehicle market. This positions LAC favorably in the competitive lithium sector, potentially attracting further interest from other major players in the automotive and energy storage industries.
The agreement to extend the investment timeline and explore alternative structures demonstrates flexibility in contract negotiations. This approach can be beneficial for both parties, allowing them to adapt to changing market conditions or regulatory requirements.
The inclusion of a forbearance clause until December 2024 is a significant legal provision. It protects LAC from potential default scenarios while providing GM with potential additional rights if the deal extends beyond this date. This balanced approach shows sophisticated legal structuring to manage risks and incentives for both parties.
The mention of "conditions precedent" tied to the DOE loan execution highlights the interconnected nature of these agreements. It's important for investors to understand that the GM investment is contingent on the DOE loan, creating a complex legal and financial framework that must be navigated carefully to bring the Thacker Pass project to fruition.
(All amounts in US$ unless otherwise indicated)
“Our relationship with GM has been built on collaboration and a mutual goal to develop a robust domestic lithium supply chain,” said Jonathan Evans, President and CEO of Lithium Americas. “We are fortunate to have GM’s partnership as we finalize the DOE Loan and GM investment prior to making the final investment decision later this year.”
During this time, the parties will explore alternative structures for GM’s additional investment in a mutually beneficial manner. As such, the Company has agreed to forbear making a unilateral election to close the second tranche investment until December 20, 2024, to provide time for such discussions to take place. GM’s investment is subject to the conditions precedent set forth in the second tranche subscription agreement, including the execution of the loan agreement for the
BACKGROUND
On January 30, 2023, Old LAC2 entered into a purchase agreement with GM, pursuant to which GM agreed to make a
As the Separation was completed before the closing of the Tranche 2 Investment, on October 3, 2023, the agreement for the Tranche 2 Investment in Old LAC was terminated and replaced by a corresponding subscription agreement between GM and the Company whereby the proceeds of the Tranche 2 Investment will be received by the Company.
1 Phase 2 is the second phase of production at Thacker Pass, targeting an additional 40,000 tonnes per annum (“tpa”) of battery-grade lithium carbonate, for total production capacity of 80,000 tpa.
2 Old LAC is now named Lithium Americas (Argentina) Corp., pursuant to a separation transaction that was undertaken on October 3, 2023 (the “Separation”), when the Company acquired ownership of Old LAC’s North American business assets and investments.
ABOUT LITHIUM AMERICAS
Lithium Americas is committed to responsibly developing the
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, expectations regarding completion of the Tranche 2 Investment and the DOE Loan; expectations regarding any alternative structures of the Tranche 2 Investment; the expected timetable for completing the Tranche 2 Investment; expectations related to the construction build, job creation and nameplate capacity 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 completion of the DOE Loan prior to the end of 2024 and the absence of material adverse events affecting the Company during this time; 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; as well as assumptions concerning general economic and industry growth rates, commodity prices, resource estimates, currency exchange and interest 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240829450634/en/
INVESTOR CONTACT
Virginia Morgan, VP, IR and ESG
+1-778-726-4070
ir@lithiumamericas.com
Source: Lithium Americas Corp.
FAQ
What is the total value of GM's equity investment in Lithium Americas (LAC)?
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