Lithium Americas Reports 2021 Full Year and Fourth Quarter Results

Rhea-AI Summary

Lithium Americas Corp. (TSX: LAC, NYSE: LAC) reported its fourth-quarter and annual financial results for 2021. Construction of the Caucharí-Olaroz project is 85% complete, with commissioning expected in H2 2022. Total capital costs have risen to $741 million, reflecting increased manpower and inflationary pressures. The company acquired Millennial Lithium Corp. for $390 million, expanding its operations in Argentina. As of December 31, 2021, the company reported $511 million in cash, with a net loss of $38.5 million for 2021. Key environmental permits for the Thacker Pass project were issued in early 2022.

Positive

• Caucharí-Olaroz project is 85% complete, with commissioning set for H2 2022.
• Acquired Millennial Lithium Corp. and Pastos Grandes for approximately $390 million, enhancing project portfolio.
• Environmental permits for Thacker Pass issued, allowing progression towards construction.

Negative

• Total capital cost estimates for Caucharí-Olaroz rose 16% to $741 million.
• Net loss increased to $38.5 million in 2021, driven by higher expenditures, particularly for Thacker Pass.

VANCOUVER, British Columbia, March 17, 2022 (GLOBE NEWSWIRE) -- Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) (“Lithium Americas” or the “Company”) has reported financial and operating results for the fourth quarter and year ended December 31, 2021.

HIGHLIGHTS

Argentina

Caucharí-Olaroz

• Construction continues to advance with a revised timeline; currently the project is approximately 85% complete and commissioning is targeted to commence in H2 2022.
  • 1,500 workers are on site with 100% of the workforce having received at least two doses of a COVID-19 vaccine.
  • Around the end of 2021, construction activities were impacted by COVID-19 Omicron disruptions impacting supply chains and availability of the main contractor. Activities have returned to normal and the Company continues to monitor the situation closely.
  • Additional resources have been added to accelerate and de-risk commissioning and ramp-up timeline.
• Total capital cost estimates have been revised to $741 million (on a 100% basis), up 16% from $641 million, to reflect additional resources and manpower, engineering modifications and inflationary cost pressures.
  • As of December 31, 2021, 76%, or $565 million, of the $741 million budget has been spent.
• Progress on the second stage expansion of at least 20,000 tonnes per annum (“tpa”) of lithium carbonate equivalent (“LCE”) continues to advance with additions to the technical leadership team and drilling program underway.
  

Pastos Grandes

• In January 2022, the Company completed the acquisition of Millennial Lithium Corp. and the 100% owned Pastos Grandes for total consideration of approximately $390 million.
• In February 2022, the Company hired Carlos Galli as Senior Director, Project Development, Latin America, to oversee the development planning for Pastos Grandes and integration and expansion of a team of over 50 workers based in Salta, Argentina.

Arena Minerals

• In November 2021, the Company increased its strategic investment in Arena Minerals Inc. (TSX-V: AN) to approximately 17.4% for $10 million.
  

United States

Thacker Pass

• In October 2021, Measured and Indicated (“M&I”) Resource estimates were updated to 13.7 million tonnes (“Mt”) LCE at 2,231 parts per million lithium (“ppm Li”). See the Company’s news release dated October 7, 2021 for full details.
• The Company continues to advance the Feasibility Study with an increased targeted capacity of 40,000 tpa lithium carbonate and incorporating a second phase expansion to reach a targeted total capacity of 80,000 tpa lithium carbonate. Results of the Feasibility Study are expected in H2 2022.
• The Company is continuing to optimize engineering to complete capital and operating estimates. Capital costs are expected to substantially increase due to the incorporation of increased scale, additional processing and related infrastructure changes, and the results of engineering and testing, as well as to account for external factors such as inflationary pressures and supply chain considerations
• The Lithium Technical Development Center is expected to be operational in Q2 2022 to support ongoing optimization work and to provide product samples for potential customers and partners.
• In February 2022, the Nevada Department of Environmental Protection (“NDEP”) issued the final key state-level environmental permits: Water Pollution Control Permit, Class II Air Quality Operating Permit and Exploration and Mine Reclamation Permits.
• An appeal on the Record of Decision continues to advance through Federal court process with a ruling expected in Q3 2022.
• In February 2022, the Company announced that it submitted a draft application to the US Department of Energy for funding to be used at Thacker Pass through the Advanced Technologies Vehicle Manufacturing Loan Program.
• Discussions continue with potential strategic partners and customers.

Corporate

• As at December 31, 2021, the Company had $511 million in cash and cash equivalents with an additional $75 million in available credit.
• In December 2021, the Company completed a convertible senior note offering of $259 million at 1.75% due in 2027. Net proceeds were primarily used to repay the $205 million senior secured credit facility and remove security over Thacker Pass, and to repay in early 2022 $25 million outstanding on its subordinate loan facility.
• In January 2022, the Company began to work with IRMA (Initiative for Responsible Mining Assurance) to pilot their new draft IRMA-Ready Standard for Responsible Mineral Exploration and Development.
• In February 2022, Richard Gerspacher joined as Senior Vice President Capital Projects to oversee execution of the Company’s development projects. Most recently, Mr. Gerspacher served as Vice President and Projects Director for Fluor Corporation leading the development of an advanced stage lithium chemical project in Australia.
• In February 2022, the Company commenced the process to explore a separation of its US and Argentina operations, through the creation of a standalone public company focused on the development of Thacker Pass.
  

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)	Year ended December 31,
	2021			2020
	$			$
Expenses		(46.1)			(30.6)
Net loss		(38.5)			(36.2)
(Loss)/income per share – basic		(0.32)			(0.39)

(in US$ million)	As at December 31, 2021			As at December 31, 2020
	$			$
Cash and cash equivalents		510.6			148.1
Total assets		817.3			326.7
Total long-term liabilities		(272.8)			(127.3)

During the year ended December 31, 2021, total assets and cash increased primarily due to the $377.4 million net proceeds raised from the underwritten public offering of common shares, partially offset by expenditures in the period. Total long-term liabilities increased primarily due to drawdowns on the Company’s $205 million senior credit facility and the $250 million in net proceeds raised from the convertible senior notes, which was used to fully repay the $205 million senior credit facility at the end of 2021.

The higher net loss in 2021 compared to 2020 is primarily attributable to higher Thacker Pass expenditures.

This news release should be read in conjunction with Lithium Americas’ consolidated financial statements and management's discussion and analysis for the year ended December 31, 2021, 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 Relations
Telephone: 778-656-5820
Email: ir@lithiumamericas.com
Website: 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 and the Thacker Pass project, including timing, progress, construction, milestones, expansion plans, scale, anticipated production and results thereof; expectations and anticipated impact of COVID-19 on the Company and its projects; timing for commissioning, and plans to accelerate the commissioning and timeline for the Caucharí-Olaroz project; estimates of capital and operating expenditures and substantial changes thereto for any project, including factors expected to contribute to such changes; the Company’s ability to fund its development programs through debt or equity financing, including through government loan programs; timing, capacity, expansion plans, completion of a feasibility study and sufficiency of water rights for the Thacker Pass project; Company expectations as to timing for technical development center operations for Thacker Pass, the outcome of such operations and production of samples; government regulation of mining operations and treatment under governmental and taxation regimes; expected timing and outcome of litigation or regulatory processes concerning the Thacker Pass project; the estimated amount and grade of mineral resources for the Thacker Pass project; expected outcome and timing of environmental surveys and analysis, permit applications and other environmental matters; expected environmental impacts of the Company’s projects; expected expenditures to be made by the Company on its properties; the timing, cost, quantity, capacity, product quality of production and sufficiency of brine inventory of the Caucharí-Olaroz project, which is held and operated through an entity in Argentina co-owned by the Company, Ganfeng Lithium Co. Ltd. (“Ganfeng”) and Jujuy Energia y Mineria Sociedad del Estado (JEMSE); successful operation of the Caucharí-Olaroz project under the co-ownership structure, and expectations concerning proposed expansion plans for the project; results of the Company’s engineering, design and permitting program at the Thacker Pass project, including the Company meeting deadlines and receiving and maintaining permits as anticipated; the Company’s share of the expected capital expenditures for the construction of the Caucharí-Olaroz project; expected benefits of acquisitions and investments in third parties made by the Company; the potential for partnership and financing scenarios for the Thacker Pass project; and the proposed separation of the Company’s business, the completion thereof and its structure.

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: current technological trends; a cordial business relationship between the Company and Ganfeng for the Caucharí-Olaroz project; ability of the Company to fund, advance and develop the Caucharí-Olaroz project and the Thacker Pass project, and raise additional capital as needed; the Company’s ability to operate in a safe and effective manner; uncertainties relating to receiving and maintaining mining, exploration, environmental and other permits or approvals in Nevada and Argentina, and resolving any complaints or litigation concerning such environmental permitting processes; realizing on the expected benefits from previous transactions with existing or new partners, or for debt financing; demand for lithium, including that such demand is supported by growth in the electric vehicle market; the Company’s ability to produce high purity battery grade lithium products; the impact of increasing competition in the lithium business, and LAC’s competitive position in the industry; currency exchange and interest rates; general economic conditions; stable and supportive legislative, regulatory and community environments in the jurisdictions where the Company operates; 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; exploration, development and construction costs for the Caucharí-Olaroz project and the Thacker Pass project; the timing, cost, quantity, capacity and product quality of production at the Thacker Pass project, and any expansion scenario; successful results from the Company’s testing facility and third-party tests related thereto for the Thacker Pass project; capital costs, operating costs, and sustaining capital requirements of the Caucharí-Olaroz project and the Thacker Pass project; 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; anticipated timing and results of exploration, development and construction activities, including the impact of COVID-19 on such timing; timely responses from governmental agencies responsible for reviewing and considering the Company’s permitting activities at the Thacker Pass project; the Company’s ability to obtain additional financing to fund the development of its projects, including pursuant to government loan applications; the ability to develop and achieve production at any of the Company’s mineral exploration and development properties; the impact of COVID-19 on the Company’s operations, timelines and budgets; that pending patent applications are approved; the Company’s anticipated ownership interest in holdings of shares, warrants and other securities issued by third parties; accuracy of development budget and construction estimates; preparation of a development plan and feasibility study for lithium production at the Thacker Pass project; changes to the Company’s current and future business plans and the strategic alternatives available to the Company; and general economic and stock market conditions.

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, 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, 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.

FAQ

What are the latest updates from Lithium Americas Corp. regarding project development?

Lithium Americas has reported that the Caucharí-Olaroz project is 85% complete, with commissioning expected in H2 2022.

What is the net loss reported by Lithium Americas for 2021?

The company reported a net loss of $38.5 million for the year ended December 31, 2021.

How much did Lithium Americas spend on the Caucharí-Olaroz project?

Total capital cost estimates for the Caucharí-Olaroz project increased to $741 million.

What acquisitions did Lithium Americas complete recently?

The company acquired Millennial Lithium Corp. for approximately $390 million, expanding its operations.

What financial position did Lithium Americas hold at the end of 2021?

As of December 31, 2021, Lithium Americas had $511 million in cash and cash equivalents.