Further details on the Transaction are reported in a joint release issued today by the Company and
TRANSACTION HIGHLIGHTS:
- The largest-ever investment by an automaker to produce battery raw materials, with
GM to become Lithium Americas’ largest shareholder. Lithium Americas to receive$650 million equity investment fromGM consisting of:$320 million first tranche investment for common shares representing 9.999% ofLithium Americas before separation; and$330 million second tranche investment, contemplated to be invested in the Company’sU.S. business following the separation of itsU.S. and Argentine businesses (the “Separation”).
- After the first tranche investment,
GM will receive exclusive access to Phase 1 production through a binding supply agreement and a Right of First Offer (“ROFO”) on Phase 2 production. - Investment supports the development of
Thacker Pass , the largest known lithium resource in theU.S. - Project estimated to supply lithium needed for up to one million electric vehicles (“EVs”) per year.
- Investment also supports the Company’s previously announced Separation by creating the foundation for an independent
U.S. business focused onThacker Pass and a North American lithium supply chain (“Lithium Americas (NewCo)”).
PROJECT HIGHLIGHTS:
- Advancing
Thacker Pass construction plan targeting 80,000 tonnes per annum (“tpa”) of battery-quality lithium carbonate (“Li2CO3”) production capacity in two phases of 40,000 tpa, respectively (“Phase 1” and “Phase 2”).- Phase 1 production expected to commence in the second half of 2026.
- Project life of 40 years (“LOM”) utilizing less than 25% of the current measured and indicated (“M&I”) mineral resource estimate.
- Proven and probable mineral reserves of 3.7 million tonnes (“Mt”) lithium carbonate equivalent (“LCE”) at an average grade of 3,160 parts per million lithium (“ppm Li”).
- M&I mineral resource estimate of 16.1 Mt LCE at an average grade of 2,070 ppm Li.
$5.7 billion net present value (“NPV”) at 8% discount and 21.4% internal rate of return (“IRR”), after-tax when using a price assumption of$24,000 per tonne (“/ t”) of Li2CO3.- Phase 1 and Phase 2 capital cost estimates of
$2.27 billion and$1.73 billion , respectively, are based on cost estimates from Q3 2022 and include a 13.1% contingency. - Awarded the Engineering, Procurement and Construction Management (“EPCM”) contract for the construction of
Thacker Pass toBechtel Corporation . Thacker Pass is expected to create 1,000 jobs during construction and 500 jobs during operations.
TRANSACTION DETAILS
STRATEGIC INVESTMENT
Following the Separation and the satisfaction of certain conditions,
OFFTAKE & INVESTOR RIGHTS AGREEMENT
As part of the Transaction,
- If (i) following the closing of Tranche 1 and prior to the completion or termination of Tranche 2,
GM owns any issued and outstanding LAC Shares, or (ii) following the completion or termination of Tranche 2,GM owns 10% or more of the issued and outstanding LAC Shares – the right to nominate an individual to serve on the Board of Directors ofLithium Americas ; - If (i) following the closing of Tranche 1 and prior to the completion or termination of Tranche 2,
GM owns any issued and outstanding LAC Shares, or (ii) following the completion or termination of Tranche 2,GM owns (i) 10% or more of the issued and outstanding LAC Shares or (ii) own 5% or more of the issued and outstanding LAC Shares and is a party to the Offtake Agreement (or a similar agreement withLithium Americas ) and does not have a nominee on the board of directors ofLithium Americas – the right to have a nonvoting observer attend allLithium Americas board meetings; and - Until the later of: (i) the Lock-up Outside Date, and (ii) the date on which
GM ceases to either (i) own 10% or more of the issued and outstanding LAC Shares, or (ii) owns 5% or more of the issued and outstanding LAC Shares and be a party to the Offtake Agreement (or a similar agreement withLithium Americas ) – the right to participate in any subsequent issuances ofLithium Americas securities to “top-up” its pro rata ownership ofLithium Americas .
In addition,
As previously announced in
TRANSACTION TERMS
Tranche 1 of the transaction will be structured through the initial issuance of 15,002,243 subscription receipts to
The parties will implement Tranche 2 either through the exercise of the Tranche 2 AEW or a purchase of shares under a second tranche subscription agreement (which would result in the automatic termination of the Tranche 2 AEW) that provides for the purchase
Completion of the Transaction remains subject to customary regulatory approvals, including approval of the TSX and NYSE, and other customary closing conditions.
A copy of the Purchase Agreement, the Offtake Agreement and the Investor Rights Agreement will be available on the Company’s page on SEDAR at www.sedar.com and on EDGAR at www.edgar.com.
ADVISORS AND COUNSEL
SEPARATION UPDATE
On
For more details about the Separation, please refer to Lithium Americas’ press release on
PROJECT UPDATE
Thacker Pass Feasibility Study results reflect operational and process improvements, including increased extraction rates from an optimized mine plan through new ore control strategy, an increase in sulfuric acid utilization by targeting illite clay with greater potential for increasing lithium extraction per tonne of sulfuric acid and increased crystallization steps to further remove magnesium impurities.
Other process and design improvements were made to further minimize the Project’s environmental impact, including, increased capacity to 80,000 tpa within approximately the same mining footprint as the permitted pit boundary and without increasing the size of the sulfuric acid plant, additional beneficiation and neutralization circuits to increase the neutrality of filter pressed tailings and implementing a tail gas scrubber utilizing a neutralization solution in the sulfuric acid plant to minimize emissions and reduce impacts to ambient air quality.
FEASIBILITY STUDY SUMMARY1
Scenarios | Year 1-25 | 40 Years LOM | ||
Design production capacity | 80,000 tpa Li2CO3 (Phase 1 - 40,000 tpa) | |||
Mining method | Continuous open-pit mining | |||
Processing method | Sulfuric acid leaching | |||
Mineral reserves | 3.7 Mt LCE at a grade of 3,160 ppm Li | |||
Period | 25 years | 40 years | ||
Lithium carbonate price2 | ||||
Initial capital costs – Phase 1 | ||||
Initial capital costs – Phase 2 | ||||
Sustaining capital costs | ||||
Operating Costs (average) | ||||
Average Annual EBITDA (per year) | ||||
After-tax NPV @ 8% Discount Rate | ||||
After-tax IRR | 21.2 | % | 21.4 | % |
CONSTRUCTION TIMELINE
Phase 1 will consist of a single sulfuric acid plant with a nominal production rate of 3,000 tonnes per day (“tpd”) sulfuric acid. Phase 2 construction will begin upon completion of Phase 1, with the addition of a second sulfuric acid plant with an additional nominal production rate of 3,000 tpd.
Total designed capacity of 80,000 tpa Li2CO3 production upon completion of both Phase 1 and Phase 2. Actual production varies by year with anticipated average production of approximately 70,000 tpa Li2CO3 in the first 25 years and approximately 67,000 tpa over LOM, including ramp up of Phase 1 and Phase 2.
The Company continues to prepare for construction while we await a ruling for the appeal of the issuance of the ROD following a hearing held by the
CAPITAL COST ESTIMATE
The initial capital cost estimate covers early-works, mine development, mining, the process plant, the off-site transload facility, commissioning and all associated infrastructure.
The capital cost estimates include a 13.1% contingency. The Phase 2 estimate is derived from the Phase 1 estimate and the lower Phase 2 estimated capital costs are a result of mine development, infrastructure and transload facility synergies.
Initial Capital Costs ($ millions) | Phase 1 Costs | Phase 2 Costs | ||
Mine | $ | 58 | $ | 30 |
Process Plant and Infrastructure | $ | 1,963 | $ | 1,582 |
Offsite – Transload Facility | $ | 78 | $ | 31 |
Owner's Costs | $ | 169 | $ | 86 |
Total Initial Capital Costs | $ | 2,268 | $ | 1,729 |
In addition to the initial capital costs,
Sustaining capital costs include replacement costs for mining equipment, process plant equipment, and expansions of storage facilities and infrastructure.
OPERATING COST ESTIMATE
Operating costs in each area include labor, maintenance materials and supplies, raw materials, and outside services, among others. Reagents account for approximately 63% of LOM total operating costs for the process plant and the sulfuric acid plant. Primary reagents include liquid sulfur, limestone, soda ash, flocculant and quicklime.
Year 1-25 | 40 Years LOM | |||||||
$ per tonne Li2CO3 | % of Total | $ per tonne Li2CO3 | % of Total | |||||
Mine | $ | 1,026 | 15 | % | $ | 1,144 | 16 | % |
Lithium Process Plant | $ | 3,088 | 46 | % | $ | 3,213 | 45 | % |
Liquid Sulfuric Acid Plant | $ | 2,424 | 36 | % | $ | 2,627 | 36 | % |
General & Administrative | $ | 205 | 3 | % | $ | 215 | 3 | % |
Total Operating Costs | $ | 6,743 | 100 | % | $ | 7,198 | 100 | % |
MINERAL RESOURCE ESTIMATE
Thacker Pass Mineral Resource Estimate as of
Category | Tonnage (Mt) | Average Li (ppm) | Lithium Carbonate Equivalent (Mt) |
Measured | 534.7 | 2,450 | 7.0 |
Indicated | 922.5 | 1,850 | 9.1 |
Total Measured & Indicated | 1,457.2 | 2,070 | 16.1 |
Inferred | 297.2 | 1,870 | 3.0 |
Notes for the
- The Qualified Person who supervised the preparation of and approved disclosure for the estimate is
Benson Chow , P.G., SME-RM. - Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Mineral Resources are inclusive of 217.3 million metric tonnes (Mt) of Mineral Reserves.
- Mineral Resources are reported using an economic break-even formula: “Operating Cost per Resource Tonne”/“Price per Recovered Tonne Lithium” * 10^6 = ppm Li Cutoff. “Operating Cost per Resource Tonne” =
US$88.50 , “Price per Recovered Tonne Lithium” is estimated: (“Lithium Carbonate Equivalent (LCE) Price” * 5.323 *(1 – “Royalties”) * “Recovery”. Variables are “LCE Price” =US$22,000 /tonne Li2CO3, “Royalties” = 1.75% and “Recovery” = 73.5%. - Presented at a cutoff grade of 1,047 ppm Li.
- A resource constraining pit shell has been derived from performing a pit optimization estimation using
Vulcan software. - The conversion factor for lithium to LCE is 5.323.
- Applied density for the mineralization is 1.79 t/m3.
- Measured Mineral Resources are in blocks estimated using at least six drill holes and eighteen samples within a 262 m search radius in the horizontal plane and 5 m in the vertical direction; Indicated Mineral Resources are in blocks estimated using at least two drill holes and six to eighteen samples within a 483 m search radius in the horizontal plane and 5 m in the vertical direction; and Inferred Mineral Resources are blocks estimated with at least two drill holes and three to six samples within a search radius of 722 m in the horizontal plane and 5 m in the vertical plane.
- Tonnages and grades have been rounded to accuracy levels deemed appropriate by the QP. Summation errors due to rounding may exist.
MINERAL RESERVE ESTIMATE
Thacker Pass Mineral Reserve Estimate as of
Category | Tonnage (Mt) | Average Li (ppm) | Lithium Carbonate Equivalent (Mt) |
Proven | 192.9 | 3,180 | 3.3 |
Probable | 24.4 | 3,010 | 0.4 |
Total Proven and Probable | 217.3 | 3,160 | 3.7 |
Notes for the
- The Qualified Person who supervised the preparation of and approved disclosure for the estimate is Kevin Bahe, P.E., SME-RM.
- Mineral Reserves have been converted from measured and indicated Mineral Resources within the feasibility study and have demonstrated economic viability.
- Reserves presented at an 85% maximum ash content and 1.533 kilogram of lithium recovered per run of mine feed cutoff grade. A sales price of
$5,400 US$ /t of Li2CO3 was utilized in the pit optimization resulting in the generation of the reserve pit shell in 2019. Overall slope of 27 degrees was applied. For bedrock material pit slope was set at 47 degrees. Mining and processing cost of$57.80 per tonne of ROM feed, a processing recovery factor of 84%, and royalty cost of 1.75% were additional inputs into the pit optimization. - A LOM plan was developed based on equipment selection, equipment rates, labor rates, and plant feed and reagent parameters. All Mineral Reserves are within the LOM plan. The LOM plan is the basis for the economic assessment within the NI 43-101 technical report titled “Feasibility Study, National Instrument 43-101 Technical Report for the Thacker Pass Project
Humboldt County, Nevada , USA” with an effective date ofNovember 2, 2022 (the “Technical Report”), which is used to show economic viability of the Mineral Reserves. - Applied density for the ore is 1.79 t/m3.
- Lithium Carbonate Equivalent is based on in-situ LCE tonnes with 95% recovery factor.
- Tonnages and grades have been rounded to accuracy levels deemed appropriate by the QP. Summation errors due to rounding may exist.
- The reference point at which the Mineral Reserves are defined is at the point where the ore is delivered to the run-of-mine feeder.
Please refer to the Technical Report for full details on the geology, mining, processing and infrastructure of Thacker Pass.
MINERAL RESERVE ESTIMATE METHODOLOGY
The Mineral Reserves estimate in the Technical Report is based on current knowledge, engineering constraints and permit status. A qualified person, as defined under NI 43-101 (“QP”), has reviewed and verified the Mineral Reserve estimate (the “Mineral Reserves QP”), and is of the opinion that the methodology for estimation of Mineral Reserves in the Technical Report is in general accordance with the 2019 CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines, and using the definitions in 2014 CIM Definition Standards for the classification of Mineral Reserves. Large changes in the market pricing, commodity price assumptions, material density factor assumptions, future geotechnical evaluations, cost estimates or metallurgical recovery could affect the pit optimization parameters and therefore the cutoff grades and estimates of Mineral Reserves.
MINERAL RESOURCE ESTIMATE METHODOLOGY
A QP has reviewed and verified the Mineral Resources estimate (the “Mineral Resources QP”) and is of the opinion that the Mineral Resource estimation methodology is in general accordance with the 2019 CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines and uses the definitions in 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves for the classification of Mineral Resources. Potential risk factors that could affect the Mineral Resource estimates include but are not limited to large changes in the market pricing, commodity price assumptions, material density factor assumptions, future geotechnical evaluations, metallurgical recovery assumptions, mining and processing cost assumptions, and other cost estimates could affect the pit optimization parameters and therefore the cutoff grades and Mineral Resource estimates.
QUALITY ASSURANCE AND QUALITY CONTROL
MINERAL RESOURCES
Sample names, certificate identifications, and run identifications were cross referenced with the laboratory certificates and sample assay datasheet for spot checking and verification of data. No data anomalies were discovered during this check.
Quality Assurance / Quality Control (QA/QC) methodology utilized by
Geologic logs, Access databases, and Excel spreadsheets were provided to the Mineral Resources QP for cross validation with the Excel lithological description file. Spot checks between Excel lithological description sheets were performed against the source data with no inconsistencies found with the geologic unit descriptions.
Verification of the block model was performed by the creation of a geostatistical model and the review of its various outputs. Histograms, HERCO grade tonnage curves, and swath plots were created and analyzed to validate the accuracy of the block model.
Based on the various reviews, validation exercises and remedies outlined above, the Mineral Resources QP concluded that the data is adequate for use for Mineral Resource estimation.
MINERAL RESERVES
The Mineral Reserves QP reviewed the following as part of the mine planning, cost model and Mineral Reserves data verification.
- Geotechnical: slope stability study completed by BARR Engineering in 2019 was reviewed.
Mining Method : open-pit mining with limited blasting has been reviewed and assessed with geotechnical reports.- Pit Optimization: the pit limits were established based on the Environmental Impact Statement pit extents and physical features. The final pit shell was verified to provide a positive economic value.
- Mine Design: ramp, bench and face angle parameters were validated by geotechnical reports.
- Production Schedule: the production schedule was validated based on reasonability.
- Labor and Equipment: estimations for equipment sizes, capacity, availability and utilization were reviewed for reasonability.
- Economic Model: model was reviewed and demonstrated economic viability for the project.
- Facilities and Materials: facilities and materials located within the reserve pit boundary will be re-located when access to those areas are required during mining.
QUALIFIED PERSON
The scientific and technical information contained in this news release has been derived from the Technical Report and has been reviewed and approved by Rene LeBlanc, RM-SME, Chief Technical Officer of the Company, a QP as defined under NI 43-101.
Further information about Thacker Pass, including a description of the key assumptions, parameters, sampling methods, data verification and QA/QC programs, methods relating to Mineral Resources and Mineral Reserves and factors that may affect those estimates are contained in the Technical Report which will be made available under the Company’s profile on SEDAR and on the Company’s website.
Other than as described in the Company’s continuous disclosure documents, there are no known legal, political, environmental or other risks that could materially affect the potential development of the Mineral Reserves and Mineral Resources at this point in time.
NATIONAL INSTRUMENT 43-101 DISCLOSURE
A NI 43-101 Technical Report will be prepared on the results of the updated Feasibility Study by the Qualified Persons and will be filed on SEDAR within 45 days of this news release.
Readers are cautioned that the conclusions, projections and estimates set out in this news release are subject to important qualifications, assumptions and exclusions, all of which will be detailed in the Technical Report. To fully understand the summary information set out above, the Technical Report that will be filed on SEDAR at www.sedar.com should be read in its entirety.
CONFERENCE CALL
To register for the webcast, link here: https://events.q4inc.com/attendee/888987622.
To register for the dial-in numbers, link here: https://conferencingportals.com/event/PTZkmgFQ.
A replay of the webcast will be available until
ABOUT
For further information contact:
Investor Relations
Telephone: 778-656-5820
Email: ir@lithiumamericas.com
Website: www.lithiumamericas.com
FORWARD-LOOKING INFORMATION
This news release contains certain forward-looking information, including information with respect to the anticipated use of proceeds from the Transaction, the rights to be provided to
Forward-looking information involves information about the future and is inherently uncertain, and actual results, performance or achievements of
Lithium Americas’ forward-looking information is based on the beliefs, expectations and opinions of management on the date such information is posted, and
This news release also contains forward-looking information related to the mineral resource and mineral reserve estimates for the Thacker Pass Deposit and the information in this news release should be qualified in its entirety based on the information in the Technical Report. The material factors that could cause actual results to differ from the conclusions, estimates, designs, forecasts or projections include geological modeling, grade interpolations, lithium price estimates, mining cost estimates, mine design parameters, and final pit shell limits such as more detailed exploration drilling or final pit slope angle.
NON-GAAP FINANCIAL MEASURES
This news release includes disclosure of certain non-GAAP financial measures, including expected average annual EBITDA with respect to the results of the Feasibility Study for Thacker Pass presented in this news release. Such measures have no standardized meaning under IFRS and may not be comparable to similar measures used by other issuers. The Company believes that these measures provide investors with an improved ability to evaluate the prospects of the Company and, in particular, Thacker Pass. As Thacker Pass is not in production, the prospective non-GAAP financial measures presented may not be reconciled to the nearest comparable measure under IFRS and the equivalent historical non-GAAP financial measure for the prospective non-GAAP financial measure discussed herein is nil$.
__________________________
1 The economic analysis is based on Q3 2022 pricing for capital and operating costs.
2 Based on Q3 2022 long-term lithium carbonate price outlook from a leading industry market consultant.
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/14b7003d-427a-4b0b-932b-c2e9208c1c6c
Thacker Pass Construction Timeline
Phase 1 production expected to commence in second half of 2026.
2023 GlobeNewswire, Inc., source