Unlocking Thacker Pass: General Motors to Contribute Combined $625 Million in Cash and Letters of Credit to New Joint Venture with Lithium Americas
(All amounts in US$ unless otherwise indicated)
Under the terms of the Investment Agreement,
TRANSACTION HIGHLIGHTS
-
Largest ever publicly announced investment by a
U.S. OEM in a lithium carbonate project highlights the strategic importance ofThacker Pass in creating a domestic supply chain for critical minerals. -
Allows
Lithium Americas to secure$625 million in cash and letters of credit, while avoiding common equity dilution associated with Tranche 2. -
Builds upon an already strong relationship with
GM as strategic investor and extends Phase 1 offtake to 20 years.
The JV Transaction is incremental to GM’s
“Our relationship with
“We’re pleased with the significant progress
JV TRANSACTION DETAILS
The key terms of the JV Transaction are summarized below:
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Lithium Americas will have a 62% interest inThacker Pass and will manage the Project (the “Manager”) on behalf ofLithium Americas andGM (together the “JV Partners ”). -
GM will have a 38% interest inThacker Pass and commit$625 million in cash and letters of credit to the JV:$330 million cash to be contributed on the date of the JV closing;$100 million cash to be contributed at Final Investment Decision (“FID”) for Phase 1; and$195 million LC Facility prior to first draw on the$2.3 billion DOE Loan.
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Lithium Americas will contribute$387 million of funding to the JV for its 62% ownership in the Project:$211 million (with expenditures on capex afterAugust 2024 being credited against and reducing this amount, along with other adjustments) to be contributed on the date of the JV closing; and- The remainder to be contributed upon FID for Phase 1.
-
As of
June 30, 2024 ,Lithium Americas had approximately$376 million in cash and cash equivalents.
-
LC Facility provided by
GM to the JV as part of its consideration for its equity interest will have no interest and a maturity consistent with DOE Loan requirement that will be withdrawn once replaced with cash that is generated byThacker Pass . - Board of Directors to be established at the JV level to oversee the JV and approve the Project’s budgets and business plans, and implement policies to align with GM’s vendor requirements, including GM’s Human Rights Policy.
-
Upon closing of the JV Transaction,
GM will also enter into an additional 20-year offtake agreement for up to 38% of production volumes from Phase 2 ofThacker Pass and will retain its right of first offer on the remaining balance of Phase 2 volumes.
GM’s
BACKGROUND
In
2023
On
As the Separation was completed before the closing of Tranche 2, on
On
THACKER PASS PROJECT UPDATE
The Company continues to focus on de-risking project execution by advancing detailed engineering, project planning and procurement packages.
- Detailed engineering continues to progress in advance of issuing full notice to proceed, currently at approximately 40% design complete.
- Site preparation for major earthworks has been completed and the process plant area is currently being excavated (approximately 50% complete) to prepare for concrete placement, forecasted to begin by mid-2025.
- Procurement packages for the top seven pieces of long-lead equipment have been awarded. Contracts for key construction materials have been awarded and field purchases of goods and services have commenced.
- Major earth works for the all-inclusive housing facility for construction workers (the Workforce Hub) are completed. The current focus is on finalizing engineering and permitting for utilities and preparing to award contracts for the detailed earthworks, foundation installation and erection of the housing units.
To date, the Company has achieved over one million work hours without a lost time injury.
NEXT STEPS
The Company continues to work closely with the
ADVISORS
TECHNICAL INFORMATION
The scientific and technical information in this news release has been reviewed and approved by
ABOUT
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 JV Transaction and the DOE Loan; the expected timetable for completing JV Transaction and the DOE Loan; anticipated timing for FID; expectation about the extent that the JV Transaction, DOE Loan, and cash on hand would fund the development and construction of
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 JV Transaction and DOE Loan prior to the end of 2024, or at all, 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 JV Transaction and the DOE Loan in a timely manner; expectations regarding the Company's financial resources and future prospects; the ability to meet future objectives and priorities; a cordial business relationship between the Company and third party strategic and contractual partners; general business and economic uncertainties and adverse market conditions; the availability of equipment and facilities necessary to complete development and construction at the Project; unforeseen technological and engineering problems; political factors, including the impact of the 2024 U.S. presidential election on, among other things, the extractive resource industry, the green energy transition and the electric vehicle market; uncertainties inherent to feasibility studies and mineral resource and mineral reserve estimates; uncertainties relating to receiving and maintaining mining, exploration, environmental and other permits or approvals in
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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1 Phase 1 is the initial phase of production at
2 See the section titled Background –
3 See the section titled Background – 2023
4 Phase 2 is the second phase of production at
5 Old LAC is now named Lithium Americas (Argentina) Corp., pursuant to a separation transaction that was undertaken on
View source version on businesswire.com: https://www.businesswire.com/news/home/20241016466651/en/
INVESTOR CONTACT
+1-778-726-4070
ir@lithiumamericas.com
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