Lithium Americas (Argentina) Corp. (“
Lithium
Argentina,” the “
Company,” or
“
LAAC”) (
TSX: LAAC)
(
NYSE: LAAC), today announced second quarter
results.
“We are very pleased with the ramp up progress
that has been made at Caucharí-Olaroz in recent months,” commented
Sam Pigott, President and CEO. “The operation is achieving around
70% capacity on a sustained basis and has hit record monthly
production in each of the last three months. Furthermore, the
project has demonstrated it can operate at near design capacity
with gradual improvements to quality We are prioritizing consistent
production volumes at these higher rates which should continue to
bring down costs. These operational efforts, coupled with effective
cost management through disciplined spending, optimized working
capital, and a strong financial position are crucial to ensuring
our success today and in the future.”
Mr. Pigott continued by saying, “I am incredibly
proud of our hardworking and dedicated team at our lithium
operation in Argentina and our team in North America. Their
commitment and expertise have been instrumental in achieving our
goals and navigating challenges in an efficient manner. Argentina’s
improving financial outlook and efforts to promote foreign
investment should serve as a supportive backdrop as we continue
progressing the ramp-up of the battery quality plant at
Cauchari-Olaroz to become one of the largest sources of lithium
carbonate globally.”
Highlights
Operational Highlights at Caucharí-Olaroz
- During the three months ended June
30, 2024, Caucharí-Olaroz produced approximately 5,600 tonnes of
lithium carbonate, up 24% from the first quarter of 2024.
- Caucharí-Olaroz is currently
operating at approximately 70% of the design capacity of 40,000
tonnes per year and has achieved production levels over this level
on a limited basis.
- Production guidance of 20,000 –
25,000 tonnes of lithium carbonate in 2024 remains unchanged.
- During the ramp up phase,
production is being primarily sold to Ganfeng Lithium Co. Ltd.
(“Ganfeng”).
- Production during the second
quarter of 2024 averaged approximately 99.5% lithium carbonate
content.
- Currently, realized pricing is
based on China battery-grade spot market prices adjusted for VAT
and approximately $2,000 per tonne of additional processing costs
required to reduce trace levels of impurities to achieve battery
quality specifications.
- Caucharí-Olaroz has been designed
to produce battery-quality lithium and as the ramp-up progresses
and quality improves, the processing cost is expected to decrease
until no longer applicable.
- In the current price environment,
Caucharí-Olaroz is expected to remain operating cash flow positive
when adjusted for working capital changes.
- Unit costs are expected to decrease
as production volumes increase and as the plant approaches
continuous production and nameplate capacity.
Financial Highlights
- As of June 30, 2024, Lithium
Argentina had $96M in cash and cash equivalents and an undrawn $75M
credit facility with Ganfeng.
- As of June 30, 2024, Minera Exar
S.A. (“Exar”) had, on a 100% basis, approximately
$315M of US dollar and US dollar-linked debt at the official FX
rate or approximately $230M at current market FX rate.
- Includes a portion of an $80M bank
credit facility entered into in May 2024 to refinance existing
debt.
- The Company is planning to use a
portion of the $70M proceeds from the Pastos Grandes Transaction
(as defined below), along with contributions from Ganfeng, to
provide over $100M in additional liquidity to reduce leverage at
Exar.
- Ganfeng and the Company continue to
advance financing options to replace short-term debt with
longer-term financing for Exar.
Corporate Highlights
- Following receipt of Chinese
regulatory approvals in early August 2024, the Company expects to
close the previously announced Pastos Grandes transaction (the
“Pastos Grandes Transaction”) imminently.
- In June 2024,
the Company filed its 2023 Sustainability Report, “Enabling a Clean
Energy Transition with Responsible Lithium”.
INVESTOR WEBCAST
______________
AN INVESTOR WEBCAST HAS BEEN SCHEDULED FOR 10:00am ET ON
WEDNESDAY, AUGUST 14, 2024.
Please use the following link to access:
Second Quarter 2024 Results Webcast
FINANCIAL RESULTS
Selected consolidated financial information is
presented as follows:
(in US$ million except per share information) |
Quarter ended June 30, |
|
2024 |
2023 |
|
$ |
$ |
Expenses |
(21.5) |
(12.0) |
Net income |
2.2 |
25.8 |
Income per share – basic |
0.01 |
0.16 |
Income per share – diluted |
0.01 |
0.16 |
|
|
|
(in US$ million) |
As at June 30, 2024 |
As at December 31, 2023 |
|
$ |
$ |
Cash and cash equivalents |
96.2 |
122.3 |
Total assets |
1,046.1 |
1,055.0 |
Total liabilities |
(222.1) |
(226.1) |
|
|
|
In Q2 2024, net income was primarily due to
recognition of deferred tax recovery of $10.8 million caused by an
inflation adjustment on the tax basis of Pastos Grandes assets in
Argentina, gain on change in fair value of the convertible note
derivative liability and finance income partially offset by
expenses in the period.
During the six months ended June 30, 2024, total
assets decreased primarily due to a decrease in cash and cash
equivalents which were used to fund the Company’s operations and a
decrease in investment in the Caucharí-Olaroz project due the
Company’s share of loss of the Cauchari-Olaroz Project, partially
offset by an increase in loans advanced to Exar Capital.
This news release should be read in conjunction
with Lithium Argentina’s condensed consolidated interim financial
statements and management's discussion and analysis for the six
months ended June 30, 2024, which are available on SEDAR+. All
amounts are in U.S. dollars unless otherwise indicated.
ABOUT LITHIUM ARGENTINA
Lithium Argentina is an emerging producer of
lithium carbonate for use primarily in lithium-ion batteries and
electric vehicles. The Company, in partnership with Ganfeng Lithium
Co, Ltd., is ramping up production of the Caucharí-Olaroz lithium
brine operation in Argentina and advancing development of
additional lithium resources in the region. Lithium Argentina
currently trades on the TSX and on the NYSE, under the ticker
symbol “LAAC.”
For further information contact:Investor
RelationsTelephone: +54-11-52630616Email:
Kelly.obrien@lithium-argentina.comWebsite:
www.lithium-argentina.com
TECHNICAL INFORMATION
The Technical Information in this news release
with respect to Caucharí-Olaroz, has been reviewed and approved by
Ernest Burga, P.Eng., a Qualified Person as defined by National
Instrument 43-101 independent of the Company.
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 herein as “forward-looking information”).
These statements relate to future events or the Company’s future
performance. All statements, other than statements of historical
fact, may be forward-looking information. Forward-looking
information generally can be identified by the use of words such as
“seek,” “anticipate,” “plan,” “continue,” “estimate,” “expect,”
“may,” “will,” “project,” “predict,” “propose,” “potential,”
“targeting,” “intend,” “could,” “might,” “should,” “believe” and
similar expressions. These statements involve known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking information.
In particular, this news release contains
forward-looking information, including, without limitation, with
respect to the following matters or the Company’s expectations
relating to such matters: 2024 expected production for the
Caucharí-Olaroz project; expected reductions in unit costs;
expectations with respect to the Company being cash flow positive;
goals of the Company; development of the Caucharí-Olaroz project,
including timing of the ramp up in production capacity and product
quality, timing of commissioning and ramp up of the KCI plant;
expectations with respect to regional development planning for the
Pasto Grandes basin and the timing thereof; use of proceeds from
the Pastos Grandes transaction; and the timing of closing of the
Pastos Grandes Transaction.
Forward-looking information does not take into
account the effect of transactions or other items announced or
occurring after the statements are made. Forward-looking
information contained in this news release is based upon a number
of expectations and assumptions and is subject to a number of risks
and uncertainties, including but not limited to those related to:
current technological trends; a cordial business relationship
between the Company and third party strategic and contractual
partners, including the co-owners of the Caucharí-Olaroz project;
ability of the Company to fund, advance, develop and ramp up the
Caucharí-Olaroz project, the impacts of the project when full
production commences; ability of the Company to advance and develop
the Pastos Grandes and Sal de la Puna projects; 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 Argentina; demand
for lithium, including that such demand is supported by growth in
the electric vehicle market; the impact of increasing competition
in the lithium business, and the Company’s competitive position in
the industry; general economic, geopolitical, and political
conditions; the stable and supportive legislative, regulatory and
community environment in the jurisdictions where the Company
operates; regulatory, and political matters that may influence or
be influenced by future events or conditions; local and global
political and economic conditions; governmental and regulatory
requirements and actions by governmental authorities, including
changes in government policies; stability and inflation of the
Argentine 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 litigation
costs, 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; development and ramp up costs for the
Caucharí-Olaroz project, and costs for any additional exploration
work at the projects; uncertainties inherent to 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; discretion in the use of proceeds of
certain financing activities; the Company’s ability to obtain
additional financing on satisfactory terms or at all; the ability
to develop and achieve production at any of the Company’s mineral
exploration and development properties; the impacts of pandemics
and geopolitical issues on the Company’s business; the impact of
inflationary and other conditions on the Company’s business and
global markets; and accuracy of development budget and construction
estimates. Many of these expectations, assumptions, risk and
uncertainties are beyond the Company’s control, and could cause
actual results to differ materially from those that are disclosed
in or implied by such forward-looking information.
Although the Company believes that the
assumptions and expectations reflected in such forward-looking
information are reasonable, the Company can give no assurance that
these assumptions and expectations will prove to be correct. Since
forward-looking information inherently involves risks and
uncertainties, undue reliance should not be placed on such
information. The Company’s actual results could differ materially
from those anticipated in any forward-looking information as a
result of the risk factors set out herein and, in the Company’s
latest annual information form (“AIF”), management
information circular, management discussion & analysis and
other publicly filed documents (collectively, the “Company
Public Disclosure”) all of which are available on
SEDAR+.
All forward-looking information contained in
this news release is expressly qualified by the risk factors set
out in the latest Company Public Disclosures. Such risks include,
but are not limited to the following: lithium prices; inability to
obtain required governmental permits and government-imposed
limitations on operations; technology risk; political risk
associated with foreign operations, including co-ownership
arrangements with foreign domiciled partners; risks arising from
the outbreak of hostilities in Ukraine, Israel, the Middel East and
other parts of the world and the international response, including
but not limited to their impact on commodity markets, supply
chains, equipment and construction; emerging and developing market
risks; risks associated with not having production experience;
operational risks; changes in government regulations; changes to
environmental requirements; failure to obtain or maintain necessary
licenses, permits or approvals; insurance risk; receipt and
security of mineral property titles and mineral tenure risk;
changes in project parameters as plans continue to be refined;
changes in legislation, governmental or community policy;
regulatory risks with respect to strategic minerals; mining
industry competition; market risk; volatility in global financial
conditions; uncertainties associated with estimating Mineral
Resources and Mineral Reserves, including uncertainties relating to
the assumptions underlying Mineral Resource and Mineral Reserve
estimates; risks related to unknown financial contingencies,
including litigation costs, on the Company’s operations;
unanticipated results of exploration activities; cybersecurity
risks and threats; and uncertainties with obtaining required
approvals (including regulatory approvals) for the Pastos Grandes
Transaction. Such risk factors are not exhaustive. The Company does
not undertake any obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, except as required by law.
All forward-looking information contained in this news release is
expressly qualified in its entirety by this cautionary statement.
Additional information about the above-noted assumptions, risks and
uncertainties is contained in the Company Public Disclosures, which
are available on SEDAR+ at www.sedarplus.ca.
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