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, 2019.
This news release should be read in conjunction
with Lithium Americas’ audited consolidated financial statements
and management's discussion and analysis ("MD&A") for the year
ended December 31, 2019, which are available on the Company’s
website and SEDAR.
All amounts are in U.S. dollars unless otherwise
indicated.
Highlights
Caucharí-Olaroz Lithium Project
(“Caucharí-Olaroz”):
- Construction activities at
Caucharí-Olaroz continue to advance in accordance with the 40,000
tonne per annum (“tpa”) of battery-quality lithium carbonate
development plan.
- Currently, there are more than
1,000 construction personnel on site, including 286 full-time
employees in Jujuy, Argentina.
- Construction is approximately 36%
complete, as of the end of February 2020, and continues to advance
on budget.
- As of February 29, 2020, $331
million (59%) of the planned capital expenditure has been committed
of which $222 million (39%) has been spent.
- Contracts associated with the 33 kV
powerline and the 13.2 kV distribution lines were awarded, the
contractors were mobilized and the development activities have
commenced.
- The gas pipeline contract was
awarded, and the contractor commenced development activities at
site.
- The construction camp has close to
1,000 beds available and completion of the remaining bed modules is
expected by the end of Q1 2020.
- Earthworks for the carbonate plant
site have been completed.
- 98% of the total planned earthworks
for the 12 square kilometer evaporation pond layout are completed
and approximately 38% of the liner has been installed.
- The concrete foundation for the
boron solvent extraction plant is approximately 60% complete.
- Construction of buildings for
storage of soda ash, reagents, finished products and other
warehouses is 99% complete.
- The development plan contemplates
that construction will be substantially mechanically
complete by the end of 2020; however, several major pieces of
equipment for the chemical plant are being fabricated in China and
some suppliers have sub-vendors fabricating in China. The Company
has become aware that there will be delays of up to 90 days in
the delivery time for some of these items as a result of the recent
COVID-19 outbreak. Accordingly, the Company anticipates that there
will be a delay in achieving substantial completion of construction
until early 2021. The Company continues to assess the impact of
COVID-19 on the development program, including discussions with all
vendors and freight forwarders on the delivery schedule, to assess
the impact on schedule and to develop mitigation strategies, if
necessary. The Company intends to provide updated guidance on
the construction schedule in Q2 2020.
Thacker Pass Lithium Project (“Thacker
Pass”):
- Permitting continues as planned,
with the Mine Plan of Operations accepted by the Bureau of Land
Management (“BLM”) and the Notice of Intent published on January
21, 2020 in the federal register, which started a mandated 365 day
requirement for the BLM to complete the permitting process. Major
permits for Phase 1 (as defined further below) are expected to be
received by early 2021.
- Over 10,500 kg of high-quality
lithium sulphate has been produced at the process testing facility
in Reno, Nevada.
- Third-party vendors are engaged to
engineer and design lithium carbonate and lithium hydroxide
evaporator and crystallizer as well as provide performance
guarantees and product samples.
- A definitive feasibility study
(“DFS”) is being completed with an initial targeted production
capacity of 20,000 tpa lithium hydroxide and approximately 2,000
tpa lithium carbonate (“Phase 1”); the DFS is on track to be
complete by mid-2020.
- The Industrial Company, a division
of Kiewit, is engaged to complete key aspects of the feasibility
study.
- Project permitting and DFS costs
are expected to be fully funded from available cash on hand.
- The Company is exploring financing
options, including the possibility of a joint venture partner at
Thacker Pass.
Corporate:
- As at December 31, 2019, the
Company had $83.6 million in cash and cash equivalents, including
$52.5 million representing the Company’s 50% share of
Caucharí-Olaroz cash and cash equivalents and $31.1 million held by
Lithium Americas and its subsidiaries.
- As at December 31, 2019, the
Company had drawn $83.8 million of the $205.0 million senior credit
facility available to fund its share of Caucharí-Olaroz
construction. An additional $12.0 million was drawn subsequent to
year end.
- In February 2020, the Company drew
down $22.2 million from its $100.0 million unsecured, limited
recourse, subordinated loan facility with $77.8 million remaining
undrawn and available to fund the Company’s share of
Caucharí-Olaroz expenditures and general corporate purposes.
- As at the date of this news
release, the Company has total available credit and loan facilities
of $187.0 million.
- As previously announced, on
February 7, 2020 the Company and Ganfeng Lithium Co. Ltd.
(“Ganfeng”) entered into an agreement whereby Ganfeng has agreed to
subscribe for new shares of Caucharí-Olaroz for cash consideration
of $16.0 million increasing its interest in Caucharí-Olaroz from
50% to 51%, with Lithium Americas owning the remaining 49%. In
addition, Lithium Americas will receive $40.0 million in cash from
the proceeds of non-interest-bearing loans from Ganfeng. Ganfeng
has commenced the regulatory approval application process in China
and the transaction is expected to be completed in Q3 2020.
- On October 20, 2019, the Board of
Directors appointed Dr. Yuan Gao as an independent director of the
Company.
- The Company is closely monitoring
the impact of the COVID-19 virus and is prepared for potential
short-term impacts on its projects. The Company has appointed a
team with overall responsibility for COVID-19 response planning,
which includes senior management of the Company. The Company is
putting a particular focus on the health and safety of all its
employees and contractors as well as its host communities. In
addition, the Company is conducting a careful review of various
areas that may impact the timing of the
Company's projects.
Financial Results:
Selected consolidated financial information is
presented as follows:
(in US$ million
except per share information) |
Year ended December 31,2019 |
|
Year ended December 31,2018 |
|
|
$ |
|
$ |
|
Expenses |
|
(15.7 |
) |
|
(23.7 |
) |
Net income/(loss) |
|
51.7 |
|
|
(28.3 |
) |
Total comprehensive
income/(loss) |
|
52.1 |
|
|
(32.4 |
) |
Income/(loss) per share -
basic |
|
0.58 |
|
|
(0.32 |
) |
Cash and cash equivalents |
|
83.6 |
|
|
41.6 |
|
Total assets |
|
293.8 |
|
|
103.9 |
|
Total long-term liabilities |
|
(119.2 |
) |
|
(18.3 |
) |
Following closing of the $160.0 million
investment by Ganfeng in Cauchari-Olaroz (the “Project Investment”)
in August, 2019 the Company’s investment in Caucharí-Olaroz is
accounted for as a joint operation and the Company now recognizes
its share of any assets, liabilities and results of the joint
operation rather than equity accounting for the investment. In
2019, total assets increased primarily as a result of recognizing
the Company’s 50% share of Caucharí-Olaroz’s cash of $52.5 million,
property, plant and equipment of $156.9 million and other assets.
In 2019, total long-term liabilities increased primarily as a
result of recognizing the Company’s share of its joint operation’s
borrowings of $28.9 million and drawdowns from the Company’s senior
credit facility of $66.3 million.
Net income for the year ended December 31, 2019
was $51.7 million compared to net loss of $28.3 million for the
year ended December 31, 2018. Net income in 2019 is primarily a
result of a gain on closing of the Project Investment of $74.5
million.
Qualified Person:
The scientific and technical information in this
news release has been reviewed and approved by Dr. Rene LeBlanc, a
Qualified Person for purposes of NI 43-101 by virtue of his
experience, education and professional association. Dr.
LeBlanc is the Chief Technical Officer of the Company. Information
on the Company’s data verification and QA / QC procedures is
contained in Lithium Americas’ current technical reports for the
Caucharí-Olaroz lithium project and the Thacker Pass lithium
project, available at www.sedar.com.
About Lithium
Americas:
Lithium Americas is partnered with Ganfeng on
the Caucharí-Olaroz lithium project under construction in Jujuy,
Argentina. Lithium Americas through a wholly owned subsidiary,
Lithium Nevada, owns 100% of the Thacker Pass lithium project
located in Nevada. 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:Lithium Americas
Corp.Investor RelationsSuite 300 – 900 West Hastings
StreetVancouver, BC, V6C 1E6Telephone: 778-656-5820Email:
ir@lithiumamericas.comWebsite: 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: development of
the Caucharí-Olaroz and Thacker Pass projects, including timing and
budget, completion of construction activities, anticipated
productions, and results thereof; discussions with vendors and
freight forwarders, and results thereof; the expected benefits
from, and approvals related thereto, of the February 2020 Ganfeng
investment; capital expenditures and programs; estimates of the
mineral resources and reserves at its properties; development of
mineral resources and reserves; government regulation of mining
operations and treatment under governmental and taxation regimes;
the timing and amount of future production; currency exchange and
interest rates; the Company’s ability to raise capital; exploration
of financing options and joint venture partner for Thacker Pass;
expected expenditures to be made by the Company on its properties;
the timing, cost, quantity, capacity and product quality of
production of the Caucharí-Olaroz project, which is held and
operated through the Company’s joint venture with Ganfeng;
successful operations of the Ganfeng co-ownership structure;
ability to produce high quality battery grade lithium carbonate;
the timing, cost, quantity, capacity and product quality of
production at the Thacker Pass project; results of the Company’s
engineering, design permitting program at the Thacker Pass project,
including that the Company meets deadlines set forth herein and
receives permits as anticipated; successful results from the
Company’s testing facility and third-party tests related thereto;
capital costs, operating costs, sustaining capital requirements,
timing, results and completion of the Thacker Pass feasibility
study; funding of project permitting and DFS costs for the Thacker
Pass project; the Company’s share of the expected capital
expenditures for the construction of Stage 1 of the Caucharí-Olaroz
project; ability to achieve capital cost efficiencies; stability
and inflation related to the Argentine peso, whether the Argentine
government implements additional foreign exchange and capital
controls, and the effect of current or any additional regulations
on the Company’s operations; approval of pending patents; the
potential for partnership and financing scenarios for the Thacker
Pass project; the monitoring of the COVID-19 outbreak and the
provision of updates on potential impact to the construction
schedule; and the results of the orderly wind-up and divestiture of
RheoMinerals.
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
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, forecasted demand for
lithium products, including pricing thereof, the Company’s ability
to fund, advance and develop the Caucharí-Olaroz project and the
Thacker Pass project into production, including results therefrom
and timing thereof, accuracy of mineral resources, including
whether such mineral resources can ever be converted into reserves,
reliability of technical data, accuracy of current budget and
construction estimates, ability to achieve commercial production,
general economic conditions, maintenance of a positive business
relationship with Ganfeng, timely responses from governmental
agencies responsible for reviewing and considering the Company’s
permitting activities, the Company position in a competitive
environment, and a stable and supportive legislative, regulatory
and community environment.
Forward-looking information also involve known
and unknown risks that may cause actual results to differ
materially, these risks include, among others, inherent risks in
development of capital intensive mineral projects (including as
co-owners), variations in mineral resources and mineral reserves,
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, political risk
associated with foreign operations, permitting risk, including
receipt of new permits and maintenance of existing permits, 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, and
general market and industry conditions. Additional risks,
assumptions and other factors are set out in the Company’s
management discussion analysis and most recent annual information
form, copies of which are available on SEDAR at www.sedar.com.
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 forward-looking information.
Lithium Americas (TSX:LAC)
Historical Stock Chart
From Aug 2024 to Sep 2024
Lithium Americas (TSX:LAC)
Historical Stock Chart
From Sep 2023 to Sep 2024