Lithium Americas posts US$51.9 million profit, stock advances

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Lithium Americas Corp. [LAC-TSX, NYSE] said Friday it posted a profit of US$51.9 million in 2019, but added that it is anticipating a delay in the construction of its Cauchari-Olaroz lithium project in Jujuy, Argentina.

Lithium America shares advanced on the news, rising 7.1% or 30 cents to $4.52. The shares are currently trading in a 52-week range of $3.60 and $8.00.

Lithium Americas and Chinese partner Ganfeng Lithium Co. Ltd. are working to advance the Cauchari-Olaroz project in Argentina with target production of 40,000 tonnes per annum of battery-quality carbonate development plan. The Cauchari-Olaroz project is located in the heart of the Puna Plateau, an area where over 80% of the world’s lithium brine reserves are located. This area is also known as the “Lithium Triangle.”

“Construction is approximately 36% complete, as of the end of February, 2020, and continues to advance on budget,’’ the company said in a press release Friday that contained its financial and operating results for the fourth quarter and year ended December 31, 2019.

“The development plan contemplates that construction will be substantially mechanically complete by the end of 2020,” the company said. However, it said 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,’’ Lithium Americas said. “Accordingly, the company anticipates that there will be a delay in achieving substantial completion of construction until early 2020,” it said.

Lithium Americas said Ganfeng recently agreed to subscribe for new shares of Cauchari-Olaroz for $16 million in cash, thereby increasing its stake in the Cauchari-Olaroz from 50% to 51%. The other 49% is held by Lithium Americas.

In addition, Lithium Americas will receive $40 million in cash from the proceeds of non-interest-bearing loans from Ganfeng.

Aside from Cauchari-Olaroz, Lithium Americas is also focused on the Thacker Pass project in Nevada.

Thackers Pass is a pre-feasibility-stage lithium project located in Humbolt County, northern Nevada. The project is situated at the southern end of the McDermitt Caldera, approximately 100 kilometres north of Winnemucca.

In 2018, Lithium Americas completed a pre-feasibility study (PFS) on a two-phase project with a production capacity designed to reach 60,000 tonnes annually of battery-grade lithium carbonate (Li2C03) and 46-year mine life.

The PFS envisages initial phase one production capacity of 30,000 tonnes annually of battery grade lithium carbonate, commencing in 2022 and increasing in phase two to 60,000 tonnes annually by 2026.

The project will be developed as an open-pit mining operation using conventional continuous mining equipment.

On Friday, the company said a definitive feasibility study is being completed with an initial targeted production capacity of 20,000 tonnes annually of lithium hydroxide and approximately 2,000 tonnes annually of lithium carbonate. The study is on track to be completed by mid-2020, the company said.

Meanwhile, the company is exploring financing options, including the possibility of a joint venture partner at Thacker Pass.

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