Lithium Americas completes JV restructuring, shares up

Image courtesy of Lithium Americas Corp.

Lithium Americas (TSX, NYSE: LAC) has completed its previously arranged transaction with partner Ganfeng Lithium in respect of the ownership structure on the Caucharí-Olaroz lithium project currently under development in Jujuy, Argentina.

As per the prior agreement, Ganfeng has subscribed for new shares of Minera Exar SA, the joint venture company that holds the Caucharí-Olaroz project, for cash consideration of $16 million.

The Caucharí-Olaroz project represents one of the few large-scale lithium operations currently in development globally

This would increase the Chinese lithium miner’s interest in the JV to 51%, with Lithium Americas owning the remaining 49%. The Caucharí-Olaroz project was previously a 50/50 JV between the companies.

Lithium Americas has also received $40 million in cash from the proceeds of a non-interest-bearing loan from Ganfeng.

“The transaction with Ganfeng Lithium further strengthens our long-term partnership in Argentina as we work together to bring Caucharí-Olaroz into production,” Lithium Americas president and CEO Jon Evans said in a press release.

“With an additional $40 million in cash on our balance sheet and over $200 million in available capital to fund our share of Caucharí-Olaroz, Lithium Americas remains in a strong financial position as we advance both of our projects,” he added.

Last week, the company announced that construction activities at Caucharí-Olaroz are set to resume after experiencing delays with the project due to the coronavirus pandemic. The operation was first suspended in March to comply with government restrictions and was forced to halt work once again in July when two workers tested positive for covid-19.

Slated to begin production in 2021, the Caucharí-Olaroz project is approximately 50% complete and represents one of the few large-scale lithium operations currently in development globally.

Shares of Lithium Americas soared 9.5% by 12:30 p.m. EDT Friday. The Vancouver-based miner has a market capitalization of approximately C$903.85 million.

7280 0

Comments

Your email address will not be published. Required fields are marked *

More Canada News