Welp MagazineLithium Americas Corp. (otcmkts lacdf) is a lithium mining company with operational mines in Argentina and Nevada, and development projects in Argentina, Bolivia and Canada. The company used to be known as Western Lithium USA Corporation but in March 2015, it changed its name to Lithium Americas Corp. Lithium Americas Corp. is headquartered in Vancouver, Canada. The Chairman and Chief Executive Officer John Kananck resigned on March 11, 2019. He was replaced by interim President and CEO Christopher P. Browne Effective immediately with dogged focused on advancing lithium.
History
Lithium Americas was founded in 1996 and is headquartered in Toronto, Canada. In May 2018, the company acquired all of the issued and outstanding shares of Millennial Lithium Corp., a Canadian mineral exploration and development company. The acquisition gave Lithium Americas an undivided 80% interest in the Pastos Grandes lithium brine project located in Potosi Department, Bolivia.
Joint venture agreements
Ganfeng
In December 2018, the company signed a joint venture agreement with Ganfeng Lithium for the development of the Thacker Pass lithium claystone deposit. Under the terms of the agreement, Ganfeng will make an initial investment of $160 million and will own a 50% interest in the Thacker Pass project.
POSCO
In November 2018, the company signed a joint venture agreement with POSCO for the development of the Kings Valley lithium claystone deposit. Under the terms of the agreement, POSCO will make an initial investment of $18 million and will own a 20% interest in the Kings Valley project.
Bacanora Minerals Ltd
In September 2018, the company acquired all of the issued and outstanding shares of Bacanora Minerals Ltd., a Canadian mining company. The acquisition gave Lithium Americas a 70% interest in the Sonora lithium project located in Sonora State, Mexico.
In May 2017, the company completed an initial public offering of common shares and raised gross proceeds of $106 million.
Western Lithium USA Corporation
In December 2016, the company acquired all of the issued and outstanding shares of Western Lithium USA Corporation, a Nevada-based lithium mining company. The acquisition gave Lithium Americas 100% ownership of the Kings Valley lithium deposit located in Humboldt County, Nevada.
Rodinia Minerals Inc
In July 2016, the company acquired all of the issued and outstanding shares of Rodinia Minerals Inc., a Canadian mining company. The acquisition gave Lithium Americas 100% ownership of the Caucharí-Olaroz lithium brine project located in Jujuy Province, Argentina.
Operations at lithium americas corp
Lithium Americas specializes in the production of lithium carbonate, lithium hydroxide, and lithium chloride, which are all used in electric vehicle batteries and energy storage applications. In 2018, the company sold 9,325 tonnes of lithium carbonate and 4,732 tonnes of lithium hydroxide for a total of $23.6 million. The majority of the company’s sales are to customers in China and South Korea.
The company has two operational mines, one in Argentina and one in Nevada. The company also has development projects in Argentina, Bolivia and Canada.
Thacker Pass project
When the was advancing towards first production, their flagship project was the Thacker Pass lithium claystone deposit, located in northwestern Nevada, United States. In December 2018, Lithium Americas signed a joint venture agreement with Jiangxi Ganfeng Lithium Co., Ltd. for the development of the Thacker Pass project.
Under the terms of the agreement, Ganfeng made an initial investment of $160 million and will own a 50% interest in the Thacker Pass project.
The Thacker Pass project had an estimated production capacity of 20,000 metric tons of lithium carbonate equivalent. The deposit while still developing was estimated to contain 3.8 million tonnes of lithium oxide and 7.6 million tonnes of potassium oxide.
The cauchari Olaroz lithium brine project
The cauchari olaroz lithium brine project is located in Jujuy Province, Argentina. The project is operated by Minera Exar, a joint venture between Lithium Americas (60%) and SQM (40%). The cauchari olaroz project has an annual production capacity of 18,000 metric tons of lithium carbonate equivalent. The project is estimated to contain 11.5 million tonnes of lithium oxide.
Kings Valley project
In November 2018, the company signed a joint venture agreement with POSCO for the development of the Kings Valley project. Under the terms of the agreement, POSCO will make an initial investment of $18 million and will own a 20% interest in the Kings Valley project.
The Kings Valley lithium claystone deposit is located in Eureka County, northeastern Nevada, United States. The project is operated by Lithium Nevada Corporation, a joint venture between Lithium Americas (80%) and POSCO (20%).
The Kings Valley project has an estimated production capacity of 18,000 metric tons of lithium carbonate equivalent. The deposit is estimated to contain 1.3 million tonnes of lithium oxide and 2.6 million tonnes of potassium oxide.
Sonora lithium project
The Sonora lithium project is located in Sonora State, Mexico. The project is estimated to contain 3.8 million tonnes of lithium oxide. The project is currently in the early stages of development and is not yet in production.
Centenario lithium brine project
The Centenario lithium brine project is located in Potosi Department, Bolivia. The project is estimated to contain 9.5 million tonnes of lithium oxide. The project is currently in the early stages of development and is not yet in production.
James Bay lithium pegmatite project
The James Bay lithium pegmatite project is located in Quebec, Canada. The project is estimated to contain 1.8 million tonnes of lithium oxide. The project is currently in the early stages of development and is not yet in production.
Other projects include the Aguas Calientes Norte lithium brine project which is located in salt lakes in the Atacama Desert of northern Chile and operated by Minera Exar, a joint venture between Lithium Americas (60%) and the Antofalla lithium carbonate project which is located in Catamarca Province, Argentina. This project is estimated to contain 1.7 million tonnes of lithium oxide.
Assets
The company’s primary asset is the Caucharí-Olaroz lithium brine project located in Jujuy Province, Argentina. In February 2018, the company acquired all of the issued and outstanding shares of Millennial Lithium Corp., a Canadian mineral exploration and development company. The acquisition gave Lithium Americas an undivided 80% interest in the Pastos Grandes lithium brine project located in salt lakes in the Potosi Department of southwestern Bolivia.
Is Lithium Americas a good stock?
Lithium Americas is a publicly traded company on the toronto stock exchange tsx under the ticker symbol LAC on the new york stock exchange. The company has a market capitalization of CAD$2.3 billion as of March 2019. Lithium Americas has been profitable in only one year out of the past five, with sales of $23.6 million and a net loss of $69.4 million in 2018.
Growth of Shares
Despite this, the company’s share price has seen significant growth in recent years, rising from CAD$0.50 in early 2016 to a high of CAD$8.24 in June 2018. These sales were driven by higher demand for lithium chemicals used in electric vehicles and energy storage applications.
As of December 31, 2018, Lithium Americas had $505.3 million in cash and cash equivalents. The company’s share price has since pulled back to around CAD$4.50 as of March 2019. This share price growth is primarily due to increasing investor interest in the electric vehicle market. Also, the electric vehicle market is still in its early stages of development and may not reach the level of popularity that some investors are expecting.
Loans
In March 2019, the company entered into a $40 million loan agreement with Glencore plc. The loan has a term of four years and bears interest at a rate of 8% per year. The loan is secured by a first-priority lien on all of the company’s assets.
Portfolio
The company has a diversified portfolio of projects in development, including the Thacker Pass deposit in Nevada, the Kings Valley deposit in Nevada, the Caucharí-Olaroz project in Argentina, the Sonora project in Mexico, the Centenario project in Bolivia, and the Antofalla project in Argentina.
Lithium Americas is one of the world’s largest producers of lithium chemicals and might consider advancing towards construction . Looking forward, the company is well positioned to benefit from the growing demand for lithium chemicals used in electric vehicles and energy storage applications.
Conclusion
Lithium Americas is a high-risk, high-reward investment. The company’s share price has seen significant growth in recent years, but it remains highly volatile. The electric vehicle market is still in its early stages of development and may not reach the level of popularity that some investors are expecting. However, if the market does grow as expected , Lithium Americas could be a very profitable investment and become one of the best investment decisions you can make.
