UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of: August 2022

Commission file number: 001-38350

 

Lithium Americas Corp.

(Translation of Registrant’s name into English)

 

900 West Hastings Street, Suite 300,

Vancouver, British Columbia,

Canada V6C 1E5

 

(Address of Principal Executive Office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover:

Form 20-F [ ]          Form 40-F   [X]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]

 

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Dated: August 1, 2022

 

 

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EXHIBIT INDEX

 

 

 

Exhibit 99.1

 

 

(Company logo) CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2022 (Expressed in US Dollars)

 

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LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)

(Expressed in thousands of US dollars)

 

 

 

 

Subsequent event (Note 21)

 

Approved for issuance on July 28, 2022

On behalf of the Board of Directors:

 

 

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LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

 

 

 

 

 

 

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LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(Expressed in thousands of US dollars, shares in thousands)

 

 

 

 

 

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LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Expressed in thousands of US dollars)

 

 

 

 

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

Lithium Americas Corp. (“Lithium Americas” or the “Company”) is a Canadian-based resource company focused on advancing three significant lithium projects: the Cauchari-Olaroz project (“Cauchari-Olaroz”), a lithium brine project located in the Salar de Olaroz and Salar de Cauchari in Jujuy province, in north-western Argentina; the Thacker Pass project (“Thacker Pass”), a sedimentary-based lithium project located in the McDermitt Caldera in Humboldt County in north-western Nevada, USA and the Pastos Grandes lithium project (“Pastos Grandes”), a lithium brine project located in Salta province of Argentina.

The Company’s interest in Cauchari-Olaroz is held through a 44.8% ownership interest in Minera Exar S.A. (“Minera Exar”), a company incorporated under the laws of Argentina. Ganfeng Lithium Co. Ltd. (“Ganfeng”) owns 46.7% of Minera Exar with the remaining 8.5% interest held by Jujuy Energia y Mineria Sociedad del Estado (“JEMSE”), a mining investment company owned by the government of Jujuy province in Argentina. Cauchari-Olaroz is in the development stage and nearing completion of construction. The Company holds a 100% interest in Thacker Pass through a wholly-owned subsidiary, Lithium Nevada Corp. (“Lithium Nevada”), a company incorporated under the laws of Nevada. Thacker Pass is in the exploration and evaluation stage. On January 25, 2022, the Company acquired Millennial Lithium Corp. (“Millennial”) and added its Argentinean lithium project Pastos Grandes to its pipeline of projects (Note 8).

The Company’s common shares are listed on the Toronto Stock Exchange and the New York Stock Exchange under the symbol “LAC”.

The Company’s head office and principal address is Suite 300, 900 West Hastings Street, Vancouver, British Columbia, Canada, V6C 1E5.

To date, the Company has not generated significant revenues from operations and has relied on equity and other financings to fund operations. The underlying values of exploration and evaluation assets, property, plant and equipment and the investment in Cauchari-Olaroz project are dependent on the existence of economically recoverable reserves, securing and maintaining title and beneficial interest in the properties, and the ability of the Company to obtain the necessary financing to complete permitting and development, and to attain future profitable operations.

 

 

 

These condensed consolidated interim financial statements (“Interim Financials”) have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) applicable to the preparation of interim financial statements, including International Accounting Standard (“IAS”) 34, Interim Financial Reporting. The Interim Financials should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2021 (the “2021 Annual Financials”), which have been prepared in accordance with IFRS. These financial statements include the results for Millennial from the date of its acquisition on January 25, 2022.

The Interim Financials are expressed in US dollars, the Company’s presentation currency. The same accounting policies and methods of computation have been used in the Interim Financials and 2021 Annual Financials.

 

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

Critical Accounting Estimates and Judgments

The preparation of these Interim Financials in conformity with IFRS applicable to the preparation of interim financial statements requires judgments, estimates, and assumptions that affect the amounts reported. Those estimates and assumptions concerning the future may differ from actual results. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The nature and number of significant estimates and judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty are substantially the same as those that management applied to the 2021 Annual Financials, except as described below.

COVID-19 Uncertainty

The COVID-19 pandemic declared by the World Health Organization in March 2020 is continuing to have a significant impact globally and on operations of the Company. The Company continues to advance operations, while protecting the safety and health of its employees, contractors and the communities in which it operates in accordance with government and public health authority requirements and guidelines.

COVID-19 case numbers did not change significantly in Q2 2022. Construction activities at the Caucharí-Olaroz project continued to advance in strict compliance with COVID-19 protocols developed by Minera Exar and approved by authorities in Jujuy province where the project is located. Construction costs related to Caucharí-Olaroz continue to be capitalized in accordance with the Company’s policy, including costs arising from construction of the project during the pandemic such as workforce testing and quarantining, rental costs for additional camp facilities to allow for social distancing, and other additional contractors’ costs resulting from COVID-19 restrictions.

Accounting for Acquisition of Millennial

The Company accounted for the January 2022 acquisition of Millennial as an asset acquisition. Significant judgment was required to determine that the application of this accounting treatment was appropriate for the transaction. This included, among others, the determination that Millennial was not considered a business under IFRS 3 - Business Combinations as Millennial did not have inputs and substantive processes that can collectively contribute to the creation of outputs.

New IFRS Pronouncements

Amendments to IAS 16 – Property, Plant and Equipment: Proceeds before Intended Use

In May 2020, the IASB issued amendments to IAS 16, Property, Plant and Equipment (IAS 16). The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognize such sales proceeds and related costs in profit (loss). An entity is required to apply these amendments for annual reporting periods beginning on or after January 1, 2022.

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

The amendments are applied retrospectively only to items of property, plant and equipment that are available for use after the beginning of the earliest period presented in the financial statements in which the entity first applies the amendments.

There was no impact of these amendments on the Company’s Q2 2022 financial results. It is expected that the amendments will affect the accounting related to the sale of products upon commencement of production at Cauchari-Olaroz.

 

 

 

As at June 30, 2022, $2,464 of cash and short-term deposits were held in Canadian dollars (December 31, 2021 – $4,393), $438,166 of cash and short-term deposits were held in US dollars (December 31, 2021 – $506,214) and $191 of cash and short-term deposits were held in Argentine Pesos (December 31, 2021 – Nil). Cash and short-term deposits earn interest between 0.95%-1.8% per annum.

 

On April 28, 2022, the Company entered into an agreement to acquire shares of Green Technology Metals Limited (ASX: GT1) (“Green Technology Metals”), a North American focused lithium exploration and development company with hard rock spodumene assets in north-west Ontario, Canada, in a private placement for total consideration of $10,000, or approximately 5% of Green Technology Metals issued and outstanding shares following closing of the share placement.

As at June 30, 2022, the Company holds approximately 13,301 common shares of Green Technology Metals with an estimated fair value of $5,782 determined based on the market price of Green Technology Metals shares as of such date. A loss on change in fair value of Green Technology Metals Shares of $4,237 was recognized in the statement of comprehensive loss.

 

In 2021, the Company acquired 66,226 common shares and 21,429 share purchase warrants of Arena Minerals Inc. (TSX-V: AN) (“Arena Minerals”) for total consideration of CDN$18,632 ($14,758). Each warrant entitles the holder to acquire one common share of Arena Minerals at CDN$0.25 for a period of 24 months from the date of issuance.

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

Pursuant to the acquisition agreement, Lithium Americas has the right (i) to participate in future Arena Minerals financings to maintain its pro rata ownership interest in Arena Minerals if the Company maintains an ownership interest of at least a 7.5%; and (ii) to appoint a nominee to the Arena Minerals board of directors if the Company maintains an ownership interest of at least a 10%.

At June 30, 2022, the Company owned approximately 17.05% of the issued and outstanding shares of Arena Minerals.

The Company has significant influence over Arena Minerals by virtue of its current equity holdings of shares and warrants, and its nominee director to the board of Arena Minerals. As such, the investment in Arena Minerals is accounted for using the equity method of accounting. Warrants to acquire Arena Mineral’s common shares are derivatives and accounted for at fair value with changes in fair value recorded in the statement of comprehensive loss.

 

The Arena Minerals warrants had an estimated fair value of $4,822 at June 30, 2022. The fair value of the warrants was estimated using a Black-Scholes valuation model with the following inputs: volatility of 108.9%, risk-free rate of 3.09%, expected dividend of 0%, and expected life of 1.06 years. A loss on fair value of $2,736 was recognized in the statement of comprehensive loss.

For the six months ended June 30, 2022, the Company recognized a loss of $437, which represents its share of loss of Arena Minerals under the equity method of accounting, resulting in an investment balance of $12,596 at June 30, 2022.

 

As at June 30, 2022 the Company, Ganfeng and JEMSE are 44.8%, 46.7% and 8.5% shareholders, respectively, of Minera Exar, the company that holds all rights, title and interest in and to Cauchari-Olaroz which is located in the Jujuy province of Argentina. The Company and Ganfeng are parties to a shareholders’ agreement concerning management of the project and are entitled to the project’s production offtake on a 49%/51% basis. Construction costs are also shared on the same 49%/51% pro rata basis between the Company and Ganfeng. The shareholders’ agreement regulates key aspects of governance of the project, which provides the Company with significant influence over Minera Exar and strong minority shareholder protective rights.

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

In addition, the Company and Ganfeng are 49% and 51% shareholders, respectively, in Exar Capital B.V. (“Exar Capital”), a company that provides financing to Minera Exar for the purpose of advancing construction of Cauchari-Olaroz (the investment in Minera Exar and Exar Capital together, the “Investment in Cauchari-Olaroz project”). Minera Exar and Exar Capital are accounted for using the equity method of accounting.

Loans to Minera Exar and Exar Capital  

The Company has entered into loan agreements with Minera Exar and Exar Capital to fund the construction of Cauchari-Olaroz. Changes in the loans’ balances are summarized below.

 

 

 

Prior to 2022, loans by the Company and Ganfeng to Exar Capital were non-interest bearing. Starting from January 1, 2022, as agreed between the Company and Ganfeng, all loans by both the Company and Ganfeng to Exar Capital were amended to introduce interest.

 

Loans advanced prior to 2022 carry interest rates between 9.74% - 12.64% while loans advanced starting in 2022 will carry an interest rate of the Secured Overnight Financing Rate (“SOFR”) plus 10.305%. SOFR is a benchmark interest rate for dollar-denominated loans and derivatives established as an alternative benchmark rate as the London Inter-Bank Offered Rate (“LIBOR”) is being gradually phased out. The amendment to the terms of the loans resulted, for accounting purposes, in an extinguishment of the pre-existing instruments and the recognition of new loans. The effect of this change was a re-measurement of the loan balances at January 1, 2022 from $70,856 to $125,847, which reversed the unamortized discount on the previously non-interest bearing loans. The extinguishment gain was recorded as $54,991, of which $34,637 (previously included as part of Investment in Cauchari-Olaroz) was recognized as a return of investment in Cauchari-Olaroz and credited against the investment in associate and the remaining $20,354 was recorded as a gain in the Company’s statement of comprehensive loss.

 

During the six months ended June 30, 2022, loans were provided by the Company to Exar Capital in the amount of $29,204, and by Ganfeng in the amount of $30,396. Such loans funded the Company’s and Ganfeng’s respective 49% and 51% shares of Cauchari-Olaroz construction costs.

 

In addition to the loans from shareholders, in Q4 2021 and Q1 2022, Minera Exar obtained debt financing in the form of loans totaling $50,000 from a third party to fund construction. The third party loans are secured with a bank letter of credit arranged by Ganfeng. The Company has in turn provided a guarantee to Ganfeng in the amount of $19,600 for the loans.

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

Investment in Cauchari-Olaroz Project

 

Changes in the Investment in Cauchari-Olaroz Project are summarized below:

 

 

In Q2 2022, certain of the loans provided by Exar Capital to Minera Exar were amended to introduce a revised repayment mechanism linked to the implied market foreign exchange rate in Argentina. This change in the loans’ terms resulted in an extinguishment of the loan and the recognition of a related loss of $113,105 (net of taxes), the Company’s share of which was $50,671. Subsequent to the amendment, the revised repayment feature gives rise to the existence of an embedded derivative which is required to be measured at fair value at each reporting date. Minera Exar incurred derivative losses of $36,648 (net of taxes), the Company’s share of which was $16,418 from the date of amendment to June 30, 2022.

 

Minera Exar’s Commitments and Contingencies

 

As at June 30, 2022, Minera Exar had the following commitments (on a 100% basis):

Los Boros Option Agreement

On September 11, 2018, Minera Exar exercised a purchase option agreement (“Option Agreement”) with Grupo Minero Los Boros (“Los Boros”), entered into on March 28, 2016, for the transfer of title to Minera Exar of certain mining properties that comprise a portion of Cauchari-Olaroz.

Under the terms of the Option Agreement, Minera Exar paid $100 upon signing and exercised the purchase option for total consideration of $12,000 to be paid in sixty quarterly installments of $200. The first installment payment became due and was paid on the third anniversary of the purchase option exercise date, being September 11, 2021. Minera Exar has paid all subsequently due quarterly installments in full.

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

As security for the transfer of title of the mining properties, Los Boros granted to Minera Exar a mortgage over the mining properties for $12,000. In addition, in accordance with the Option Agreement, on November 27, 2018, Minera Exar paid Los Boros a $300 royalty which was due within 10 days of the start date of construction of the commercial plant.

Pursuant to the Option Agreement, a 3% net profit interest royalty (the “Los Boros Royalty”) is payable to Los Boros by Minera Exar annually within 10 business days after calendar year end, in Argentinian pesos, for a period of 40 years. Minera Exar has the right to cancel the first 20 years of the Los Boros Royalty in exchange for a one-time payment of $7,000 and the second 20 years for an additional payment of $7,000. As at June 30, 2022, all required payments under the Option agreement have been made.

 

 

On January 25, 2022, Lithium Americas completed the acquisition of Millennial through the purchase of all issued and outstanding shares of Millennial at a price of CDN$4.70 per share, payable in a combination of Lithium Americas common shares and cash of CDN$0.001 per Millennial share, for total consideration of $359,729. As a term of the offer, the Company paid Millennial $20,000 as reimbursement of break fees owed under the previous acquisition agreement entered into by Millennial with a third party. The Company incurred $5,812 in other transaction costs. The transaction was accounted for as an asset acquisition.

Through Millennial, the Company owns two lithium projects in Argentina: Pastos Grandes and the Cauchari East project (“Cauchari East”, and together with Pastos Grandes, the “Millennial Projects”).

Pastos Grandes, located in the Salta province of Argentina, is a brine lithium deposit and was subject to extensive exploration and evaluation efforts pre-acquisition. Cauchari East is located adjacent to Cauchari-Olaroz in the Province of Jujuy in Argentina, with only limited exploration, evaluation and permitting work completed to date.

Consideration for the purchase is as follows:

 

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

The allocation of the purchase price to the assets acquired and liabilities assumed is based upon estimated fair values at the date of acquisition as set out below:

 

 

 

 

 

 

 

 

 

 

 

¹ The “Other” category includes right of use assets with a cost of $4,607 and $1,216 of accumulated depreciation as at June 30, 2022.

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

 

Exploration and evaluation assets were as follows:

 

 

 

The Company has certain commitments for royalty and other payments to be made on the Thacker Pass project and Pastos Grandes project as set out below. These amounts will only be payable if the Company continues to hold the subject claims in the future and the royalties will only be incurred if the Company starts production from the respective projects.  

 

Thacker Pass:

 

Pastos Grandes:

 

 

On December 6, 2021, the Company closed an offering of $225,000 aggregate principal amount of 1.75% convertible senior notes due in 2027 (the “Convertible Notes”, “Notes” and the “Offering”). The Company used a portion of the net proceeds from the Offering to repay in full its $205,000 senior secured credit facility. On December 9, 2021, the initial purchasers under the Offering exercised in full their option to purchase up to an additional $33,750 aggregate principal amount of the Convertible Notes, increasing the total Offering size to $258,750.

The Convertible Notes represent financial instruments that include a debt host accounted for at amortized cost and conversion option and redemption option derivatives, which are separated from the debt host and accounted for at fair value with changes in fair value recorded in the statement of comprehensive loss.

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

 

 

The fair value of the derivatives was estimated using a partial differential equation method with Monte Carlo simulation with the following inputs: volatility of 75%, a risk-free rate of 3.08%, expected dividend of 0%, and credit spread of 10.50%. A gain on change in fair value for the six months ended June 30, 2022, of $31,230 was recognized in the statement of comprehensive loss. Accrued interest for the six months ended June 30, 2022, of $9,920 was recognized as finance costs in the statement of comprehensive loss.

Valuation of the embedded derivative is highly sensitive to changes in the Company’s share price and the assumed volatility of the Company’s share price. The significant gain on change in fair value of the derivative in Q2 2022 was driven by changes in the underlying valuation assumptions, including a decrease as at June 30, 2022 compared to December 31, 2021, of the Company's market share price from $29.12 to $20.13 and an increase in the risk-free interest rate from 1.37% to 3.08%, partially offset by an increase in the volatility assumption from 65% to 75%.

A reduction in the volatility rate by 20% would result in a corresponding reduction of the embedded derivative value by 30%, while a reduction/increase of the share price by 10% would result in a corresponding reduction/increase of the embedded derivative value by 14% and 15% respectively.

The Convertible Notes are unsecured and accrue interest payable semi-annually in arrears at a rate of 1.75% per annum payable on January 15 and July 15 of each year, beginning on July 15, 2022. Prior to October 15, 2026, the Notes are convertible at the option of the holders during certain periods, upon the satisfaction of certain conditions including:

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

Thereafter, the Convertible Notes will be convertible at any time until the close of business on the business day immediately preceding the maturity date. Upon conversion, the Convertible Notes may be settled, at the Company’s election, in common shares of the Company, cash or a combination thereof. The initial conversion rate for the Convertible Notes will be 21.2307 shares per one thousand principal amount of Convertible Notes, equivalent to an initial conversion price of approximately $47.10 per share.

The Convertible Notes mature on January 15, 2027, unless earlier repurchased, redeemed or converted. The Company may not redeem the Convertible Notes prior to December 6, 2024, except upon the occurrence of certain changes to the laws governing Canadian withholding taxes. After December 6, 2024, the Company has the right to redeem the Convertible Notes at its option in certain circumstances including:

Redemption can result in exercisability of the conversion option.

Holders of Convertible Notes have the right to require the Company to repurchase their Convertible Notes upon the occurrence of certain events.

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

 

 

Limited Recourse Loan Facility

In October 2018, Ganfeng provided Lithium Americas with a $100,000 unsecured, limited recourse, subordinated loan facility (the “Limited Recourse Loan Facility”) bearing an interest rate of 6-month LIBOR plus 5.5% (subject to an aggregate maximum interest rate of 10% per annum). The loan facility is repayable in an amount of 50% of Minera Exar’s Free Cash Flows (as defined in the credit facility agreement).

In Q1 2022, the Limited Recourse Loan Facility balance and accumulated interest were repaid. The remaining undrawn available balance under the facility is $75,000.

 

Other liabilities consist of $2,515 in lease liabilities and $5,937 in mining contractor liability. The mining contractor liability balance includes $3,500 received by Lithium Nevada from a mining contractor pursuant to a mining design, consulting and mining operations service agreement for Thacker Pass entered into by Lithium Nevada in Q2 2019.

As an additional term of the agreement, Lithium Nevada will pay a success fee to the mining contractor of $4,650 upon achieving certain commercial mining milestones or repay the $3,500 advance without interest if a final project construction decision is not made by December 2024.

Mining design and consulting services rendered by the mining contractor to date, are accrued and included in the mining contractor liability balance. Such amounts are payable on or before the earlier of December 31, 2024, or 90 days after the start of production at Thacker Pass.

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

Share Capital

On January 25, 2022, the Company closed the acquisition of 100% of Millennial and issued 13,199 shares to Millennial shareholders.

On January 22, 2021, Lithium Americas closed an underwritten public offering of 18,182 shares, including 2,273 shares following the exercise in full by the underwriters of their over-allotment option.

The shares were issued at a price of $22.00 each for gross proceeds to the Company of approximately $400,000. Share issuance costs were $22,609.

Equity Incentive Plan

The Company has an equity incentive plan (“Plan”) in accordance with the policies of the TSX whereby, from time to time, under the Company’s current equity compensation program and at the discretion of the Board of Directors, eligible directors, officers, employees and consultants are awarded restricted share units (“RSUs”) and performance share units (“PSUs”) that, subject to a recipient’s deferral right in accordance with the Income Tax Act (Canada), convert automatically into common shares upon vesting. In addition, independent directors are awarded deferred share units (“DSUs”), generally as partial compensation for their services as directors. DSUs may be redeemed by directors for common shares upon retirement or termination from the Board. The Plan also permits the grant of incentive stock options exercisable to purchase common shares of the Company (“stock options”); however, generally the Company has granted RSUs, PSUs and DSUs over stock options under its equity compensation program since 2018. The Plan is a “fixed plan” pursuant to which the aggregate number of common shares to be issued shall not exceed 16% of the Company’s issued and outstanding common shares as of April 1, 2020, or 14,401 shares.

Restricted Share Units

During the six months ended June 30, 2022, the Company granted 135 (2021 – 250) RSUs to its employees and consultants. The total estimated fair value of the RSUs was $3,343 (2021 – $3,366) based on the market value of the Company’s shares on the grant date. As at June 30, 2022, there was $2,393 (2021 – $1,517) of total unamortized compensation cost relating to unvested RSUs. During the six months ended June 30, 2022, stock-based compensation expense related to RSUs of $720 was charged to expenses (2021 – $917).

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

A summary of changes to the number of outstanding RSUs is as follows:

 

Deferred Share Units

During the six months ended June 30, 2022, the Company granted 9 DSUs (2021 – 12) as compensation to independent directors with a total estimated fair value of $289 (2021 – $162).

 

 

Stock Options

No stock options were granted by the Company during the six months ended June 30, 2022 and 2021. Stock options outstanding and exercisable as at June 30, 2022 are as follows:

 

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

 

A summary of changes to outstanding stock options is as follows:

 

 

The weighted average share price at the time of exercise of stock options during six months ended June 30, 2022 was CDN$39.32 (2021 – CDN$20.00). During the six months ended June 30, 2022, 265 (2021 – 280) stock options were exercised under the cashless exercise provision of the Plan, resulting in the issuance of 234 (2020 – 233) shares of the Company.

 

Performance Share Units (“PSUs”)

 

73 PSUs were granted by the Company during the six months ended June 30, 2022 (2021 – 162). As at June 30, 2022, there was $3,921 (2021 - $3,154) of total unamortized compensation cost relating to unvested PSUs.

 

The fair value of the PSUs is estimated on the date of grant using a valuation model based on Monte Carlo simulation with the following assumptions used for the grants made during the period:

 

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

 

During the six months ended June 30, 2022, equity compensation expense related to PSUs of $837 was charged to operating expenses (2021 - $1,383). A summary of changes to the number of outstanding PSUs is as follows:

 

 

 

 

Minera Exar, the Company’s equity-accounted investee, has entered into the following transactions with companies controlled by the family of its president, who is also a director of Lithium Americas:

During the six months ended June 30, 2022, director’s fees paid by Minera Exar to its president, who is also a director of Lithium Americas, totaled $37 (2021 - $37)

In Q1 2022, Minera Exar entered into a service agreement with a consortium owned 49% by a company controlled by the family of its President, who is also a director of Lithium Americas. The agreement is for servicing of the evaporation ponds at Cauchari-Olaroz over a five-year term, for total consideration of $94,000 (excluding VAT).

The amounts due by Minera Exar to related parties arising from such transactions are unsecured, non-interest bearing and have no specific terms of payment. Transactions with Ganfeng, a related party of the Company by virtue of its position as a shareholder of the Company, are disclosed in Notes 7 and 12.

 

Compensation of Key Management

Key management includes the Company’s board of directors, and the executive management team. The remuneration of directors and members of the executive management team was as follows:

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

 

 

 

 

 

 

The following table summarizes the Company’s general and administrative expenses:  

 

 

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

The following table summarizes the Company’s exploration and evaluation expenditures:

 

 

 

 

The Company operates in four operating segments in three geographical areas. The Millennial Projects operating segment was added upon acquisition of these projects in Q1 2022.

The Thacker Pass and Millennial Projects are in the exploration and evaluation stage and the Cauchari-Olaroz Project is in the development stage. The Organoclay segment, classified as a discontinued operation in 2021, was wound up in 2019 and its assets were sold in Q1 2021.

The Company’s reportable segments are summarized in the following tables:

 

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

 

 

 

 

The Company’s non-current assets are segmented geographically as follows:

 

 

 

¹ Non-current assets attributed to geographical locations exclude financial and other assets.

 

 

 

Supplementary disclosure of the Company’s transactions is provided in the table below.

 

 

 

 

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

Financial instruments recorded at fair value on the consolidated statements of financial position and presented in fair value disclosures are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.  The fair value hierarchy has the following levels:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for assets or liabilities, either directly or indirectly; and

Level 3 – Inputs for assets and liabilities that are not based on observable market data.

The fair value hierarchy requires the use of observable market inputs whenever such inputs exist.  A financial instrument is classified in the lowest level of the hierarchy for which a significant input has been considered in measuring fair value. Other than warrants acquired as part of the Arena Minerals investment, common shares acquired as part of the Green Technology Metals investment and the convertible note derivative the Company, did not have any financial instruments measured at fair value on the statement of financial position on a recurring basis. As at June 30, 2022, the fair value of financial instruments not measured at fair value approximate their carrying value. Green Technology shares are classified at level 1 of the fair value hierarchy, and Arena Minerals warrants and convertible note derivatives are classified at level 2 of the fair value hierarchy (refer to Note 5, 6 and 11).

The Company manages risks to minimize potential losses. The main objective of the Company’s risk management process is to ensure that the risks are properly identified and monitored, and that the capital base maintained by the Company is adequate in relation to those risks.  The principal risks which impact the Company’s financial instruments are described below.

Credit Risk

Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, receivables, long-term receivable from JEMSE, and loans to Exar Capital. The Company’s maximum exposure to credit risk for cash, cash equivalents, receivables, long-term receivable from JEMSE, and loans to Exar Capital is the amount disclosed in the consolidated statements of financial position. The Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions and invests only in short-term obligations that are guaranteed by the Canadian government or by Canadian and US chartered banks with expected credit losses estimated to be de minimis. The Company and its subsidiaries and investees including Minera Exar, may from time to time make short-term investments into Argentinian government securities, financial instruments guaranteed by Argentinian banks and other Argentine securities. These investments may or may not realize short-term gains or losses.

Management believes that the credit risk concentration with respect to financial instruments included in cash, cash equivalents, receivables, long-term receivable from JEMSE, and loans to Exar Capital is nominal.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.  The Company’s approach to managing liquidity is to evaluate current and expected liquidity requirements under both normal and stressed conditions to estimate and maintain sufficient reserves of cash and cash equivalents to meet its liquidity requirements in the short and long-term.

 

 

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LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

As the industry in which the Company operates is very capital intensive, the majority of the Company’s spending or that of its investees is related to capital programs.

The Company prepares annual budgets, which are regularly monitored and updated as considered necessary. As at June 30, 2022, the Company had a cash and cash equivalents balance of $440,821 to settle current liabilities of $10,094.

The following table summarizes the contractual maturities of the Company’s financial liabilities on an undiscounted basis:

 

 

^¹Include principal and interest/finance charges.

Market Risk

Market risk incorporates a range of risks. Movement in risk factors, such as market price risk, the Company’s share price, and currency risk, affects the fair values of financial assets and liabilities. The Company is exposed to foreign currency risk as described below.  

Foreign Currency Risk

The Company’s operations in foreign countries are subject to currency fluctuations and such fluctuations may affect the Company’s financial results. The Company reports its financial results in United States dollars (“US$”) and incurs expenditures in Canadian dollars (“CDN$”), Argentine Pesos (“ARS$”) and US$, with the majority of the expenditures being incurred in US$ by the Company’s subsidiaries and investees. The Company and its subsidiaries and associates have a US$ functional currency. As at June 30, 2022, the Company held $2,464 and $191 in CDN$ and ARS$ denominated cash and cash equivalents respectively. Strengthening/(weakening) of a US$ exchange rate versus CDN$ and ARS$ by 10% would have resulted in a foreign exchange (loss)/gain for the Company of $246 and $2 respectively at June 30, 2022.

 

 

On July 15, 2022, the Company paid interest of $2,755 due under its Convertible Notes.

 

 

 

Exhibit 99.2

 

 

Logo MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE SIX MONTHS ENDED JUNE 30, 2022 (Expressed in US Dollars)

 

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

 

BACKGROUND

This Management’s Discussion and Analysis dated as of July 28, 2022 (“MD&A”) of Lithium Americas Corp. (“Lithium Americas”, the “Company”, or “LAC”), should be read in conjunction with the Company’s unaudited condensed consolidated interim financial statements and the notes thereto for the six months ended June 30, 2022 (“Q2 2022 financial statements”), and the audited consolidated financial statements and notes thereto for the year ended December 31, 2021 (“2021 annual financial statements”). Refer to Notes 2 and 3 of the Q2 2022 financial statements and Note 2 and 3 of the 2021 annual financial statements for disclosure of the Company’s significant accounting policies. All amounts are expressed in US dollars, unless otherwise stated. References to CDN$ are to Canadian dollars. This MD&A contains “forward-looking statements,” and readers should read the cautionary note contained in the section entitled “Forward-Looking Statements” of this MD&A regarding such forward-looking statements.

OUR BUSINESS

Lithium Americas Corp. is a Canadian-based resource company focused on the advancement of significant lithium projects: the Caucharí-Olaroz project (“Caucharí-Olaroz”), located in Jujuy province in the north-western region of Argentina, the Thacker Pass project (“Thacker Pass”), located in north-western Nevada, USA and the Pastos Grandes project, located in Salta Province of Argentina (“Pastos Grandes”). Caucharí-Olaroz is a lithium brine project located in the Salar de Olaroz and the Salar de Caucharí. The Company owns 44.8% of Caucharí-Olaroz through its ownership interest in Minera Exar S.A. (“Minera Exar”), a company incorporated under the laws of Argentina. Thacker Pass is a sedimentary-based lithium property located in the McDermitt Caldera in Humboldt County, Nevada. The Company owns 100% of Thacker Pass through its wholly-owned subsidiary, Lithium Nevada Corp. (“Lithium Nevada”). On January 25, 2022, the Company acquired Millennial Lithium Corp. (“Millennial”) and added its Argentinean lithium project Pastos Grandes to its pipeline of projects.

The Company’s head office and principal address is Suite 300, 900 West Hastings Street, Vancouver, British Columbia, Canada, V6C 1E5. The Company trades in Canada on the Toronto Stock Exchange (“TSX”) and in the United States on the New York Stock Exchange (“NYSE”) under the symbol “LAC”. The Company operates in the United States through its wholly-owned subsidiary, Lithium Nevada. The Company’s operations concerning Caucharí-Olaroz are conducted in Argentina and the Netherlands through equity investees Minera Exar and Exar Capital B.V. (“Exar Capital”) respectively, which are governed by a shareholders’ agreement between the Company and Ganfeng Lithium Co. Ltd. (“Ganfeng”). The Company and Ganfeng collectively own 91.5% of Minera Exar (Caucharí-Olaroz) and 100% of Exar Capital B.V. (a Netherlands entity that provides funding to Minera Exar). For Pastos Grandes, the Company conducts operations through its wholly-owned subsidiaries, Millennial in Canada and Proyecto Pastos Grandes S.A. in Argentina. Additional information relating to the Company, including the Company’s Annual Information Form (“AIF”), is available on SEDAR at www.sedar.com.

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

HIGHLIGHTS

Argentina

Caucharí-Olaroz

Pastos Grandes

United States  

Thacker Pass

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

Corporate

 

 

 

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

 

PROJECT PROGRESS IN Q2 2022

Caucharí-Olaroz, Jujuy Province, Argentina

 

 

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

 

COVID-19

The Company continues to closely monitor the situation as workers continue to adhere to strict bio-security protocols. As of the date of this MD&A, mining and construction activities are permissible in the Province of Jujuy, subject to meeting certain health protocols. COVID-19 restrictions continue to impact the resumption of full construction activities, particularly as a result of domestic restrictions in the locations of the project’s international vendors.

 

To date, over 99% have received three to four doses of a COVID-19 vaccine.  

Health and Safety

The Total Recordable Incident Frequency rate (“TRIFR”) for Caucharí-Olaroz as at June 30, 2022 was 1.50 per 200,000 hours worked. In late May 2022, the project team achieved an important safety milestone of 6,000,000 total person hours without a lost time injury incident, with no lost time incidents thereafter.

Construction Progress

Evaporation Ponds and Production Wells

Earthworks for the 12 km² of planned solar evaporation ponds are 100% complete, and liner installation is 100% complete as well. Currently, there are 40 production wells drilled. As of the date of this MD&A, approximately 22.2 million cubic meters (“m³”) of brine have been pumped into the ponds for initial evaporation and process testing. Pond harvesting to service the evaporation ponds and to remove salt deposited at the bottom of the pond continued in Q2 2022.

 

With construction over 90% complete, focus has shifted to prioritize production over completion of all purification circuits. As a result, a portion of the purification process designed to achieve battery-quality is being deferred until early 2023.

 

Infrastructure

 

Lithium Carbonate Plant

 

Capital Expenditures

 

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

 

Project Financing and Liquidity

As of June 30, 2022, the Company’s 49% share ($43 million) of the remaining capital budget is anticipated to be fully funded from the Company’s cash balance. In Q4 2021 and Q1 2022, Minera Exar obtained $50 million in third-party loans that were secured or guaranteed by Lithium Americas and/or Ganfeng to fund project construction. Minera Exar is seeking to enter into additional loan arrangements of a similar nature in the future.

 

Stage 2 Expansion

Development analysis on a Stage 2 expansion of at least an additional 20,000 tpa LCE continues to advance, in partnership with Ganfeng, with a drilling program of 14 wells underway.

 

Minera Exar 2021 Sustainability Report

In late July, Minera Exar published a 2021 Sustainability Report, available in Spanish only, reporting on sustainability management approaches and performance at Cauchari-Olaroz for the period January 1, 2021 to December 31, 2021. A translated English version will be made available on Lithium Americas webpage in Q3 2022.

 

Thacker Pass, Nevada, USA

 

COVID-19

The Company continues to follow applicable state-wide COVID-19 restrictions and protocols. Workers who develop symptoms of the virus are asked to work from home until their symptoms clear and follow the U.S. Centers for Disease Control (CDC) guidance on testing.

Lithium Technical Development Center

The Company has completed construction of a new integrated Lithium Technical Development Center in Reno, Nevada to demonstrate the full Thacker Pass flowsheet and to produce battery-quality lithium carbonate samples for potential customers and partners. The LiTDC will also support ongoing optimization work and confirm assumptions in the design and operational parameters.

 

The 30,000 ft² facility contains a state-of-the-art analytical laboratory capable of analyzing ultra-pure lithium compounds and has been designed to conduct test work on new target ores and brines. Lithium Americas and the University of Nevada, Reno are collaborating on this commercial work, while also educating the next generation of engineers and researchers who will play an essential role in curbing harmful carbon emissions.

 

The LiTDC’s initial production, using the Thacker Pass flowsheet and sedimentary resources from the project site, successfully produced five kilograms of battery-quality lithium carbonate. In addition to generating sample material, the facility will enable the team to continually optimize and de-risk each step of the flowsheet.

 

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

 

Figure E: Lithium Technical Development Center ribbon cutting event of July 20, 2022. In photo front left to right: Brian Sandoval, University of Nevada, Reno President; Jonathan Evans, President & CEO; Steve Sisolak, Governor of Nevada; Little Star Abel; Maria Anderson, the Company’s Community Relations Manager; members of the Fort McDermitt Paiute and Shoshone Tribe; and Lithium Americas’ staff.

Financing and Partnership Process

In April 2022, the Company submitted a formal application to the DOE’s Loans Program Office to be used at Thacker Pass through the ATVM loan program. The ATVM Loan Program is designed to provide loans for facilities located in the United States for the manufacturing of advanced technology vehicles and qualifying components used in those vehicles.

 

In addition to potential funding from the DOE, the Company is exploring other complementary funding, offtake and partnership alternatives. As previously announced in February 2022, the Company continues to explore a separation of its US and Argentina operations. While no final decision has been made, the Company is exploring structuring alternatives that could be used to effect a separation.

Process Engineering and Design

Feasibility Study for Phase 1 and 2

Lithium Americas continues to advance a feasibility study (“Feasibility Study”) targeting an initial production capacity of 40,000 tonnes per annum (“tpa”) of lithium carbonate (“Phase 1”) with a second stage expansion targeting a total production capacity of 80,000 tpa (“Phase 2”). Capital costs are expected to substantially increase from the estimates in the 2018 pre-feasibility study due to processing and related infrastructure changes and the results of engineering and testing, incorporation of increased capacity, as well as external factors such as inflationary pressures and supply chain considerations. Results of the Feasibility Study are expected in the second half of 2022, to align with the strategic partnership and financing process and ongoing engineering and process testwork at the LiTDC.

 

Design and Operating Updates

The Company has made significant progress in its understanding of the development and operational parameters at Thacker Pass since publishing the pre-feasibility study (“PFS”) in late 2018, including design, size and scope of

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

facilities and supporting infrastructure, as well as the nature and use of inputs, reagents and processing procedures. Work on the Feasibility Study continues, and the Company expects there will be several marked differences between the PFS and the Feasibility Study in respect of the development plan and operations. Some of the most significant differences are expected to include:

 

Financial Performance Estimates

The capital cost and operating cost estimates set out in the PFS are expected to be substantially different in the contemplated Feasibility Study. The Company expects that there will be a significant increase in the capital cost estimate. The additional infrastructure and processing steps as contemplated by the updated planning for development and operations noted above will, on their own, result in a capital cost that is expected to greatly exceed that contemplated as the base case under the PFS, even assuming a comparable production scale. The increase in scale of production will result in a further increase in capital cost. Finally, external factors since the date of the PFS, including inflationary effects and supply chain issues, will result in significantly higher capital costs. The Company also expects that there will be a significant increase in operating costs compared to that set out in the PFS, as a result of the additional infrastructure, processing and input requirements that are contemplated for the operation, as well as external effects such as inflation, wage increases and supply chain limitations. These cost increases are expected to be offset, in some measure, by revenue increases from a higher production rate and higher long-term pricing assumptions for lithium-based products, although the extent to which all of these factors, among others, will ultimately impact the financial performance of Thacker Pass cannot be verified with any certainty until such time as an updated mine plan, and in particular the contemplated Feasibility Study, has been completed.

 

EPCM Contract

The Company has issued a RFP for an EPCM contract for Phase 1. The awarding of the EPCM contract is part of a rigorous and competitive tender process involving multiple globally recognized industry firms.

Regulatory and Permitting

The Company is on track to begin early-works construction in 2022. All state and federal permits necessary to commence construction are in place. The federal appeal of the ROD is ongoing with briefings scheduled to end on August 11, 2022, and oral arguments and a final decision expected to follow shortly thereafter.

 

In June 2022, the Nevada State Environmental Commission upheld the Company’s approved Water Pollution Control Permit by denying an appeal in a 5-0 ruling. Cultural assessment and mitigation required as part of the ROD was successfully completed in mid-July by the Company’s consultant and Fort McDermitt Paiute and Shoshone Tribe (“Tribe”) members. Completion of this important archeological assessment and mitigation work is a key milestone in moving towards the commencement of construction.  

 

A decision on the Company’s water rights transfer application by the state engineer to transfer the Company’s existing and optioned water rights, which is expected to provide sufficient water for all of Phase 1, is anticipated later in 2022.  The Company has recently commenced the process of negotiating additional water rights expected to be required for Phase 2 operations.

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

Social Responsibility

Lithium Americas remains committed to engaging with key stakeholders throughout the lifecycle of our projects to better understand and address their interests and concerns, and to advance our shared priorities. The Company continues to collaboratively work with the Tribe and communities closest to Thacker Pass towards mutually beneficial relationships.

 

Fort McDermitt Paiute and Shoshone Tribe

The Company’s engagement plan includes regular consultation with the Tribe, which is the closest tribe to the project site. The Company is committed to providing community benefits, skills training and employment opportunities to the tribe as the project advances towards construction.

 

Building on several years of engagement and understanding of community needs, the Company has provided the Tribe with a draft benefits agreement that consists of infrastructure development (community center with a daycare, pre-school and cultural facilities), economic opportunities, training and employment opportunities. The agreement is the next step in the Company’s long-standing relationship with the Tribe and is under consideration.

 

Skills Training and Cultural Assessment Job Opportunities

In late 2021 and early 2022, the Company arranged for specialized cultural monitor training for Tribe members. Pursuant to an Archaeological Resources Protection Act Permit issued by the Bureau of Land Management (“BLM”), the cultural assessment and mitigation work commenced in April 2022 and successfully concluded in mid-July 2022. Eleven Tribe members were hired to work in collaboration with Far Western Anthropological Research Group to ensure strict standards were followed, and Native American interests were respected during the archeological mitigation work.

 

Community Engagement  

The Company continues to actively participate in the local community Negotiating Work Group, consisting of representatives of the local community Thacker Pass Concerned Citizens Group. The purpose of the Work Group is to develop agreements supported by scientific data and community buy-in to guide the construction and operations of Thacker Pass.

 

Initiative for Responsible Mining Assurance (IRMA) 

Lithium Americas is a Pending Member of IRMA - the Initiative for Responsible Mining Assurance. In H1 2022, the Company worked with IRMA to pilot their new draft IRMA-Ready Standard for Responsible Mineral Exploration and Development. 

Environmental Stewardship

Lithium Americas is committed to minimizing the expected environmental footprint of Thacker Pass by incorporating the environmental best practices and going beyond what is required by regulatory standards. The Company is designing Thacker Pass to be a low-carbon, low-water utilization lithium operation, and has been working with a leading international environmental engineering consulting firm to develop the expected operational carbon and water intensities.

 

2021 ESG-S Report

Lithium Americas recently published a 2021 Environment, Social, Governance and Safety (“ESG-S”) Report themed Enabling Transition, reaffirming the Company’s commitment to responsible development and production, as well as highlighting the Company’s ESG-S practices and overall progress made over the past two years (reporting period of January 1, 2020 to December 31, 2021). The full report is available at www.lithiumamericas.com/esg. The scope of the ESG-S Report includes the activities and interests of Lithium Americas and the wholly-owned Thacker Pass project. The Caucharí-Olaroz project is not included in the scope of this report, however, contextual information is shared on its construction stage.

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

Pastos Grandes, Argentina

Development Plan

In June 2022, the Company approved a development plan and a budget of approximately $30 million to advance Pastos Grandes towards a construction decision. The plan includes field work with respect to the brine and water to verify the assumptions behind the brine production base case, test works of technology alternatives to compare with the processing base case, a review of the land use possibilities to support industrial scale construction and operations and completing basic engineering to support an investment decision.

 

In addition, the plan and budget consider improvement of site facilities, which include a fully operative camp with energy supplied from a solar power hybrid system, a laboratory, a production well, solar evaporation ponds, a liming plant, and a pilot plant for processing concentrated brine into lithium carbonate of battery quality.

 

The plan also considers complementing the existing workforce of 42 persons with professionals for key roles, advancing the development of the project into engineering, construction and operation phases.

Health and Safety, Environmental

Pastos Grandes site has achieved 200 days without accidents. No COVID-19 cases were registered since the Company took over the operation in early 2022. More than 95% of the employees received three or four doses of COVID-19 vaccine.

 

Social Responsibility

Over the years, the Pastos Grandes team has developed a good relationship with the nearby community of Santa Rosa de los Pastos Grandes, by being a supportive and inclusive neighbor. Recently, the Company’s Argentine management met with the local project team and community to reiterate the Company’s commitment to responsible resource development.

Other investments

Arena Minerals - Sal de la Puna project

A Technical Cooperation Agreement was signed with Arena Minerals in April 2022. The Agreement considers sharing of information, coordination of exploration and development works, and grants the Company access to Arena’s tenements for studies of the water system. This will accelerate development for both the Pastos Grandes and Sal de la Puna projects and applies a systemic approach over the resources.

Green Technology Metals

On April 28, 2022, the Company entered into an agreement to acquire shares of Green Technology Metals, a North American focused lithium exploration and development company with hard rock spodumene assets in north-west Ontario, Canada, in a private placement for total consideration of $10 million, or approximately 5% of Green Technology Metals’ issued and outstanding shares following closing of the share placement.

In addition to its $10 million placement, Lithium Americas has entered into a non-binding Collaboration Framework with Green Technology Metals to advance evaluation of a strategically located, integrated lithium chemicals business in North America. For additional details about the Green Technology Metals acquisition, please refer to Note 5 “Investment in Green Technology Metals” of the Company’s Q2 2022 Financial Statements available on SEDAR and the news release issued by the Company on April 28, 2022.

 

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

 

SELECTED FINANCIAL INFORMATION

Quarterly Information

Selected consolidated financial information is as follows:

 

 

Notes:

Changes in the Company’s total assets, working capital, liabilities and results were driven mainly by financings, M&A transactions, increases in loans and contributions to Caucharí-Olaroz, expenses in the period, changes in fair value of convertible senior notes derivative liability and the Company’s share of results of Caucharí-Olaroz.

In Q2 2022, total assets decreased primarily due to the expenses in the period, the Company’s share of loss of Caucharí-Olaroz of $71.5 million, a loss on fair value of Arena Minerals warrants of $3.8 million and a loss on fair value of Green Technology Metals shares of $4.2 million. Total liabilities decreased primarily due to decrease in fair value of the convertible senior notes derivative liability by $81.6 million, offset by accrued interest on convertible senior notes of $2.5 million.

In Q1 2022, total assets and total liabilities increased primarily due to the acquisition of Millennial, a $50.3 million increase in fair value of convertible senior notes derivative liability, offset by a repayment of $24.7 million limited recourse loan facility balance and accumulated interest.

In Q4 2021, total assets, working capital and total liabilities increased primarily due to the $250 million in net proceeds raised from the convertible senior notes, and the $59 million drawdown on the senior credit facility, which were partially offset by full repayment of the $205 million senior credit facility.

In Q1 2021, total assets and working capital increased primarily due to the $377 million in net proceeds raised from the underwritten equity offering.

In Q4 2020, total assets and working capital increased primarily due to $97 million in net proceeds from an at-the-market equity program.

In Q3 2020, total assets, property, plant and equipment and liabilities decreased primarily as a result of derecognizing the Company’s 50% share of Minera Exar’s assets and liabilities and Exar Capital’s borrowings, partially offset by $40 million in cash received upon repayment of loans as part of the transaction with Ganfeng which closed on August 26, 2020.

 

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

 

Results of Operations – Net Loss Analysis

Six Months Ended June 30, 2022 versus Six Months Ended June 30, 2021

The following table summarizes the items that resulted in an increase in net loss for the six months ended June 30, 2022 (“Q2 2022”) versus the six months ended June 30, 2021 (“Q2 2021”), as well as certain offsetting items:

 

 

 

Higher net loss during the six months ended June 30, 2022, is primarily attributable to:

 

Higher loss was partially offset by:

 

Expenses

Exploration and evaluation expenditures for the six months ended June 30, 2022, of $23.0 million (2021 – $13.5 million) include expenditures incurred for Thacker Pass and Pastos Grandes. The increase in the Company’s exploration expenditures is mostly due to higher engineering, permitting and feasibility study-related costs incurred during Q2 2022 and the timing of permitting and other expenditures on the project.

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

Equity compensation for the six months ended June 30, 2022 of $1.6 million (2021 - $2.3 million) is a non-cash expense and consists of $0.7 million (2021 - $0.9 million) fair market value of RSUs, and the $0.9 million (2021 - $1.4 million) fair value of PSUs vested during the period. Lower equity compensation during the six months ended June 30, 2022 was mainly due to the lower number of RSUs, PSUs and DSUs granted in the current year.

Included in general and administrative expenses during the six months ended June 30, 2022, of $8.7 million (2021 - $4.9 million) are:

 

Other Items

Gain on change in fair value of convertible notes derivative of $31.2 million was driven by changes in the underlying valuation assumptions as at June 30, 2022, including a decrease as at June 30, 2022 compared to December 31, 2021, of the Company's market share price from $29.12 to $20.13 and an increase in the risk-free interest rate from 1.37% to 3.08%, partially offset by an increase in the volatility assumption from 65% to 75%. The fair value of the derivatives was estimated using a partial differential equation method with Monte Carlo simulation.

Finance and other income during the six months ended June 30, 2022 was $8.6 million (2021 - $2.4 million) and includes mainly interest income on the Company’s loans to Exar Capital and cash and cash equivalents.

 

Three Months Ended June 30, 2022 versus Three Months Ended June 30, 2021

The following table summarizes the items that resulted in a decrease in net loss for the three months ended June 30, 2022 (“Q2 2022”) versus the three months ended June 30, 2021 (“Q2 2021”), as well as certain offsetting items:

 

 

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

 

Higher net loss in Q2 2022 is primarily attributable to:

 

Higher loss was partially offset by:

 

Expenses

Exploration and evaluation expenditures for Q2 2022 of $12.8 million (2021 – $8.8 million) include mostly expenditures incurred for Thacker Pass and Pastos Grandes. The increase in the Company’s exploration and evaluation expenditures is mostly due to higher permitting, engineering, and feasibility study-related preparation costs.

Equity compensation for Q2 2022 of $0.6 million (2021 – $1.0 million) is a non-cash expense and consists of the $0.3 million (2021 – $0.3 million) fair market value of RSUs, and $0.3 million (2021 – $0.7 million) fair value of PSUs vested during the period.

General and administrative expenses during Q2 2022 were $5.2 million (2021 – $2.6 million), an increase due to increased corporate activities.

Other Items

Gain on change in fair value of convertible notes derivative of $81.6 million was driven by changes in the underlying valuation assumptions as at June 30, 2022, including a decrease as at June 30, 2022 compared to March 31, 2022, of the Company's market share price from $38.49 to $20.13 and an increase in the risk-free interest rate from 2.53% to 3.08%. The fair value of the derivatives was estimated using a partial differential equation method with Monte Carlo simulation.

In Q2 2022, certain of the loans provided by Exar Capital to Minera Exar were amended to introduce a revised repayment mechanism linked to the implied market foreign exchange rate in Argentina, which represented an embedded derivative. This change in the terms of loans resulted in an extinguishment of the loans and the recognition of a related loss, and a loss on the embedded derivative due to the Argentinean peso devaluation. The Company’s share of this loss was $67.1 million (net of tax impact).

Finance and other income during the Q2 2022 was $4.9 million (2021 – $1.2 million) and includes mainly interest income on the Company’s loans to Exar Capital and cash and cash equivalents.

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

LIQUIDITY AND CAPITAL RESOURCES

 

 

 

As at June 30, 2022, the Company had cash and cash equivalents of $440.8 million and working capital of $435.4 million, compared to cash and cash equivalents of $505.2 million and working capital of $499.4 million as at June 30, 2021.

In Q1 2022, the Company repaid its limited recourse loan facility balance and accumulated interest. The remaining undrawn available balance under the facility is $75 million.

 

Liquidity Outlook

Lithium Americas’ share of outstanding construction costs for Caucharí-Olaroz is expected to be fully funded with its cash balance. The Company has flexibility to use its own funds for its share of outstanding construction costs for Caucharí-Olaroz, subject to the use of proceeds restrictions of the recent equity offerings. In Q4 2021 and Q1 2022, Minera Exar obtained $50 million in third-party loans that were secured or guaranteed by Lithium Americas and/or Ganfeng to fund the project construction. Minera Exar is seeking to enter into additional loan arrangements of a similar nature in the future.

Thacker Pass permitting and Feasibility Study costs, as well as Pastos Grandes, costs are expected to be funded from available cash on hand. The Company continues to evaluate partnership and financing opportunities for Thacker Pass to advance and de-risk the project. The Company’s cash balance and proceeds from the at-the-market equity program (“ATM Program”) and the Underwritten Public Offering (as defined below) are expected to provide the Company with sufficient financial resources to fund Thacker Pass expenditures and general and administrative expenditures until financing of Thacker Pass is complete or at least for the next eighteen to twenty-four months.   

The timing and the amount of expenditures for Thacker Pass and Pastos Grandes are within the control of the Company due to its direct and sole ownership interests. Pursuant to the agreements governing the Caucharí-Olaroz project, decisions regarding capital budgets for the project require agreement between Lithium Americas and the project co-owner, Ganfeng.

 

On April 14, 2022, the Company submitted a formal application to the US Department of Energy for funding to be used at Thacker Pass through the Advanced Technology Vehicles Manufacturing Loan Program. The application continues to advance per the established Department of Energy review process.

The Company continues to develop its projects and does not generate revenues from operations. The Company’s capital resources are driven by the status of its projects, and its ability to compete for investor support of its projects. The Company’s access to future financing is always uncertain. There can be no assurance that the Company will be successful in having continued access to significant equity and/or debt funding. Except as disclosed, the Company does not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, its liquidity and capital resources either materially increasing or

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

decreasing at present or in the foreseeable future. The Company does not engage in currency hedging to offset any risk of currency fluctuations.

Operating Activities

Cash used in operating activities during the six months ended June 30, 2022, was $34.2 million compared to $20.0 million during the six months ended June 30, 2021. The significant components of operating activities are discussed in the Results of Operations section above.

Investing Activities

Cash used in investing activities during the six months ended June 30, 2022 was $12.9 million, compared to $28.6 million used during the six months ended June 30, 2021. During the six months ended June 30, 2022, the Company provided $29.2 million in loans to Exar Capital, invested $10.0 million in Green Technology Metals, and in relation to the Millennial acquisition, paid $5.0 million of transaction costs, $17.1 million of acquisition date payables, received $33.5 million cash and received $20 million from the release of an escrow deposit.

Financing Activities

 

Senior Convertible Notes and Loan Facility

On December 6, 2021, the Company closed an offering of $225 million aggregate principal amount of 1.75% convertible senior notes due in 2027 (the “Convertible Notes”, “Notes” and the “Offering”). On December 9, 2021, the initial purchasers under the Offering exercised, in full, their option to purchase up to an additional $33.8 million aggregate principal amount of the convertible notes, increasing the total Offering size to $258.8 million. See Note 11 of the Company’s Q2 2022 financial statements for details regarding the terms of the Notes.

The Company used a portion of the net proceeds from the Offering to repay in full its $205 million senior secured credit facility and to repay in Q1 2022, $24.7 million outstanding on its limited recourse loan facility balance. The remaining undrawn available balance under the facility is $75 million.

 

ATM Program and Underwritten Public Offering  

 

ATM Program

As of June 30, 2022, the Company used approximately $35.8 million of the $96.8 million in net proceeds from the ATM Program for general corporate and working capital purposes.

 

Underwritten Public Offering

On January 22, 2021, the Company closed an underwritten public offering (the “Underwritten Public Offering”) of 18.2 million common shares, including 2.3 million common shares under an over-allotment option, at a price of $22.00 per share, for approximate gross proceeds to the Company of $400 million. Total net proceeds of the offering, after deducting underwriters’ fees and other expenses, were approximately $377 million.

As of June 30, 2022, the Company used approximately $76.8 million of the net proceeds from the Underwritten Public Offering including $60.7 million on pre-construction and engineering costs for Thacker Pass and $16.1 million on interest expense due under the Senior Credit Facility. The balance of funds has not been deployed to date.

Although the Company intends to expend the net proceeds from the Underwritten Public Offering substantially as disclosed in the prospectus supplement for the Underwritten Public Offering, there may be circumstances where, for sound business reasons, a reallocation of funds may be prudent or necessary, and may vary materially from that set out in the supplement. In addition, management of the Company will have broad discretion with respect to the actual use of the net proceeds from the Underwritten Public Offering. See the risk factors set out in the offering prospectus supplement and the accompanying prospectus (available under the Company profile on

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

www.sedar.com and www.edgar.com) and the documents incorporated by reference therein for further details regarding factors that may cause actual use of proceeds to differ from the intended use of proceeds.

CURRENT SHARE DATA

 

Issued and outstanding securities of the Company as at the date of this MD&A were as follows:

 

 

Each of the classes of convertible securities is convertible to common shares on a one-for-one basis, except for PSUs. The number of shares issuable upon vesting of PSUs depends on the performance of the Company’s shares over a predetermined performance period as compared to a prescribed peer group of companies and can vary from zero to up to two times the number of PSUs granted. See the Company’s latest information circular on SEDAR for further details regarding the method for calculating PSU performance vesting.

RELATED PARTY TRANSACTIONS

Minera Exar, the Company’s equity accounted investee, entered into the following transactions with companies controlled by the family of its president, who is also a director of Lithium Americas:

 

During the six months ended June 30, 2022, Minera Exar paid director’s fees to its president, who is also a director of the Company, of $37 thousand (2021 – $37 thousand) (on a 100% basis).

In Q1 2022, Minera Exar entered into a service agreement with a consortium owned 49% by a company controlled by the family of its president, who is also a director of Lithium Americas. The agreement is to service the Cauchari-Olaroz evaporation ponds, has a term of five years and has a total value over that time period of $94 million.

 

In addition to the loans from shareholders, in Q1 2022, Minera Exar obtained debt financing in the form of a $40 million loan from a third party to fund construction, which loan is secured with a letter of credit provided by Ganfeng, a project co-owner. The Company has provided a guarantee to Ganfeng for its 49% proportionate interest in the loan.

The amounts due to related parties arising from the above transactions are unsecured, non-interest bearing and have no specific terms of payment.

Transactions with Ganfeng, a related party of the Company by virtue of its position as a shareholder and a lender to the Company, are disclosed in Notes 7 and 12 of the Company’s financial statements for six months ended June 30, 2022 filed on SEDAR.

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

Compensation of Key Management

Key management includes the directors of the Company and the executive management team. The remuneration of directors and members of the executive management team was as follows:

 

 

Amounts due to directors and the executive management team as at June 30, 2022 include $0.3 million due to the independent directors of the Company for Q2 2022 directors’ fees:

 

 

CONTRACTUAL OBLIGATIONS

As at June 30, 2022, the Company had the following contractual obligations (undiscounted):

 

 

^¹ Include principal and interest/finance charges.

 

The Company’s and the Company’s equity investees’ commitments related to construction activities, royalties, option payments and annual fees to the aboriginal communities are disclosed in Note 7 of the Q2 2022 financial statements (filed on SEDAR), most of which will be incurred in the future if the Company continues to hold the subject property, continues construction, or starts production.

FINANCIAL INSTRUMENTS

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

All of the Company’s financial instruments are classified into financial assets and liabilities measured at amortized cost, other than the warrants to purchase Arena Minerals shares, shares acquired as part of the investment in Green Technology Metals and the embedded derivatives in the convertible notes which are carried at fair value. All financial instruments are initially measured at fair value plus, in the case of items measured at amortized cost, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

Financial assets are measured at amortized cost if they are held for the collection of contractual cash flows where those cash flows solely represent payments of principal and interest. The Company’s intent is to hold these financial assets in order to collect contractual cash flows. The contractual terms give rise to cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding.

The Company assesses on a forward-looking basis the expected credit losses associated with its financial assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

The Company and its subsidiaries, as well as its investee Minera Exar, may from time to time make short-term investments into Argentinian government securities, financial instruments guaranteed by Argentinian banks and other Argentine securities. These investments may or may not realize short term gains or losses.

For additional details about the Company’s financial instruments please refer to the Note 20 “Financial instruments” of the Company’s financial statements for the six months ended June 30, 2022 filed on SEDAR.

OFF-BALANCE SHEET ARRANGEMENTS

The Company’s off-balance sheet arrangements related to its guarantee with respect to the loans provided to Minera Exar are disclosed in Note 7 of the Company’s financial statements for the six months ended June 30, 2022 filed on SEDAR.

DECOMMISSIONING PROVISION AND RECLAMATION BOND

The carrying value of the liability for decommissioning that arose to date as a result of exploration activities is $0.3 million for Thacker Pass, as at June 30, 2022. The Company’s $1.4 million reclamation bond payable to the BLM was guaranteed by a third-party insurance company. The current approved reclamation cost estimate for the October 15, 2021, Thacker Pass plan of operations is $47.6 million.  Financial assurance is expected to be placed with the agency prior to initiating construction.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

 

Please refer to the Company’s annual MD&A for the year ended December 31, 2021, for Critical Accounting Estimates and Judgements disclosure and Accounting Policies disclosure. The nature and amount of significant estimates and judgements made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty as well as accounting policies applied during the six months ended June 30, 2022, were substantially the same as those that management applied to the consolidated financial statements as at and for the year ended December 31, 2021, other than as described below.

COVID-19 Uncertainty

In March 2020, the World Health Organization declared a global pandemic related to COVID-19 and the impacts of the pandemic have been significant. The Company is continuing operations while protecting the safety and health of our employees, contractors, and the communities in which the Company operates in accordance with guidance from governments and public health authorities.

COVID-19 case numbers did not change significantly in Q2, 2022. The construction activities at the Caucharí-Olaroz lithium project advanced while strictly complying with COVID-19 protocols developed by Minera Exar and approved by authorities in Jujuy province where the project is located. Construction costs related to the Caucharí-Olaroz lithium project continue to be capitalized in accordance with the Company’s policy, including costs arising from construction of the project during the pandemic such as testing and quarantining of employees, rental of additional camp facilities in order to comply with social distancing requirements, and other additional contractors’ costs as a result of COVID-19 restrictions.

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

Accounting for Acquisition of Millennial

The Company accounted for the acquisition of Millennial as an asset acquisition. Significant judgment was required to determine that the application of this accounting treatment was appropriate for the transaction. This included, among others, the determination that Millennial was not considered a business under IFRS 3 - Business combinations as Millennial did not have inputs and substantive processes that can collectively contribute to the creation of outputs.

RISKS AND UNCERTAINTIES

For risks and uncertainties faced by the Company, please refer to the following disclosure documents filed on the Company’s profile on SEDAR at www.sedar.com and EDGAR at www.edgar.com: annual MD&A for the year ended December 31, 2021 in the section entitled “Risks and Uncertainties”, as well as the Annual Information Form for the year ended December 31, 2021 in the section entitled “Risk Factors”.

The Company is experiencing heightened incidence of government-related regulatory review in respect of its business operations and transactions, which it believes is attributable in large part to government policy toward the critical minerals sector, geopolitical competition among Western and non-Western governments and the multijurisdictional nature of the Company, including in particular the interconnections between Chinese and North American ownership and commercial arrangements. At this time the Company has not identified any such proceeding that it believes would result in a material adverse effect, but such proceedings could result in disruptions to the orderly course of business operations.

CHANGES IN DIRECTORS AND MANAGEMENT

In June 2022, Dr. Tom Benson was promoted to the role of Vice President, Global Exploration, having served in global exploration roles with the Company since December 2017, most recently as the Manager, Global Exploration. In his new role, Dr. Benson will oversee the Company’s exploration geology program and support the creation of new project development strategies.

TECHNICAL INFORMATION AND QUALIFIED PERSON

Detailed scientific and technical information on the Caucharí-Olaroz project can be found in the National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) technical report entitled “Updated Feasibility Study and Reserve Estimation to Support 40,000 tpa Lithium Carbonate Production at Caucharí-Olaroz Salars, Jujuy Province, Argentina” that was filed on SEDAR. The technical report has an effective date of September 30, 2020, and was prepared by Ernest Burga, P.Eng., David Burga, P.Geo., Daniel Weber, P.G., RM-SME, Anthony Sanford, Pr.Sci.Nat., and Marek Dworzanowski, CEng, PrEng., each of whom is a “Qualified Person” for the purposes of NI 43-101.

Detailed scientific and technical information on the Thacker Pass can be found in the NI 43-101 technical report dated August 1, 2018, entitled “Technical Report on the Pre-Feasibility Study for the Thacker Pass project, Humboldt County, Nevada, USA” that was filed on SEDAR. The Thacker Pass technical report has an effective date of August 1, 2018, and was prepared by Reza Ehsani, P.Eng., Louis Fourie, P.Geo., Andrew Hutson, FAusIMM, BE (Mining), Daniel Peldiak, P.Eng., Rob Spiering, P.Eng., John Young, B.Sc., SME-RM and Ken Armstrong, P.Eng., each of whom is a “Qualified Person” for the purposes of NI 43-101.

Copies of both technical reports, not included in this MD&A, are available on the Company’s website at www.lithiumamericas.com and on the Company’s SEDAR profile at www.sedar.com.

The scientific and technical information in this MD&A 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.

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

Further information about Thacker Pass, including a description of key assumptions, parameters, description of sampling methods, data verification and QA/QC programs, and methods relating to resources, and factors that may affect those estimates is available in the above-mentioned Thacker Pass technical report.  

Further information about the Caucharí-Olaroz project, including a description of key assumptions, parameters, description of sampling methods, data verification and QA/QC programs, and methods relating to resources and reserves, factors that may affect those estimates, and details regarding development and the mine plan for the project, is available in the above-mentioned Cauchari-Olaroz technical report.

USE OF NON-GAAP FINANCIAL MEASURES AND RATIOS

The Company’s financial results have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) applicable to the preparation of interim financial statements, including International Accounting Standard (“IAS”) 34, Interim Financial Reporting. This MD&A refers to a non-GAAP financial measure “working capital” which is not a measure recognized under IFRS in Canada and that does not have a standardized meaning prescribed by IFRS or by Generally Accepted Accounting Principles (GAAP) in the United States.

This non-GAAP financial measure does not have a standardized meaning under IFRS, may differ from financial measures used by other issuers, and may not be comparable to similar financial measures reported by other issuers. This financial measure has been derived from the Company’s financial statements and applied on a consistent basis as appropriate. The Company discloses this financial measure because it believes it assists readers in understanding the results of the Company’s operations and financial position and provides further information about the Company’s financial results to investors.

This measure should not be considered in isolation or used in substitute for other measures of performance prepared in accordance with IFRS.

Working capital:  the difference between current assets and current liabilities.

DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed under securities legislation is recorded, processed, summarized and reported within the time periods specified by securities regulators and include controls and procedures designed to ensure that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed under securities legislation is accumulated and communicated to the issuer’s management, including its certifying officers, as appropriate to allow timely decisions regarding required disclosure. The Company’s management designed the disclosure controls and procedures to provide reasonable assurance that material information relating to the Company, including its consolidated subsidiaries, is made known to them on a timely basis. The Company’s management believes that any disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.  

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Any system of internal control over financial reporting, no matter how well-designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. As most of our corporate office staff and many site administrative staff worked remotely in Q2 2022, we have retained documentation in electronic form as a result of remote work through this period. There have been no significant changes in our internal controls over financial reporting during the six months ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

FORWARD-LOOKING STATEMENTS

This MD&A 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. Information concerning Mineral Resource and Mineral Reserve estimates also may be deemed to be forward-looking information in that it reflects a prediction of mineralization that would be encountered if a mineral deposit were developed and mined. 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 MD&A contains forward-looking information, including, without limitation, with respect to the following matters or the Company’s expectations relating to such matters: development of the Cauchari-Olaroz project and the Thacker Pass project, including timing, progress, approach, continuity or change in plans, construction, commissioning, milestones, anticipated production, results thereof and expansion plans;  expectations and anticipated impact of the COVID-19 pandemic; anticipated timing to resolve, and the expected outcome of, any complaints or claims made or that could be made concerning the environmental permitting process in the United States for Thacker Pass; capital expenditures and programs; estimates, and any change in estimates, of the Mineral Resources and Mineral Reserves at the Company’s properties; development of Mineral Resources and Mineral Reserves; government regulation of mining operations and treatment under governmental and taxation regimes; the future price of commodities, including lithium; the realization of Mineral Resources and Mineral Reserves estimates, including whether Mineral Resources will ever be developed into Mineral Reserves and information and underlying assumptions related thereto; the timing and amount of future production; currency exchange and interest rates; the Company’s ability to remain fully funded for a specified period of time, and raise capital or secure additional debt funding as needed; expected expenditures to be made by the Company on its properties; expected uses of proceeds from prior financings; the timing, cost, quantity, capacity and product quality of production of Cauchari-Olaroz, which is held and operated through an entity in Argentina that is 44.8% owned by the Company, 46.7% owned by Ganfeng and 8.5% owned by JEMSE; successful operation of Cauchari-Olaroz under its co-ownership structure; ability to produce battery grade lithium products; settlement of agreements related to the operation and sale of mineral production as well as contracts in respect of operations and inputs required in the course of production; timing and extent of plans to advance the Pastos Grandes project to a construction decision; the timing, cost, quantity, capacity and product quality of production at Thacker Pass and any expansion; results of the Company’s engineering, design and permitting program at Thacker, including that the Company meets deadlines as anticipated; successful results from the lithium technical development center testing facility for the Thacker Pass project; capital costs, operating costs, sustaining capital requirements, after tax net present value and internal rate of return, payback period, sensitivity analyses, and net cash flows of the Cauchari-Olaroz project and the Thacker Pass project; timing, results, and completion of a feasibility study for the Thacker Pass project, along with expectations for a substantial increase to the capital cost estimation in the feasibility study as compared to the PFS and the factors expected to contribute to such increase; the Company’s share of the expected capital expenditures for the construction of the Cauchari-Olaroz project and for permitting and Thacker Pass project feasibility study activities; timings and outcomes of litigation and regulatory proceedings concerning permits and water rights transfer applications for Thacker Pass; sufficiency of water rights for each phase of the Thacker Pass project, and ability to secure additional water rights as needed; whether low-carbon and low-water usage is achieved for the Thacker Pass project operations; continuing support of local communities and the Tribe for the Thacker Pass project, continuing constructive engagement with these and other stakeholders, and any expected benefits of such engagement; 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; successful integration of acquired businesses and projects; expected benefits from investments made in third parties, including expected benefits of the Cooperation Agreement with Arena Minerals and the Collaboration Framework with Green Technology Metals; and the potential for partnership and financing scenarios for the Thacker Pass project, including potential funding through the ATVM

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

loan program, and a potential separation between the U.S. and Argentina operations of the Company currently under evaluation.

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 is based upon a number of expectations and assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. With respect to forward-looking information listed above and incorporated by reference herein, the Company has made assumptions regarding, among other things:

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

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 certain risk factors set out in the Company’s latest AIF, including but not limited to, the following: the impacts of the COVID-19 pandemic on the availability and movement of personnel, supplies and equipment and on the timing for regulatory approvals and permits, construction by Minera Exar, in which the Company has a 44.8% co-ownership interest with Ganfeng and JEMSE, at the Cauchari-Olaroz project, and on third parties providing services to the Company in respect of the Thacker Pass project or to Minera Exar with respect to the Cauchari-Olaroz project; the Company’s mineral properties, or the mineral properties in which it has an interest, may not be developed or operate as planned and uncertainty of whether there will ever be production at the Company’s mineral exploration properties, or the properties in which it has an interest; cost overruns; risks associated with the Company’s ability to successfully secure adequate funding, including the outcome of the Company’s DOE loan application; market prices affecting the ability to develop the Company's mineral properties and properties in which it has an interest; risks associated with co-ownership arrangements; risks related to acquisitions, integration and dispositions; risk to the growth of lithium markets; lithium prices; inability to obtain required governmental permits and government-imposed limitations on operations; technology risk; inability to achieve and manage expected growth; political risk associated with foreign operations, including co-ownership arrangements with foreign domiciled partners; risks arising from the outbreak of hostilities in Ukraine 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; 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; whether Mineral Resources will ever be converted into Mineral Reserves; risks in connection with the Company’s existing debt financing; risks related to investments in Argentine bonds and equities; opposition to development of the Company’s mineral properties; lack of brine management regulations; surface access risk; risks related to climate change; geological, technical, drilling or processing problems; uncertainties in estimating capital and operating costs, cash flows and other project economics; liabilities and risks, including environmental liabilities and risks inherent in mineral extraction operations; health and safety risks; risks related to the 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 and any additional regulations on the Company’s operations; risks related to unknown financial contingencies, including litigation costs, on the Company’s operations; unanticipated results of exploration activities; unpredictable weather conditions; unanticipated delays in preparing technical studies; inability to generate profitable operations; restrictive covenants in debt instruments; lack of availability of additional financing on terms acceptable to the Company, or to the Company and its co-owners for

 

 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(Expressed in US dollars, unless stated otherwise)

 

any co-ownership interests; shareholder dilution; intellectual property risk; dependency on consultants and key personnel; payment of dividends; competition for, amongst other things, capital, undeveloped lands and skilled personnel; fluctuations in currency exchange and interest rates; regulatory risk, including as a result of the Company’s dual-exchange listing and increased costs thereof; conflicts of interest; common share volatility; and cybersecurity risks and threats. Consequently, actual results and events may vary significantly from those included in, contemplated or implied by such statements. See the AIF available on SEDAR for a complete description of such risk factors.

Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking information contained in this MD&A is expressly qualified by these cautionary statements. All forward-looking information in this MD&A speaks as of the date of this MD&A. 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 MD&A is expressly qualified in its entirety by this cautionary statement.  Additional information about these assumptions and risks and uncertainties is contained in our filings with securities regulators, including our most recent AIF, which are available on SEDAR at www.sedar.com.

 

 

Exhibit-99.3

 

Form 52-109F2

Certification of Interim Filings

Full Certificate

 

I, Jonathan Evans, Chief Executive Officer of Lithium Americas Corp., certify the following:

 

 

 

 

 

 

 

 

1

 

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Date:  July 28, 2022

 

 

2

 

 

Exhibit 99.4

 

Form 52-109F2

Certification of Interim Filings

Full Certificate

 

I, Eduard Epshtein, Chief Financial Officer of Lithium Americas Corp., certify the following:

 

 

 

 

 

 

 

 

1

 

---

 

 

 

 

 

 

Date: July 28, 2022

 

 

2

 

Exhibit 99.5

 

 

 

Lithium Americas Reports Second Quarter 2022 Results

 

HIGHLIGHTS

Argentina

Caucharí-Olaroz

Pastos Grandes

United States  

Thacker Pass

 

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Corporate

 

 

TECHNICAL INFORMATION

The Technical Information in this news release has been reviewed and approved by Rene LeBlanc, PhD, SME, Chief Technical Officer of Lithium Americas, and a Qualified Person as defined by National Instrument 43-101.

 

FINANCIAL RESULTS

Selected consolidated financial information is presented as follows:

 

 

 

 

During the six months ended June 30, 2022, total assets increased primarily due to the acquisition of Millennial Lithium. Total long-term liabilities decreased due to $31.2 million decrease in fair value of convertible senior notes derivative liability and repayment of $24.7 million limited recourse loan facility balance and accumulated interest.

 

 

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The lower net loss in Q2 2022 compared to Q2 2021 is primarily attributable to $81.6 million gain on change in fair value of convertible notes derivative driven by a decrease in market value of the Company’s shares, partially offset with $71.5 million share of loss of Cauchari-Olaroz Project as a result of foreign exchange loss on the project’s loans.

 

This news release should be read in conjunction with Lithium Americas’ condensed consolidated interim financial statements and management's discussion and analysis for the six months ended June 30, 2022, which are available on the Company’s website and SEDAR. All amounts are in U.S. dollars unless otherwise indicated.

 

ABOUT LITHIUM AMERICAS

 

Lithium Americas is focused on advancing lithium projects in Argentina and the United States to production. In Argentina, Caucharí-Olaroz is advancing towards first production and Pastos Grandes represents regional growth. In the United States, Thacker Pass has received its Record of Decision and is advancing towards construction. 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:

Investor Relations

Telephone: 778-656-5820

Email: ir@lithiumamericas.com

Website: 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: successful development of the Caucharí-Olaroz project, the Thacker Pass project and the Pastos Grandes project, including timing, progress, construction, milestones, scale, anticipated production and results thereof; timing for commissioning of the Caucharí-Olaroz project, plans to prioritize commissioning and the expected timing to complete deferred construction items as a result of such prioritization; the Company’s ability to fund its development programs through debt or equity financing, including through government loan programs, and the expected outcome of debt or other financing strategies the Company is pursuing, including the Advanced Technology Vehicles Manufacturing loan program application; expectations concerning completion of a feasibility study for the Thacker Pass project and that testing of the Thacker Pass flowsheet at the Lithium Technical Center to support the feasibility study will be successful; expected timing and outcome of litigation or regulatory processes concerning the Thacker Pass project; expected outcome and timing of environmental surveys and analysis, permit applications and other environmental matters; expected expenditures to be made by the Company on its properties, inflationary impacts on such expenditures and the Company’s ability to remain fully funded for its share of such expenditures; the potential for partnership and financing scenarios for the Thacker Pass project; and the proposed separation of the Company’s business, its structure and completion thereof.

 

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 be 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, the following: current technological trends; the Company’s ability to fund, advance and develop its projects, including results therefrom and timing thereof; capital costs, operating costs, and sustaining capital requirements of the Caucharí-Olaroz project and the Thacker Pass project, significant increases to such estimates and ability to finance any such increases; a cordial business relationship between the

 

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Company and its strategic partners, including Ganfeng Lithium for the Caucharí-Olaroz project; ability of the Company to fund, advance and develop its projects and raise additional capital as needed; 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 Nevada and Argentina, and resolving any complaints or litigation concerning such environmental permitting processes; realizing on the expected benefits from previous transactions with existing or new partners, or for debt or equity financing; demand for lithium, including that such demand is supported by growth in the electric vehicle market; the Company’s ability to produce high purity battery grade lithium products; the impact of increasing competition in the lithium business, and the Company’s competitive position in the industry; ability to attract and retain skilled talent in a competitive hiring environment; currency exchange and interest rates; general economic conditions, including inflationary conditions and their impact on the Company, its contractors and suppliers; the feasibility and costs of proposed project designs and plans; availability of technology, including low carbon energy sources and water rights, on acceptable terms to advance the Thacker Pass project; stable and supportive legislative, regulatory and community environments in the jurisdictions where the Company operates; stability and inflation of the Argentinian 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 costs of litigation and regulatory processes, 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; exploration, development and construction costs for the Caucharí-Olaroz project and the Thacker Pass project; the timing, cost, quantity, capacity and product quality of production at the Thacker Pass project, and any expansion scenario; technological advancements and changes; estimates of mineral resources and mineral reserves, including whether mineral resources will ever be developed into mineral reserves; reliability of technical data; anticipated timing and results of exploration, development and construction activities, including the impact of COVID-19 on such timing; timely responses from governmental agencies responsible for reviewing and considering the Company’s permitting activities at the Thacker Pass project; the impact of COVID-19 on the Company’s operations, timelines and budgets; that pending patent applications are approved; government regulation of mining operations and treatment under governmental and taxation regimes; accuracy of development budget and construction estimates; successful integration of acquired businesses and projects; expected benefits from investments made in third parties; changes to the Company’s current and future business plans and the strategic alternatives available to the Company; and stock market conditions generally.

 

Forward-looking information also involves known and unknown risks that may cause actual results to differ materially. These risks include, among others, inherent risks in the development of capital intensive mineral projects (including as co-owners), variations in mineral resources and mineral reserves, changes in budget estimation, global demand for lithium, recovery rates and lithium pricing, risks associated with successfully securing adequate financing, including the outcome of the Company’s loan application with the U.S. Department of Energy, 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, changes in public perception concerning mining projects generally and opposition thereto, political risk associated with foreign operations, permitting risk, including receipt of new permits and maintenance of existing permits, outcomes of litigation and regulatory processes concerning the Company’s projects, title and access risk, cost overruns, unpredictable weather and maintenance of natural resources, risks associated with climate change and its impact on the Company’s projects and operations, unanticipated delays, intellectual property risks, currency and interest rate fluctuations, operational risks, health and safety risks, cybersecurity risks, economic conditions, and general market and industry conditions. Additional risks, assumptions and other factors are set out in the Company’s most recent annual management discussion analysis and annual information form, copies of which are available under the Company’s profile on SEDAR at www.sedar.com and on the SEC website at www.sec.gov.

 

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 such forward-looking information.