An anonymous director reports
LITHIUM AMERICAS REPORTS 2020 FULL YEAR AND FOURTH QUARTER RESULTS
Lithium Americas Corp. has released financial and operating results for the fourth quarter and year ended Dec. 31, 2020.
This news release should be read in conjunction with Lithium Americas' consolidated financial statements and management's discussion and analysis for the year ended Dec. 31, 2020, which are available on the company's website and SEDAR.
All amounts are in U.S. dollars unless otherwise indicated.
Cauchari-Olaroz lithium project
Construction activities at Cauchari-Olaroz continue to advance with enhanced COVID-19 health and safety protocols in place.
Capital expenditures for the project remain on budget with $477-million (84 per cent) of the $565-million committed, including $388-million (69 per cent) spent, as of Dec. 31, 2020.
- Capital costs attributable to COVID-19 during the construction period, including costs for quarantine and extra camp capacity, are being assessed and now reported separate from the budgeted capital expenditures.
Significant progress has been made on the lime plant, solvent extraction plant and lithium carbonate plant.
- The solar evaporation ponds are well advanced with sufficient brine inventory to support production ramp up.
The health and safety of the work force and surrounding communities remains the highest priority with no positive cases of COVID-19 reported at site in over 130 days.
- Based on the latest construction schedule, which assumes a reduced work force at site in accordance with COVID-19 protocols throughout construction, the company expects first production in mid-2022.
- In Q1 2021, Marcelo Cabral was appointed general manager responsible for the development and commissioning of Cauchari-Olaroz. Mr. Cabral was previously with Gold Fields Ltd. and responsible for commissioning MMG Ltd.'s Las Bambas copper project in Peru.
- In H1 2021, the Jujuy Energia y Mineria Sociedad del Estado, a company owned by the government of Jujuy province, is expected to complete the exercise of its 2012 participation right, at which point it will receive and hold an 8.5-per-cent interest in Cauchari-Olaroz.
Thacker Pass lithium project
On Jan. 15, 2021, the U.S. Bureau of Land Management issued the record of decision following completion of the National Environmental Policy Act process.
- All remaining state permits and water right transfers required to commence construction are expected later this year.
- The process testing facility in Reno, Nev., continues to operate with enhanced COVID-19 protocols in place and has produced over 15,000 kilograms of lithium sulphate solution.
che company continues to evaluate partnership and financing opportunities for Thacker Pass, including the possibility of a joint venture partner.
- The company contemplates that the feasibility study will include an initial production capacity greater than 20,000 tonnes per annum of lithium carbonate equivalent previously considered. Based on continuing discussions with potential partners and customers, the company expects that a finalized development plan and timeline of the related feasibility study will be determined as the prospective commercial arrangements are advanced.
As at Dec. 31, 2020, the company had $148-million in cash and cash equivalents ($518-million as at Feb. 28, 2021).
On Jan. 22, 2021, the company closed an underwritten public offering of shares of its common stock and issued 18,181,818 common shares at a price of $22 per common share for gross proceeds to the company of approximately $400-million (approximately $377-million net proceeds).
- On Nov. 30, 2020, Lithium Americas completed an at-the-market equity program and issued a total of 9,266,587 common shares from treasury for gross proceeds of approximately $100-million ($97-million net proceeds).
As at Dec. 31, 2020, the company had $184-million in undrawn credit with $96-million drawn from the $205-million senior credit facility and $25-million from its $100-million unsecured, limited recourse, subordinated loan facility.
- In February, 2021, Ignacio Celorrio was promoted to president, Latin America, to act as the company's representative in Latin America and oversee the management of the Cauchari-Olaroz project.
- In November, 2020, Lithium Americas published its inaugural 2019 sustainability report prepared with reference to the global reporting initiative standards, which includes reporting on the United Nations' sustainable development goals.
Selected consolidated financial information is presented in the attached table.
During the year ended Dec. 31, 2020, total assets increased primarily due to the proceeds raised from the $100-million ATM program, partially offset by a decrease as a result of closing the transaction with a subsidiary of Ganfeng Lithium Co. Ltd. and cessation of proportional consolidation of Cauchari-Olaroz with transition to equity accounting for the project investment. Cash increased due to the ATM program proceeds and the $40-million of loans repaid to the company upon closing of the transaction with Ganfeng partially offset by capital expenditures on Cauchari-Olaroz and operating activities, including exploration expenditures on Thacker Pass. Total long-term liabilities increased primarily as a result of a $24.7-million drawdown on the company's limited recourse loan facility and a $12-million drawdown on the company's senior credit facility, partially offset by the effect of closing the transaction with Ganfeng.
Net loss for the year ended Dec. 31, 2020, was $36.2-million compared with net income of $51.7-million for the year ended Dec. 31, 2019. Net income in 2019 was a result of the gain on dilution of interest in Cauchari-Olaroz.
The scientific and technical information in this news release has been reviewed and approved by Dr. Rene LeBlanc, a qualified person for purposes of National Instrument 43-101 by virtue of his experience, education and professional association. Dr. LeBlanc is the chief technical officer of the company. Information on the company's data verification and quality assurance/quality control procedures is contained in Lithium Americas' current technical reports for Cauchari-Olaroz and Thacker Pass, available on SEDAR.
About Lithium Americas Corp.
Lithium Americas is a development-stage company with projects in Jujuy, Argentina and Nevada, United States. The company trades on both the Toronto Stock Exchange and on the New York Stock Exchange, under the ticker symbol LAC.
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