General Motors (NYSE: GM) is officially the largest shareholder of Lithium Americas (TSX: LAC). The firms jointly announced after the close of markets yesterday that the first tranche of a $650 million investment has been closed.
The auto manufacturer now holds 15.0 million shares of the lithium mine developer, which it acquired at a price of $21.34 per share, with gross proceeds amounting to $320 million. Proceeds from the investment are slated to be used to develop the Thacker Pass lithium project in Nevada.
“The beginning of construction at Thacker Pass is imminent following last week’s favorable ruling on the Record of Decision and the closing of GM’s initial investment. GM’s investment is a landmark transaction that will help put millions of drivers into electric vehicles while creating jobs and a strong and secure U.S. supply chain for EV raw materials,” said Lithium Americas CEO Jonathan Evans.
The related offtake agreement in connection with the investment is also said to have closed, as well as the parties have entered into an investor rights agreement, completed a second tranche subscription agreement, and Lithium Americas has issued warrants related to the second tranche of the financing.
The final tranche of the $640 million investment is conditional on the firm completing its spin-out of the Argentina lithium business, as well as the Thacker Pass project receiving conditions related to water rights for the project and a record of decision that “does not result in vacatur of the ROD.” In terms of pricing, GM has agreed to pay up to $27.74 per share for the second tranche, with the final figure to be based upon the market price at time of closing.
The second tranche of the financing meanwhile is expected to close upon the completion of the spin-out of the firms Argentina business.
Lithium Americas last traded at $33.97 on the TSX.
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