Lithium Americas (TSX: LAC) said it reached a non-binding agreement with the Department of Energy and JV partner General Motors to advance a $435 million first draw in Q4 2025 from the DOE loan for Thacker Pass. Alongside this, the agreement includes deference of $182 million of debt service over five years and grant the DOE a 5% company stake via penny-warrants plus a 5% economic interest in the joint venture.
The company said the total DOE loan is now expected at $2.23 billion, down from the previously announced $2.26 billion. Principal remains $1.97 billion, while estimated capitalized interest during construction decreases to $256 million on a lower projected 5.0% rate.
Under the first-draw terms, DOE will defer $182 million of early-period debt service and receive two warrant packages priced at $0.01: Lithium Americas warrants sized to 5% of the company’s common equity and JV warrants sized to a 5% non-voting, non-transferable economic stake in the Thacker Pass.
Lithium Americas will fund an additional $120 million into DOE loan reserve accounts within 12 months after the first draw is advanced.
If the DOE exercises the JV warrants in full, economics would shift to 59% Lithium Americas, 36% for GM, and 5% for the DOE, with JV voting unchanged at 62% Lithium Americas and 38% GM. DOE will also receive a board observer right at the JV while it holds the warrants or units.
This aligns with the previous announcement that the Trump administration is reportedly seeking an equity stake of up to 10% in exchange of then $2.26-billion loan.
Subsequently, GM will amend its offtake to permit the JV to sign third-party offtakes for Phase 1 tonnage not forecast to be purchased by GM, while maintaining GM’s existing rights to buy up to 100% of Phase 1 production and up to 38% of total Thacker Pass output for 20 years. GM also keeps a right of first offer on remaining Phase 2 volumes and, after its offtake expires, life-of-mine offtake rights at market prices for a percentage of Phase 1 and Phase 2 volumes.
The agreement also defines exit and conversion mechanics among the DOE, GM, and Lithium Americas. After Thacker Pass reaches substantial completion, GM will have a call right to purchase the DOE’s JV warrants or units at a mutually agreed price. If no price is agreed, those interests would convert into Lithium Americas common equity at a pre-agreed warrant conversion rate. DOE will also have a put right to require GM either to buy the DOE’s JV interests at fair market value or to cause their conversion into Lithium Americas shares.
Terms remain preliminary and subject to definitive documentation, corporate approvals, and customary conditions.
The move follows a series of negotiations the White House made with industry firms to get equity in exchange for grants and loans, with a recent deal with MP Materials as the model for such agreements.
Information for this story was found via the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
