Lithium Americas Pushes Cauchari-Olaroz Full Production To Mid-2024

On August 9, Lithium Americas Corp. (TSX: LAC) reported its second quarter 2023 financial results. As Lithium Americas is a pre-revenue company and is primarily valued on investor perceptions of the long-term values of its flagship Cauchari-Olaroz (C-O) and Thacker Pass lithium projects, the reported numbers are not headline figures per se, but the company’s 2Q 2023 operating cash flow deficit of only US$12 million and its June 30, 2023 cash balance of US$502 million are both impressive figures.


(in thousands of US $, except for shares outstanding)2Q 20231Q 20234Q 20223Q 20222Q 2022
Operating Income($17,134)($17,126)($31,759)($25,262)($90,333)
Operating Cash Flow($11,892)($19,027)($14,292)($16,739)($16,242)
Cauchari-Olaroz Capital Expenditures($24,500)($37,730)($23,520)($26,950)($21,854)
Cash – Period End$501,994 $604,134 $352,102 $392,213 $440,821 
Debt – Period End$197,358 $209,926 $204,472 $235,012 $212,601 
Shares Outstanding (Millions)159.9151.0135.0135.0134.6

Some key qualitative disclosures Lithium Americas made in its release are summarized in the table below and are compared with the company’s statements when it released 1Q 2023 and full-year 2022 results.


Status of critical C-O equipment necessary to achieve battery-quality lithium carbonate?Equipment is being tested. Production quality has exceeded expectations.Equipment expected to be completed in. 2H 2023.Equipment expected to be completed in. 2H 2023.
When will C-O achieve full Stage 1 annualized capacity of 40,000 tonnes?Mid-20241Q 20241Q 2024
How much lithium carbonate will be produced at C-O in 2023?5,000 tonnesNot discussedNot discussed
Total estimated capital costs of C-O, on a 100% ownership basisUS$979 millionUS$979 millionUS$852 million
Timing of Thacker Pass initial production?2H 20262H 20262H 2026

Lithium Americas’ most constructive comment in the 2Q 2023 release was that the production quality of equipment necessary to achieve battery-quality lithium carbonate at Cauchari-Olaroz has “exceeded expectations.” The equipment is still being tested.

Another positive: Lithium Americas estimates that its share of the remaining capital costs, valued-added taxes, and working capital related to Cauchari-Olaroz, which is in northern Argentina near the Chilean border, is less than US$25 million. Lithium Americas owns 44.8% of the project; it is expected to have a 40-year life.

On the other hand, Lithium Americas pushed back to mid-2024 the timing of Cauchari-Olaroz reaching its full, stage one 40,000 tonne per year lithium carbonate production capacity. In mid-May, the company predicted it would attain that rate in 1Q 2024.

The company previously reported that Cauchari-Olaroz achieved its first lithium production in June 2023. This delay in reaching full capacity likely factors into Lithium Americas’ estimate that Cauchari-Olaroz’s lithium carbonate output will total about 5,000 tonnes in 2023, likely a smaller quantity than many investors would have expected.

Lithium Americas’ separation into two companies — Lithium Argentina and a new Lithium Americas which will own Thacker Pass  — is expected to occur in early October. Shareholders overwhelmingly approved the separation in a late July meeting.

The company expects the U.S. Department of Energy to grant conditional approval to Thacker Pass by year-end 2023 for its Advanced Technology Vehicles Manufacturing Loan Program. The program would fund up to 75% of Thacker Pass’ Phase 1 construction costs.

Lithium Americas Corp. last traded at $24.61 on the TSX Exchange.

Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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