Last week, several media sources reported that the U.S. Department of Energy (DOE) may lend more than US$1 billion to Lithium Americas Corp. (TSX: LAC) to support construction at the company’s Thacker Pass lithium project in Nevada. The DOE and Lithium Americas are apparently negotiating the terms of the loan. The outlay would be the largest loan ever awarded to a mining company through the DOE’s Loan Programs Office. If the reports are true, the DOE loan would fund nearly half of Thacker Pass’ US$2.27 billion budget.
Thacker Pass could become North America’s largest source of lithium, a key component in electric vehicle batteries. Indeed, some geologists (including one who works for Lithium Americas) recently published a peer-reviewed scientific paper which theorizes the Thacker Pass property may be located in the most lithium-rich area of the biggest lithium deposit on earth, a volcanic crater called the McDermitt Caldera.
In February 2023, Lithium Americas received a Letter of Substantial Completion from the DOE’s Loan Program Office regarding its application to support the financing of Thacker Pass. More specifically, the company applied for financing assistance from the DOE’s Advanced Technology Vehicles Manufacturing (ATVM) Loan Program. At that time, Lithium Americas said an ATVM loan could provide up to 75% of Thacker Pass’ total capital costs.
It appears that the Loan Program Office’s loan to Lithium Americas would be the second largest it has issued. Earlier this year, the DOE agreed to loan US$2 billion to Redwood Materials, a privately owned EV battery manufacturer. In 2022, the DOE provided US$107 million in funding to a private Louisiana-based graphite supplier named Syrah Technologies, LLC.
Lithium Americas expects to incur US$145 million of Thacker Pass construction costs in the second half of 2023.
Separately, Lithium Americas announced last week that it would separate into two companies on October 3. Each share of Lithium Americas will be exchanged for one share of Lithium Americas (Argentina), and one share in the new Lithium Americas (essentially the Thacker Pass project).
Lithium Americas Corp. last traded at $23.08 on the TSX Exchange.
Information for this briefing was found via Edgar, Bloomberg, 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.
