Lithium Americas (TSX: LAC) is looking to unlock shareholder value, while at the same time seemingly looking to be cognizant of recent actions by the Government of Canada to force the divesture of investments by foreign entities into critical mineral-focused firms. The firm this morning revealed that it will be splitting its company into two.
“Following a comprehensive review of the merits of separating Lithium Americas into two public entities, we have reinforced our beliefs that separating the North American and Argentine businesses will facilitate unlocking the full potential of their significant asset base to deliver maximum value to our shareholders and other stakeholders,” said CEO Jonathan Evans.
The company has indicated that it “intends to advance a reorganization” that will see its American-based operations split from its Argentina-based operations. The split will result in the forming of a firm to be called Lithium International, which will hold the firms current interest in the Cauchari-Olaroz lithium brine project, as well as the Pastos Grandes lithium project, and the firms 17% stake in Arena Minerals.
Lithium Americas NewCo meanwhile will hold the firms Thacker Pass lithium project in Nevada, as well as current investments in Ascend Elements and Green Technology Metals.
The company has highlighted the benefit of separation as being that Lithium Americas NewCo will be focused on the US national agenda to enhance the supply of critical minerals, while the firm awaits a final decision due in 2023 from an appeal, with all required permits for construction currently in place. Lithium International meanwhile will feature a mine that will feature Stage 1 production of 40,000 tonnes of lithium carbonate production beginning in the first half of 2023.
The separation is currently expected to be completed by the end of 2023, with further details on allocation of assets and liabilities, as well as structure and management teams to be provided at a later date.
Lithium Americas last traded at $32.90 on the TSX.
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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.