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Tuesday, May 21, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Lithium

Lithium Americas is on target to meet production projections for 2024

As of March 31, 2024, Lithium Argentina held USD$86 million in cash and cash equivalents

Lithium Americas is on target to meet production projections for 2024
Workers operating at Pastos Grandes in Argentina. Image via Lithium Argentina.

Lithium Americas (Argentina) Corp. (TSX: LAAC) (NYSE: LAAC) produced 4,500 tonnes of lithium carbonate by March 31, 2024, and remains on target to produce its projected 20,000 to 25,000 tonnes of the substance in 2024.

The company announced on Monday that the project is advancing through the ramp-up phase and testing higher production levels. In April 2024, a planned shutdown was conducted to inspect and enhance the reliability of the processing plant. The goal is to achieve and sustain a near steady-state production level by the end of the year.

For 2024, Caucharí-Olaroz expects to achieve positive operating cash flow when adjusted for changes in working capital. Working capital requirements are anticipated to remain high through the first half of 2024. This is influenced by production which continues to ramp up.

As of March 31, 2024, Lithium Argentina held USD$86 million in cash and cash equivalents. This included an additional $20 million in collateral related to loans to Caucharí-Olaroz expected to be released in Q2 2024. The company had not utilized its USD$75 million credit facility with Ganfeng Lithium Co. Ltd. (SZSE: 002460) (SEHK: 1772) and carried USD$259 million in convertible debt at 1.75 per cent due in early 2027.

Read more: Lithium South explores alternative production methods at Hombre Muerto North

Read more: Lithium South completes pumping test in Alba Sabrina Tenement

Lithium Argentina collaborates with Ganfeng for long term debt options

Lithium Argentina is collaborating with Ganfeng to pursue additional longer-term debt options to leverage improved lending conditions in Argentina and support future growth plans.

“In recent months, we worked closely with Ganfeng to advance local debt options in Argentina to take advantage of improved lending conditions in Argentina and the transition to an operating business,” Sam Pigott, CEO of Lithium Argentina, said. “These actions will enhance financial flexibility to advance near-term growth, minimize dilution and preserve future opportunities to create shareholder value.”

On March 5, 2024, Ganfeng agreed to invest USD$70 million for an expected 15 per cent stake in the Pastos Grandes project through a subscription of newly-issued shares of the company’s Argentine subsidiary, Proyecto Pastos Grandes S.A.

The company expects the transaction’s closure by mid-2024, with proceeds available to support the company’s Argentine operations. In the first quarter of 2024, the company began implementing additional measures to reduce discretionary spending at the corporate level by 25 per cent.

Late last year, Lithium Americas completed a strategic split into two publicly traded companies — Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) and Lithium Americas (Argentina). The move aimed to provide enhanced focus among the two companies in their respective areas of operation.

Specifically, Lithium Americas focuses on developing the Thacker Pass project in Nevada. Meanwhile, Lithium Americas (Argentina) works on its Caucharí-Olaroz joint venture project to full production capacity, alongside developing the Pastos Grandes and Sal de la Puna projects in the Salta province of Argentina.

The deal with Ganfeng Lithium marks a trend of partnerships and acquisitions that have raced across Argentina in the past year.

Read more: Lithium South installs first production well at largest claim block, prepares for testing

Read more: Lithium South preliminary economic assessment shows optimism for lithium’s future

Argentina mergers show strength of lithium market

Arcadium Lithium plc (NYSE: ALTM) (ASX: LTM) is a relatively new player in the lithium game, formed in January 2024 through a merger of equals between established companies — Allkem Limited and Livent Corporation. This strategic move aimed to create a leading global lithium chemicals producer with a wider reach and production capacity.

Meanwhile at the neighbouring Hombre North Lithium Project, Lithium South Development Corporation (TSXV: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ), and POSCO Holdings’ (NYSE: PKX) Argentina lithium-producing subsidiary entered into a cooperative development agreement.

The project comprises five key claim blocks spanning 3,287 hectares, including Alba Sabrina at 2,089 hectares, Natalia Maria at 115 hectares, Viamonte/Norma Edith with 595 contiguous hectares, Gaston Enrique at 55 hectares, and Tramo at 383 hectares.

Additionally, Eramine Sudamerica is preparing to open its first lithium carbonate plant in the Argentine province of Salta in July. The company is a joint venture between French miner Eramet and Chinese steelmaker Tsingshan.

Earlier this month, the company announced it was on track to become the country’s fourth producer of the battery metal. Eramine Sudamerica anticipates producing 3,000 tons this year and ramping that up to approximately 24,000 tons by 2025.

 

Lithium South Development Corporation is a sponsor of Mugglehead news coverage

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