Lithium Americas (LAC) Gabelli Funds' 16th Annual Specialty Chemicals Symposium summary

Project overview and strategy

• Thacker Pass in Nevada is the world's largest known lithium deposit, with five planned expansion phases and a target of 160,000 tons annual capacity over time.

• Phase I aims for 40,000 tons/year of battery-grade lithium carbonate, with a 20-year off-take agreement with GM for all phase I output and 38% of phase II.

• The project is fully permitted, with no litigation or operational restrictions, and is advancing through active construction.

• The company is collaborating with local communities and tribes, and has implemented a workforce hub to support up to 2,000 construction workers.

• The project is expected to supply 15%-20% of North America's refined lithium demand at full production, helping to reshore critical materials supply.

Financial structure and partnerships

• Funding includes a $2.26 billion Department of Energy ATVM loan, $750 million from GM, and up to $250 million from Orion Resource Partners.

• GM holds a 38% JV interest and provides a $200 million zero-interest line of credit; Orion's five-year note is convertible at $3.87/share with a 9.87% pick and includes a royalty/production payment.

• The DOE loan is drawn after 95% of JV capital is spent, with monthly draws based on project milestones and a mechanical approval process.

• The company has around $340 million net cash and a $660 million market cap as of September 2023.

• Orion's investment structure is designed to protect downside risk and includes a production payment that decreases as lithium prices rise.

Operations, technology, and timeline

• The project uses a low OpEx process ($6,300/ton), leveraging simple beneficiation and purification steps with off-the-shelf equipment.

• Engineering is over 60% complete, with all major excavation and pad work finished; first concrete pours are imminent.

• The process is environmentally focused, recycling 85% of water and using hydro-based power, achieving carbon neutrality.

• Construction is expected to complete by late 2027, with ramp-up through 2028 and first product deliveries to GM thereafter.

• The project is designed to be resilient in low-price environments and is positioned in the first quartile of the global cost curve.