Lithium Argentina (LAR) Q2 2024 earnings summary

Executive summary

• Achieved 5,600 tons of lithium carbonate production in Q2 2024, up 24% from Q1, with record monthly output for three consecutive months and production sustained at around 70% of design capacity.

• Production guidance for 2024 remains at 20,000–25,000 tonnes, with commercial production expected later in 2024 and ongoing quality improvements to reduce processing costs.

• Strategic partnership with Ganfeng continues to support long-term growth and project development.

• The company maintains a strong financial position, emphasizing disciplined spending, optimized working capital, and effective cost management.

Financial highlights

• Operating cash flow remains positive, adjusted for working capital tied to ramp-up, even in the current pricing environment.

• As of June 30, 2024, cash and cash equivalents stood at $96 million, with an undrawn $75 million credit facility available from Ganfeng.

• Minera Exar S.A. had approximately $315 million in US dollar and US dollar-linked debt at the official FX rate, or $230 million at the market FX rate.

• Net income for Q2 2024 was $2.2 million, primarily due to a $10.8 million deferred tax recovery, gain on convertible note derivative, and finance income.

• Costs are declining and expected to continue falling as production volumes increase and quality improves.

Outlook and guidance

• On track to achieve 2024 production guidance, with commercial production anticipated by year-end and expectations for further cost reductions as quality and volumes improve.

• The company expects to close the $70 million Pastos Grandes transaction imminently, following Chinese regulatory approvals.

• Ongoing efforts to secure long-term financing for Exar and reduce leverage using proceeds from asset transactions and partner contributions.

• Expansion and regional development plans are advancing, with more details expected by year-end.