Lithium Americas Corp., the Canada-based developer of the Thacker Pass lithium mining project in northern Nevada, and General Motors Holdings LLC entered into a new investment agreement to establish a joint venture for the purpose of funding, developing, constructing and operating Thacker Pass. The JV Transaction will deliver $625 million of cash and letters of credit from GM to Thacker Pass alongside the conditional commitment for a $2.3-billion US Department of Energy (DOE) loan announced earlier this year.

Under the terms of the investment agreement, GM will acquire a 38% asset-level ownership stake in Thacker Pass for $625 million in total cash and letters of credit, including $430 million of direct cash funding to the JV to support the construction of Phase 1 and a $195-million letter of credit facility that can be used as collateral to support reserve account requirements under the DOE Loan. The JV Transaction replaces the $330-million Tranche 2 common equity investment commitment from GM under its original investment agreement with the company announced in January 2023.

The largest publicly announced investment by a US OEM in a lithium carbonate project highlights the strategic importance of Thacker Pass in creating a domestic supply chain for critical minerals. The new agreement allows Lithium Americas to secure $625 million in cash and letters of credit, while avoiding common equity dilution associated with Tranche 2.

The agreement also builds upon an already strong relationship with GM as strategic investor and extends Phase 1 offtake to 20 years.

The JV transaction is incremental to GM’s February 2023 Tranche 1 investment of $320 million, which resulted in GM acquiring approximately 15 million common shares of Lithium Americas. In addition to the JV Transaction, GM has agreed to extend its existing offtake agreement for up to 100% of production volumes from Phase 1 of Thacker Pass to 20 years to support the expected maturity of the DOE Loan.

Upon closing of the JV, GM will also enter into an additional 20-year offtake agreement for up to 38% of Phase 2 production volumes and will retain its existing right of first offer on the remaining Phase 2 production volumes.

GM’s JV investment is subject to certain conditions precedent, including those related to the loan agreement for the DOE Loan.

In March 2024, the Company received a conditional commitment for a $2.3-billion loan from the US DOE under the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program. Prior to making the first draw on the DOE Loan, expected sometime in the middle of 2025, the company is required to fund approximately $195 million (funded by either cash or letters of credit) for reserve accounts associated with the DOE Loan (for construction contingency, ramp-up and sustaining capital). The GM LC Facility will be used to fund the DOE’s reserve accounts.

Thacker Pass update. Lithium Americas said that it continues to focus on de-risking project execution by advancing detailed engineering, project planning and procurement packages.

Detailed engineering continues to progress in advance of issuing full notice to proceed, currently at approximately 40% design complete. Site preparation for major earthworks has been completed and the process plant area is currently being excavated (approximately 50% complete) to prepare for concrete placement, forecasted to begin by mid-2025.

Procurement packages for the top seven pieces of long-lead equipment have been awarded. Contracts for key construction materials have been awarded and field purchases of goods and services have commenced. Major earth works for the all-inclusive housing facility for construction workers (the Workforce Hub) are completed. The current focus is on finalizing engineering and permitting for utilities and preparing to award contracts for the detailed earthworks, foundation installation and erection of the housing units.

To date, the Company has achieved over one million work hours without a lost time injury.

Next steps. The company continues to work closely with the DOE and expects to close the DOE Loan in the coming weeks. The company and GM are targeting making the FID and issuing full notice to proceed for Thacker Pass by the end of the year, following closing of the DOE Loan and the JV transaction.