Lithium Americas seeks US$275M in share sale for Thacker Pass project in Nevada

Lithium Americas (TSX: LAC; NYSE: LAC) is raising US$275 million through a stock offering weeks after getting initial approval for a record government loan to advance its Thacker Pass lithium project in Nevada.

The Vancouver-based company plans to sell 55 million common shares at US$5 apiece in an offering expected to close April 22. Last month, the Department of Energy prepared its largest ever loan, nearly US$2.3 billion, for Thacker Pass. Shares in Lithium Americas fell by about 5% in Thursday afternoon trading in New York to US$4.85 each, valuing the company at U$764.2 million.

Major construction of Thacker Pass is expected to start in this year’s second half. The open-pit lithium clay project aims to produce 40,000 tonnes a year of battery grade lithium carbonate in a first stage starting in 2027. It will probably be the largest lithium mine in the United States, helping build 800,000 electric vehicles a year. General Motors has pledged US$650 million in funding in return for all of the mine’s output for up to 15 years.

Counting US$196 million cash on hand, the government loan, GM’s contribution so far and the share offering, Lithium Americas has US$2.7 billion for the project’s forecast cost of US$2.9 billion, the company said. It’s funded for 2024 operations, it said.

Bechtel

Design and construction firm Bechtel has completed about a third of detailed engineering, Lithium Americas said last month. The build is to employ 1,800 workers.

“Our team has been focused on refining the development plan and de-risking construction,” Lithium Americas Jonathan Evans president and CEO said in a March 14 release. “We have completed all the early-works and infrastructure required for major construction, including excavating the processing plant areas.”

The Department of Energy loan is expected to be finalized before major construction starts. The loan fits in with the Biden administration’s push for critical mineral developments to reduce dependence on China.

The site holds 385 million measured and indicated tonnes averaging 2,917 parts per million (ppm) lithium for 6 million tonnes of lithium carbonate equivalent (LCE). There are 147 million inferred tonnes averaging 2,932 ppm for 2.3 million tonnes of LCE.

Lithium Americas won a court case last year against environmentalists, ranchers and Indigenous groups who argued Thacker Pass would harm a type of grouse, groundwater and air quality.

The project may be expanded to produce 60,000 tonnes LCE a year over a 46-year mine life, according to a 2018 prefeasibility study.

New York-based investment banks Evercore ISI and Goldman Sachs, and BMO Capital Markets in Toronto are running the share offering.