Vancouver-based junior Lithium Americas (TSX: LAC; NYSE: LAC) received final approval from the U.S. Bureau of Land Management (BLM) for the company’s Thacker Pass lithium mine project in northwestern Nevada on Jan. 15.
The project, located 100 km northwest of Winnemucca, in the state’s Humboldt County, is host to the largest known lithium resource in the United States, and Lithium Americas has been working the asset up for a decade. According to a pre-feasibility study filed in August 2018, the company foresees it as a two-phase, open-pit project, with production capacity that could reach 60,000 tonnes annually of battery-grade lithium carbonate (Li2CO3) over a 46-year mine life. Thacker Pass is 100% -owned by Lithium Americas.
Measured and indicated resources at Thacker Pass total 385 million tonnes averaging 2,917 parts per million (ppm) lithium for 6 million tonnes of lithium carbonate equivalent (LCE). Inferred resources are 147 million tonnes averaging 2,932 ppm for 2.3 million tonnes of LCE.
The company plans to process the ore in a leaching circuit using sulphuric acid to liberate the lithium from the claystone. After the leaching process, the lithium bearing solution would be purified using crystallizers and reagents to produce battery-grade lithium carbonate.
With the record of decision (ROD) from the BLM, the company is now focussed on its applications for key state permits and water rights transfers, with results expected later this year. With the ROD in place, the company plans on starting construction by the end of 2021 or early next year.
“It takes two years to build a project like this, so you’re talking 2024-2025 to get into the marketplace, which, I think, is a perfect inflection point for the [lithium] industry,” Jon Evans, the company’s president and CEO, said in an interview. “Our idea is 30,000 tonnes [per year] to start, which is half the permit limit.”
“We have done a lot of preparation for this moment,” he said. “The record of decision is both a federal and a state decision, so we were happy with the support, both locally and federally.”
Since December, the company has already hired half a dozen people, he said, supplementing their engineering team in Nevada. At the same time, Lithium Americas has pushed forward an ambitious financing plan for Thacker Pass.
Just days after releasing news of the ROD decision, Lithium Americas announced that it had raised US$400 million in a brokered private placement of more than 18 million shares at a price of US$22 per share. The net proceeds will be used to develop Thacker Pass, as well as general corporate and working capital purposes.
According to Evans, results from the offering have given the company pause to consider their options with Thacker Pass, especially as the funding was raised in the midst of the Covid-19 pandemic.
“It’s folks that can make it through the Valley of Death and survive that [find] opportunity on the other end and cash allows you to do that,” he said. “We were two times oversubscribed. I was in disbelief. We’ve raised some capital, so our cash position has changed markedly over the last few months. And this gives us some different paths to consider. Do we build this on our own? Or do we continue to look for a strategic partner, and I think we still like that path. But the types of partners, and the structure of that partnership can be different. You know, we bring more to the table in terms of capital already raised.”
While the company ponders whether to go it alone or partner up, Evans believes that the lithium sector in North America itself faces some hurdles moving forward, even as he thinks it is poised for growth in the decade ahead.
“The interest in a North America [lithium] asset already is high, and then it’s going to get even more so, in that the supply chains are all integrated and we all want to have a local source,” he said, referring to the desire of the new administration of U.S. President Joe Biden to maintain elements of the America First economic policies.
The demand for lithium is already increasing, he said, pointing to General Motors recent announcement that it plans to make only electric vehicles from 2035 on, and the U.S. government’s plans to shift to buying EVs in the next decade.
“How much lithium is used in the U.S., today, for vehicles? It’s about 18,000 tonnes,” Evans pointed out. “And there’s about 5,000 tonnes that’s made in the U.S. today. You go to 2025 and you need a little over 100,000 tonnes just to fuel electric vehicles. And then when you get to 2030 it’s about 360,000 tonnes. So, the whole industry today in the U.S. and Canada? We have challenges.”
But Evans thinks the global lithium sector needs to prepare for even further demand, and should think in terms of doubling its size in the next four or five years.
“[Lithium production] needs to go to something like 800,000 or 900,000 tonnes, which has never been done before,” he said. “And then from 2025 to 2030, you have to double it again. You know, go from 800,000 or 900,000 to, I’ll call it 2 million tonnes. And that’s just for 15-20% EV sales in 2030. So, I think we’re right on the precipice of a real acceleration in the [lithium] sector.”
With a favourable ROD, flush with capital and a positive outlook for short-term and long-term demand, Lithium Americas finds itself in a unique position for a junior.
“We’re in a position where I don’t need to sell half the project off,” said Evans. “Right now – and I think it’s going to last a while – the sector has a lot of interest. And people I think believe in us now, given the quality of our properties and what we’ve done so far. Yeah, all of the right pieces are now coming together.”
At press time, Lithium Americas’ shares were trading at $24.54, within a 52-week range of $2.90 to $36.60. The company has 119 million shares outstanding, and a market capitalization of $3 billion.
All thar info and nothing said about mineralogy or processing.