Lithium Americas Reports Third Quarter 2018 Financial and Operating Results
November 14 2018 - 6:30AM
Lithium Americas Corp. (TSX: LAC) (NYSE:
LAC) ("Lithium Americas" or the "Company") has announced
its financial and operating results for the third quarter ended
September 30, 2018.
This news release should be read in conjunction
with Lithium Americas’ unaudited condensed consolidated interim
financial statements and management's discussion and analysis
("MD&A") for the nine months ended September 30, 2018, which
are available on Lithium Americas’ website, SEDAR and EDGAR.
HIGHLIGHTS
Cauchari-Olaroz:
- On October 31, 2018, Lithium Americas completed a series of
transactions (“Transaction”) with subsidiaries of Jiangxi Ganfeng
Lithium Co., Ltd. (“Ganfeng”) and Sociedad Química y Minera de
Chile S.A. (“SQM”) with respect to the Cauchari-Olaroz lithium
project in Jujuy, Argentina (“Cauchari-Olaroz”).
- As a result of the Transaction, Lithium Americas increased its
interest in Minera Exar S.A. (“Minera Exar”), the holding company
for Cauchari-Olaroz, to 62.5% from 50% with Ganfeng holding the
remaining 37.5%.
- Development activities are on schedule with the advancement of
detailed engineering, ponds construction, production wells
drilling, camp construction, plant design and supply purchases to
support the start of Stage 1 production in 2020. No delay is
anticipated to the production schedule as a result of the
Transaction.
- The first evaporation pond was completed and commenced filling
with brine in October 2018.
- Engineering is continuing and is on track to support the first
bid packages for plant construction during the fourth quarter of
2018.
- A total of $41 million has been advanced to Minera Exar during
the first nine months of 2018 (including $22.5 million by the
Company) in the form of equity contributions and loans. An
additional $12 million was advanced to Minera Exar subsequent to
the quarter ended September 30, 2018 (including $9 million by the
Company).
- Minera Exar has increased the size of its team and there are
approximately 180 full-time Minera Exar employees and over 200
additional contractors working on Cauchari-Olaroz in
Argentina.
- Initial Stage 1 capital cost estimate of $425 million, on a
100% basis and before value-added taxes (“VAT”), remains
unchanged.
Lithium Nevada:
- On August 2, 2018, the Company filed the preliminary
feasibility study for the Thacker Pass lithium project (“Thacker
Pass”).
- The permitting process for Thacker Pass is underway, with
environmental baseline data collection substantially complete and a
conceptual Mine Plan of Operations submitted to the Bureau of Land
Management (“BLM”).
- Lithium Americas continues to collaborate with Ganfeng on the
development of the pilot plant testing programs for Thacker Pass. A
pilot plant and laboratory is being constructed in Reno, Nevada to
optimize the process (predominantly to reduce the consumption of
sulfuric acid) and to provide feed samples to crystallizer vendors
who will design the equipment and provide performance
guarantees.
- The Company is evaluating potential partnership and financing
scenarios for Thacker Pass.
RheoMinerals:
- The sales of RheoMinerals for the nine months ended September
30, 2018 were $3.4 million (2017 – $3.8 million). Sales for Q3,
2018 were $1.4 million (2017 - $1.1 million).
Finance:
- As at September 30, 2018, the Company had $26.0 million in cash
and cash equivalents.
- As part of the Transaction, Ganfeng has also provided a loan to
Minera Exar to permit Minera Exar to repay $25 million of its
outstanding indebtedness to the Company, of which $17 million was
received by the Company and the balance is repayable by the end of
2018.
- The Company has a $205 million credit facility to finance its
share of capital expenditures in Minera Exar. Since the start of Q3
2018, the Company has received $15 million on its first drawdowns
of this credit facility ($10 million of which occurred during Q3
2018). As part of the Transaction, Ganfeng also provided Lithium
Americas an additional $100 million unsecured, limited recourse,
subordinated loan facility, increasing the Company’s overall credit
availability to $290 million.
Corporate:
- In August 2018, the Company appointed Mr. Jonathan (Jon) Evans
as President and Chief Operating Officer. Jon brings over 20 years
of executive operations experience to his new role, including five
years as a general manager of the Lithium Division at FMC Corp. Due
to the executive appointment, Jon resigned as a director of Lithium
Americas.
Financial
Results:
The following selected financial information is
presented in thousands of US dollars, shares in thousands, unless
otherwise stated and except in relation to per share amounts
The following table summarises the key items
that resulted in the decrease in net loss for the three months
ended September 30, 2018 (Q3 2018) versus the three months ended
September 30, 2017 (Q3 2017), as well as certain offsetting
items:
|
|
|
|
|
|
Financial results |
|
Quarter ended September 30, |
|
Change |
|
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
$ |
|
$ |
|
$ |
|
Organoclay sales |
|
|
1,420 |
|
|
1,059 |
|
|
361 |
|
Cost of sales |
|
|
(2,009 |
) |
|
(1,575 |
) |
|
(434 |
) |
Exploration
expenditures |
|
|
(3,718 |
) |
|
(1,231 |
) |
|
(2,487 |
) |
Organoclay research and
development |
|
|
(149 |
) |
|
(110 |
) |
|
(39 |
) |
General and
administrative expenses |
|
|
(1,651 |
) |
|
(2,762 |
) |
|
1,111 |
|
Share of loss in Joint
Venture |
|
|
(1 |
) |
|
776 |
|
|
(777 |
) |
Stock-based
compensation |
|
|
(938 |
) |
|
(7,139 |
) |
|
6,201 |
|
Foreign exchange
(loss) |
|
|
(722 |
) |
|
(2,347 |
) |
|
1,625 |
|
Other
income |
|
|
335 |
|
|
570 |
|
|
(235 |
) |
Net Loss |
|
|
(7,433 |
) |
|
(12,759 |
) |
|
5,326 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the three months ended September
30, 2018 was $7,433 compared to $12,759 for the three months ended
September 30, 2017. Basic and diluted loss per share was $0.08 in
Q3 2018 versus $0.15 in Q3 2017.
Exploration expenditures were $3,718 in Q3 2018
versus $1,231 in Q3 2017. The increase in the exploration
expenditures is mostly due to advancing the Thacker Pass
project.
The Company’s share of the Minera Exar joint
venture losses in Q3 2018 was $1 compared to a gain of $776 in Q3
2017, which related to recognition of VAT and other taxes
receivable by the joint venture.
General and Administrative expenses decreased in
Q3 2018 to $1,651 versus $2,762 in Q3 2017 primarily due to the
payment of annual bonuses in Q3 2017.
The Company recognized in Q3 2018 a foreign
exchange loss of $722 (Q3 2017 – loss of $2,347) which was a result
of the weakening of the US dollar against the Canadian
dollar.
Qualified Person:
The scientific and technical information in this
news release has been reviewed and approved by Dr. Rene LeBlanc, a
Qualified Person for purposes of NI 43-101 by virtue of his
experience, education and professional association. Mr.
LeBlanc is the Chief Technical Officer of the Company and a Senior
Chemical Engineering Manager at Lithium Nevada Corp., a
wholly-owned subsidiary of the Company. Information on the
Company’s data verification and QA / QC procedures is contained in
Lithium Americas’ current technical reports for the Cauchari-Olaroz
lithium project and the Thacker Pass lithium project, available at
www.sedar.com.
About Lithium
Americas:
Lithium Americas, together with Ganfeng Lithium,
is developing the Caucharí-Olaroz lithium brine project, under
construction in Jujuy, Argentina through its 62.5% interest in
Minera Exar. In addition, Lithium Americas owns 100% of the Thacker
Pass lithium project located in Nevada, the largest known lithium
deposit in the United States. The Company trades on both the
Toronto Stock Exchange and on the New York Stock Exchange, under
the ticker symbol “LAC”.
For further information contact:Lithium Americas
Corp.Investor RelationsSuite 1150 – 355 Burrard StreetVancouver,
BC, V6C 2G8Telephone: 778-656-5820Email:
ir@lithiumamericas.comWebsite: www.lithiumamericas.com
Forward-looking
statements:
This news release contains “forward-looking
information” and “forward-looking statements” (which we refer to
collectively as forward-looking information) under the provisions
of applicable securities legislation. Such forward-looking
information is subject to various risks and uncertainties.
Forward-looking information in this news release includes, but is
not limited to, statements with respect to development activities,
the achievement and anticipated achievement of technical and
development milestones, and commencement of production at
Cauchari-Olaroz, and the potential for partnership and financing
scenarios for the Thacker Pass project. Forward looking information
is subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those projected in the forward-looking information,
including, but not limited to, risks and uncertainties related to
whether there will ever be production at the Company’s mineral
properties, geological, technical, drilling or processing problems,
environmental liabilities and risks inherent in mineral extraction
operations, lack of availability of additional financing, and
obtaining regulatory approvals in a timely manner, or at all. There
can be no assurance that such statements will prove to be accurate,
as actual results and future events could differ materially from
those anticipated in such statements. Forward-looking statements
are made as of the date hereof and the Company does not intend, and
expressly disclaims any obligation to, update or revise the
forward-looking information contained in this news release, except
as required by law. Accordingly, readers are cautioned not to place
undue reliance on forward-looking information.
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