Lithium Americas: Placing Shares Under Review Ahead of Business Separation

We are placing Lithium Americas LAC under review as the firm separates its North America and Argentina businesses. Current shareholders in Lithium Americas will be issued shares of both companies, which will begin trading independently on Oct. 4. The North American company will retain the Lithium Americas name and will trade on the New York Stock Exchange and Toronto Stock Exchange under the ticker LAC. The Argentina company will be named Lithium Argentina and will trade on the NYSE and TSE under the ticker LAAC. We plan to cover both companies following the separation.

The new company, named Lithium Americas, will contain the Thacker Pass lithium project in the U.S., which is currently under construction, and we expect the first production will occur in the middle of the decade. Thacker Pass is one of the largest lithium resources in the world and has the potential to expand volumes well beyond management’s initial plan for 80,000 metric tons annual capacity. We forecast a long-term capacity of 240,000 metric tons. The company will also hold equity stakes in Green Technologies and Ascend Elements.

Lithium Argentina will contain the Cauchari-Olaroz project, which just began production earlier this year. We expect this project will quickly ramp up production near its phase 1 capacity of 40,000 metric tons, at which point the project should become a low-cost producer, in line with other Argentina brine resources. We expect the project will begin a phase 2 capacity expansion next year. The company will also hold the Pastos Grandes basin project, which is under development. We forecast this project will enter production toward the end of the decade.

Correction (Oct. 3, 2023): An earlier version of this note referred to the Tokyo Stock Exchange, rather than the Toronto Stock Exchange.