0001564590-21-025583.txt : 20210507 0001564590-21-025583.hdr.sgml : 20210507 20210507162925 ACCESSION NUMBER: 0001564590-21-025583 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 20210506 FILED AS OF DATE: 20210507 DATE AS OF CHANGE: 20210507 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LITHIUM AMERICAS CORP. CENTRAL INDEX KEY: 0001440972 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-38350 FILM NUMBER: 21903222 BUSINESS ADDRESS: STREET 1: SUITE 300 - 900 WEST HASTINGS STREET CITY: VANCOUVER STATE: A1 ZIP: V6C 1E6 BUSINESS PHONE: 778-656-5820 MAIL ADDRESS: STREET 1: SUITE 300 - 900 WEST HASTINGS STREET CITY: VANCOUVER STATE: A1 ZIP: V6C 1E6 FORMER COMPANY: FORMER CONFORMED NAME: Western Lithium USA Corp DATE OF NAME CHANGE: 20140521 FORMER COMPANY: FORMER CONFORMED NAME: WESTERN LITHIUM CANADA CORP DATE OF NAME CHANGE: 20080725 6-K 1 lac-6k_20210506.htm 6-K lac-6k_20210506.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of: May, 2021

Commission file number: 001-38350

 

Lithium Americas Corp.

(Translation of Registrant’s name into English)

 

900 West Hastings Street, Suite 300,
Vancouver, British Columbia,
Canada V6C 1E5

 

(Address of Principal Executive Office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover:

Form 20-F [ ]          Form 40-F   [X]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]

 

 


 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Lithium Americas Corp.

(Registrant)

 

By:

“Jonathan Evans”

Name:

Jonathan Evans

Title:

Chief Executive Officer

 

Dated: May 6, 2021

 

 


 

 

EXHIBIT INDEX

 

 

 

EX-99.1 2 lac-ex991_97.htm EX-99.1 lac-ex991_97.htm

 

Exhibit 99.1

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 (Expressed in US Dollars)

 

 


 

 

LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)

(Expressed in thousands of US dollars)

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

Note

 

2021

 

 

2020

 

 

 

 

 

$

 

 

$

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

4

 

 

514,205

 

 

 

148,070

 

Receivables, prepaids and deposits

 

 

 

 

2,850

 

 

 

1,250

 

Deferred financing costs

 

 

 

 

972

 

 

 

1,094

 

 

 

 

 

 

518,027

 

 

 

150,414

 

Assets held for sale

 

 

 

 

-

 

 

 

3,926

 

 

 

 

 

 

518,027

 

 

 

154,340

 

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

Restricted cash

 

 

 

 

-

 

 

 

150

 

Loans to Exar Capital

 

5

 

 

43,822

 

 

 

34,562

 

Investment in Cauchari-Olaroz project

 

5

 

 

139,475

 

 

 

131,394

 

Property, plant and equipment

 

6

 

 

1,802

 

 

 

1,935

 

Exploration and evaluation assets

 

 

 

 

4,762

 

 

 

4,342

 

 

 

 

 

 

189,861

 

 

 

172,383

 

TOTAL ASSETS

 

 

 

 

707,888

 

 

 

326,723

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

 

 

3,727

 

 

 

5,204

 

Current portion of long-term liabilities

 

7

 

 

1,510

 

 

 

3,550

 

 

 

 

 

 

5,237

 

 

 

8,754

 

LONG-TERM LIABILITIES

 

 

 

 

 

 

 

 

 

 

Credit and loan facilities

 

7

 

 

134,961

 

 

 

121,221

 

Decommissioning provision

 

 

 

 

326

 

 

 

326

 

Other liabilities

 

7

 

 

5,509

 

 

 

5,719

 

 

 

 

 

 

140,796

 

 

 

127,266

 

TOTAL LIABILITIES

 

 

 

 

146,033

 

 

 

136,020

 

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

 

 

686,333

 

 

 

307,152

 

Contributed surplus

 

 

 

 

29,104

 

 

 

27,204

 

Accumulated other comprehensive loss

 

 

 

 

(3,487

)

 

 

(3,487

)

Deficit

 

 

 

 

(150,095

)

 

 

(140,166

)

TOTAL SHAREHOLDERS’ EQUITY

 

 

 

 

561,855

 

 

 

190,703

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

707,888

 

 

 

326,723

 

 

 

Subsequent events (Note 15)

Approved for issuance on May 5, 2021

On behalf of the Board of Directors:

“Fabiana Chubbs”

 

“George Ireland”

Director

 

Director

 

2

 

 


 

 

LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Unaudited)

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

 

 

 

 

 

Three Months Ended March 31,

 

 

 

Note

 

2021

 

 

2020

 

 

 

 

 

$

 

 

$

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

Exploration expenditures

 

11

 

 

(4,682

)

 

 

(5,405

)

General and administrative

 

10

 

 

(2,293

)

 

 

(2,089

)

Equity compensation

 

8

 

 

(1,284

)

 

 

(2,818

)

Share of loss of Cauchari-Olaroz project

 

 

 

 

(500

)

 

 

-

 

 

 

 

 

 

(8,759

)

 

 

(10,312

)

OTHER ITEMS

 

 

 

 

 

 

 

 

 

 

Transaction costs

 

 

 

 

(43

)

 

 

(646

)

Foreign exchange gain/ (loss)

 

 

 

 

114

 

 

 

(2,371

)

Finance costs

 

 

 

 

(2,496

)

 

 

-

 

Finance and other income

 

 

 

 

1,147

 

 

 

131

 

 

 

 

 

 

(1,278

)

 

 

(2,886

)

NET LOSS BEFORE TAX

 

 

 

 

(10,037

)

 

 

(13,198

)

Tax expense

 

 

 

 

-

 

 

 

(450

)

NET LOSS BEFORE DISCONTINUED OPERATIONS

 

 

 

 

(10,037

)

 

 

(13,648

)

 

 

 

 

 

 

 

 

 

 

 

INCOME/(LOSS) FROM DISCONTINUED OPERATIONS

 

 

 

 

108

 

 

 

(368

)

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

 

 

(9,929

)

 

 

(14,016

)

 

 

 

 

 

 

 

 

 

 

 

OTHER COMPREHENSIVE (LOSS)/INCOME

 

 

 

 

 

 

 

 

 

 

ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO NET (LOSS)/INCOME

 

 

 

 

 

 

 

 

 

 

Unrealized income on translation to reporting currency

 

 

 

 

-

 

 

 

2,180

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL COMPREHENSIVE LOSS

 

 

 

 

(9,929

)

 

 

(11,836

)

BASIC AND DILUTED LOSS PER SHARE FROM CONTINUING OPERATIONS

 

 

 

 

(0.09

)

 

 

(0.15

)

BASIC AND DILUTED LOSS PER SHARE

 

 

 

 

(0.09

)

 

 

(0.16

)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-

BASIC AND DILUTED

 

 

 

 

115,109

 

 

 

89,912

 

 

 

 

 

3

 

 


 

 

LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(Expressed in thousands of US dollars and shares in thousands)

 

 

 

Share capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number

 

 

Amount

 

 

Contributed

surplus

 

 

Accumulated

other

comprehensive

income/(loss)

 

 

Deficit

 

 

Shareholders’

equity

 

 

 

of Shares

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Authorized share capital:

  Unlimited common shares without par value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance December 31, 2019

 

 

89,843

 

 

 

200,913

 

 

 

28,404

 

 

 

(3,867

)

 

 

(65,829

)

 

 

159,621

 

Shares issued on conversion of RSUs and exercise of stock options

 

 

161

 

 

 

244

 

 

 

(199

)

 

 

-

 

 

 

-

 

 

 

45

 

Equity compensation (Note 8)

 

 

-

 

 

 

-

 

 

 

2,751

 

 

 

-

 

 

 

-

 

 

 

2,751

 

DSUs issued in lieu of directors' fees

 

 

-

 

 

 

-

 

 

 

123

 

 

 

-

 

 

 

-

 

 

 

123

 

Credit to equity as a result of the Project Investment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(14,016

)

 

 

(14,016

)

Other comprehensive income

 

 

-

 

 

-

 

 

 

-

 

 

 

2,180

 

 

 

-

 

 

 

2,180

 

Balance March 31, 2020

 

 

90,004

 

 

 

201,157

 

 

 

31,079

 

 

 

(1,687

)

 

 

(79,845

)

 

 

150,704

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020

 

 

101,103

 

 

 

307,152

 

 

 

27,204

 

 

 

(3,487

)

 

 

(140,166

)

 

 

190,703

 

Shares issued on conversion of RSUs, DSUs and exercise of stock options

 

 

579

 

 

 

1,790

 

 

 

(1,084

)

 

 

-

 

 

 

-

 

 

 

706

 

Shares issued pursuant to the underwritten public offering (Note 8)

 

 

18,182

 

 

 

400,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

400,000

 

Shares issuance costs (Note 8)

 

 

 

 

 

 

(22,609

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,609

)

Equity compensation (Note 8)

 

 

-

 

 

 

-

 

 

 

2,903

 

 

 

-

 

 

 

-

 

 

 

2,903

 

DSUs issued in lieu of directors' fees

 

 

-

 

 

 

-

 

 

 

81

 

 

 

-

 

 

 

-

 

 

 

81

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9,929

)

 

 

(9,929

)

Balance March 31, 2021

 

 

119,864

 

 

 

686,333

 

 

 

29,104

 

 

 

(3,487

)

 

 

(150,095

)

 

 

561,855

 

 

4

 

 


 

 

LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Expressed in thousands of US dollars)

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

 

 

$

 

 

$

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net loss

 

 

(9,929

)

 

 

(14,016

)

Items not affecting cash and other items:

 

 

 

 

 

 

 

 

Equity compensation

 

 

1,284

 

 

 

2,818

 

Depreciation

 

 

194

 

 

 

189

 

Foreign exchange (gain)/loss

 

 

(114

)

 

 

2,371

 

Share of loss of Cauchari-Olaroz project

 

 

500

 

 

 

-

 

Other items

 

 

(2,720

)

 

 

(2,436

)

Changes in non-cash working capital items:

 

 

 

 

 

 

 

 

(Increase)/decrease in receivables, prepaids and deposits

 

 

(1,614

)

 

 

107

 

Decrease in inventories

 

 

-

 

 

 

(189

)

(Decrease)/increase in accounts payable and accrued liabilities

 

 

983

 

 

 

2,942

 

Net cash used in operating activities

 

 

(11,416

)

 

 

(8,214

)

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Loans to Exar Capital (Note 5)

 

 

(16,170

)

 

 

-

 

Contribution to Investment in Cauchari-Olaroz project

 

 

(1,067

)

 

 

-

 

Proceeds from sale of assets held for sale

 

 

4,034

 

 

 

-

 

Additions to exploration and evaluation assets

 

 

(420

)

 

 

-

 

Release of restricted cash

 

 

150

 

 

 

-

 

Additions to property, plant and equipment

 

 

(61

)

 

 

(27,665

)

Net cash used in investing activities

 

 

(13,534

)

 

 

(27,665

)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from stock option exercises

 

 

706

 

 

 

45

 

Proceeds from the underwritten public offering (Note 8)

 

 

400,000

 

 

 

-

 

Equity offering issuance costs (Note 8)

 

 

(22,609

)

 

-

 

Drawdowns from the credit facilities (Note 7)

 

 

13,370

 

 

 

34,200

 

Finance lease repayments

 

 

(72

)

 

 

(65

)

Repayment of long-term borrowings

 

 

(424

)

 

 

(35

)

Other (Note 7)

 

 

-

 

 

 

500

 

Net cash provided by financing activities

 

 

390,971

 

 

 

34,645

 

EFFECT OF FOREIGN EXCHANGE ON CASH

 

 

114

 

 

 

(258

)

CHANGE IN CASH AND CASH EQUIVALENTS

 

 

366,135

 

 

 

(1,492

)

CASH AND CASH EQUIVALENTS - BEGINNING OF THE PERIOD

 

 

148,070

 

 

 

83,614

 

CASH AND CASH EQUIVALENTS - END OF THE PERIOD

 

 

514,205

 

 

 

82,122

 

 

Supplemental disclosure with respect to cash flows (Note 13).

 

 

 

5

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

1.

NATURE OF OPERATIONS

 

Lithium Americas Corp. (“Lithium Americas” or the “Company”) is a Canadian-based resource company focused on the advancement of two significant lithium projects: the Cauchari-Olaroz project (“Cauchari-Olaroz”), located in Jujuy Province of Argentina, and the Thacker Pass project (“Thacker Pass”), located in north-western Nevada, USA.  Cauchari-Olaroz is a lithium brine project and is owned by a legal entity in Argentina, Minera Exar S.A. (“Minera Exar”). Minera Exar is owned by the Company (49%) and Ganfeng Lithium Co. Ltd. (“Ganfeng”) (51%) and accounted for by the Company using the equity method. Thacker Pass is a sedimentary-based lithium property located in the McDermitt Caldera in Humboldt County, Nevada, and is 100% owned by the Company’s wholly owned subsidiary, Lithium Nevada Corp. (“Lithium Nevada”).

The Company’s common shares are listed on the Toronto Stock Exchange and the New York Stock Exchange under the symbol “LAC”.

The Company’s head office and principal address is Suite 300, 900 West Hastings Street, Vancouver, British Columbia, Canada, V6C 1E5.

 

To date, the Company has not generated significant revenues from operations and has relied on equity and other financings to fund operations. The underlying values of exploration and evaluation assets, property, plant and equipment and the investment in Cauchari-Olaroz project are dependent on the existence of economically recoverable reserves, securing and maintaining title and beneficial interest in the properties, and the ability of the Company to obtain the necessary financing to complete permitting, development, and to attain future profitable operations.

 

 

2.

BASIS OF PREPARATION AND PRESENTATION

 

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) applicable to the preparation of interim financial statements, including International Accounting Standard (“IAS”) 34, Interim Financial Reporting. These condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2020, which have been prepared in accordance with IFRS.

These condensed consolidated interim financial statements are expressed in US dollars, the Company’s presentation currency, and have been prepared on a historical cost basis. The Company has used the same accounting policies and methods of computation as in the consolidated financial statements for the year ended December 31, 2020.

 

 

 


 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

3.

SIGNIFICANT ACCOUNTING POLICIES

Critical Accounting Estimates and Judgments

The preparation of these condensed consolidated interim financial statements in conformity with IFRS applicable to the preparation of interim financial statements requires judgments, estimates, and assumptions that affect the amounts reported. Those estimates and assumptions concerning the future may differ from actual results. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The significant estimates and judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty are substantially the same as those that management applied to the consolidated financial statements for the year ended December 31, 2020 other than the judgment around functional currency as described below.

COVID-19 Uncertainty

In March 2020, the World Health Organization declared a global pandemic related to COVID-19. Many countries, including Canada, the United States and Argentina, where the Company operates, announced mandatory emergency measures and restrictions on businesses and individuals to mitigate the spread of the virus. The outbreak and the related mitigation measures have had and will continue to have an adverse impact on global economic conditions as well as on the Company’s activities. The effects of the pandemic will ultimately depend on many factors that are out of the Company’s control, including but not limited to, the severity, extent and duration of the pandemic or any resurgences in the future, the availability of approved vaccines and the timing for completion of vaccine distribution programs around the globe.

In Q1 2021 construction activities at the Caucharí-Olaroz lithium project advanced while strictly complying with COVID-19 protocol, as developed by Minera Exar and approved by authorities in Jujuy province where the project is located. Construction costs related to the Caucharí-Olaroz lithium project continue to be capitalized in accordance with the Company’s policy, including costs arising from construction of the project during the pandemic such as testing and quarantining of employees, rental of additional camp facilities in order to comply with distancing requirements, and other additional contractors’ costs as a result of COVID-19 restrictions.

Functional currency

Items included in the financial statements of the Company and each of the Company’s subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). Effective January 1, 2021, the functional currency of Lithium Americas changed from the Canadian dollar to the US dollar as a result of the significant US proceeds from equity offerings and increasing amounts of expenditures denominated in US dollars.   The change in functional currency was accounted for on a prospective basis, with no impact of this change on prior year comparative information.

Newly Adopted Accounting Standards and Amendments

The Company adopted Interest Rate Benchmark Reform - Phase 2: Amendments to IFRS 9, IAS 39, IFRS 4 and IFRS 16 (the "Phase 2 Amendments") effective on January 1, 2021. Interest rate benchmark reform ("Reform") refers to a global reform of interest rate benchmarks, which includes the replacement of some interbank offered rates with alternative benchmark rates.

 

7

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

3.

SIGNIFICANT ACCOUNTING POLICIES (continued)

The Phase 2 Amendments provide a practical expedient requiring the effective interest rate to be adjusted when accounting for changes in the basis for determining the contractual cash flows of financial assets and liabilities that relate directly to the Reform rather than applying modification accounting which might have resulted in a gain or loss. In addition, the Phase 2 Amendments require disclosures to assist users in understanding the effect of the Reform on the Company's financial instruments and risk management strategy. The Company’ senior Credit Facility and Limited Recourse Loan Facility as defined in Note 7 are indexed to London interbank offered rates ("LIBOR") that have not yet transitioned to alternative benchmark rates at the end of the current reporting period.

 

4.

CASH AND CASH EQUIVALENTS

 

 

 

March 31, 2021

 

 

December 31, 2020

 

 

 

$

 

 

$

 

Cash

 

 

47,480

 

 

 

148,070

 

Short-term bank deposits

 

 

466,725

 

 

 

-

 

 

 

 

514,205

 

 

 

148,070

 

As at March 31, 2021, $4,585 of cash and short-term deposits were held in Canadian dollars (2020– $3,165), $509,620 of cash and short-term deposits were held in US dollars (2020– $144,905). Cash and short-term deposits earn interest between 0.25%-1.3%.

 

5.  

INVESTMENT IN CAUCHARI-OLAROZ PROJECT

As at March 31, 2021, the Company and Ganfeng are 49% and 51% shareholders, respectively, in Minera Exar, the company that holds the Cauchari-Olaroz project located in the Jujuy province of Argentina. In addition, the Company and Ganfeng are 49% and 51% shareholders, respectively, in Exar Capital B.V. (“Exar Capital”), the company in the Netherlands that provides financing to Minera Exar for the purpose of advancing the construction of the Cauchari-Olaroz project (the investment in Minera Exar and Exar Capital together, the “Investment in Cauchari-Olaroz project”). Minera Exar and Exar Capital are accounted for using the equity method of accounting. The Company and Ganfeng manage the Cauchari-Olaroz project with a shareholders’ agreement in place regulating key aspects of governance of the project which provides the Company with significant influence over Minera Exar and strong minority shareholder protective rights.

2020 Cauchari Transaction

On August 27, 2020, the Company closed a transaction with Ganfeng whereby Ganfeng subscribed, through a wholly-owned subsidiary, for newly issued shares of Minera Exar, for cash consideration of $16,327, increasing its interest in the Cauchari-Olaroz project from 50% to 51%, with Lithium Americas holding the remaining 49% interest.


 

8

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

5.

INVESTMENT IN CAUCHARI-OLAROZ PROJECT (continued)

In addition, the Company and Ganfeng restructured Exar Capital to reflect the parties’ 51%/49% proportionate ownership of Minera Exar. As part of this restructuring, Ganfeng provided $40,000 to Exar Capital in non-interest-bearing loans, repayable in 2029 (with a right for an additional one-year extension by the Company or Ganfeng) and contributed $689 to Exar Capital’s equity to increase its interest from 37.5% to 51%. Proceeds of the loans from Ganfeng were used by Exar Capital to repay $40,000 of loans owed to Lithium Americas (the Minera Exar and Exar Capital transactions together, the “2020 Cauchari Transaction”).

Upon closing of the 2020 Cauchari Transaction, Ganfeng became the controlling shareholder of Minera Exar and Exar Capital while Lithium Americas received fulsome minority shareholder protective rights. The Company retains a 49% interest and significant influence over Minera Exar and Exar Capital and as a result, is equity accounting for these investments from closing of the 2020 Cauchari Transaction.

Loans to Minera Exar and Exar Capital B.V.

The Company has entered into the following loan agreements with Minera Exar and Exar Capital to fund construction of the Cauchari-Olaroz project. Changes in the loans’ balances are summarized below:

 

 

 

$

 

Loans from the Company to Exar Capital, as at December 31, 2019

 

 

37,959

 

Loans from the Company to Exar Capital at face value

 

 

14,500

 

Initial difference between the face value and the fair value of loans to Exar Capital

 

 

(7,746

)

Elimination of loans as a result of Joint Operation accounting

 

 

(3,377

)

Accrued interest

 

 

3,337

 

Loans from the Company to Exar Capital prior to the 2020 Cauchari Transaction

 

 

44,673

 

Loans from the Company to Exar Capital after the 2020 Cauchari Transaction at face value

 

 

14,700

 

Initial difference between the face value and the fair value of loans to Exar Capital

 

 

(7,265

)

Reversal of elimination of loans as a result of the 2020 Cauchari Transaction

 

 

28,132

 

Derecognition of share of loans from Exar Capital to Minera Exar as a result of the 2020 Cauchari Transaction

 

 

(26,368

)

Repayment of loans as a result of the 2020 Cauchari Transaction

 

 

(40,000

)

Gain on early repayment of the $40,000 loans

 

 

19,608

 

Accrued interest

 

 

1,082

 

Loans from the Company to Exar Capital, as at December 31, 2020

 

 

34,562

 

Loans from the Company to Exar Capital at face value

 

 

16,170

 

Initial difference between the face value and the fair value of loans to Exar Capital

 

 

(7,974

)

Accrued interest

 

 

1,064

 

Loans from the Company to Exar Capital, as at March 31, 2021

 

 

43,822

 

 

Loans by the Company and Ganfeng to Exar Capital are non-interest bearing.

 

During the three months ended March 31, 2021, the Company provided $16,170 and Ganfeng provided $16,830 non-interest bearing loans to Exar Capital to fund their respective 49% and 51% shares of the Cauchari-Olaroz construction costs. The Company accounts for loans initially at fair value and subsequently at amortized cost.

 

The fair value of the loans at inception was calculated using a discounted cash flow valuation method applying market interest rates. The difference between the face value and the fair value of the loans provided was recognized as part of Investment in Cauchari-Olaroz project.

 

9

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

5.

INVESTMENT IN CAUCHARI-OLAROZ PROJECT (continued)

Investment in Cauchari-Olaroz Project

 

Changes in the Investment in Cauchari-Olaroz Project are summarized below:

 

 

 

Minera Exar

S.A.

 

 

Exar Capital

B.V.

 

 

Total

 

 

 

$

 

 

$

 

 

$

 

Investment in Joint Venture, as at December 31, 2019

 

 

-

 

 

 

-

 

 

 

-

 

Recognition of Investment in Cauchari-Olaroz project

 

 

119,537

 

 

 

2,287

 

 

 

121,824

 

Contribution to Investment in Cauchari-Olaroz project

 

 

853

 

 

 

7,265

 

 

 

8,118

 

Share of income of Cauchari-Olaroz project

 

 

2,113

 

 

 

4,200

 

 

 

6,313

 

Elimination of unrealized gain on intercompany transactions

 

 

-

 

 

 

(4,861

)

 

 

(4,861

)

Investment in Cauchari-Olaroz project, as at December 31, 2020

 

 

122,503

 

 

 

8,891

 

 

 

131,394

 

Contribution to Investment in Cauchari-Olaroz project

 

 

855

 

 

 

7,974

 

 

 

8,829

 

Share of income of Cauchari-Olaroz project

 

 

-

 

 

 

3,523

 

 

 

3,523

 

Elimination of unrealized gain on intercompany transactions

 

 

-

 

 

 

(4,271

)

 

 

(4,271

)

Investment in Cauchari-Olaroz project, as at March 31, 2021

 

 

123,358

 

 

 

16,117

 

 

 

139,475

 

 

Minera Exar’s Commitments and Contingencies

 

As at March 31, 2021, Minera Exar has the following commitments (Company’s 49% share):

 

Annual royalty of $98 due in May of every year and expiring in 2041.

 

Aboriginal programs agreements with seven communities located in the Cauchari-Olaroz project area have terms from five to thirty years. The annual fees due are $127 in 2021, $172 in 2022 and $218 between 2023 and 2061, assuming that these agreements will be extended for the life of the project. The annual fees are subject to change. Minera Exar’s obligations to make the payments are subject to continued development of the project and commencement and continuation of production operations on the project.

 

Commitments related to contracts for construction of evaporation ponds and other construction contracts of $3,473.

Los Boros Option Agreement

On September 11, 2018, Minera Exar exercised a purchase option agreement (“Option Agreement”) with Grupo Minero Los Boros (“Los Boros”), entered into on March 28, 2016, for the transfer of title to Minera Exar of certain mining properties that comprised a portion of the Cauchari-Olaroz project.

Under the terms of the Option Agreement, Minera Exar paid $100 upon signing and exercised the purchase option for total consideration of $12,000 to be paid in sixty quarterly installments of $200. The first installment becomes due upon the earlier occurrence of the following two conditions: (i) the third anniversary of the purchase option exercise date, being September 11, 2021; or (ii) the beginning of commercial exploitation with a minimum production of 20,000 tons of lithium carbonate equivalent. As security for the transfer of title of the mining properties, Los Boros granted to Minera Exar a mortgage over those mining properties for $12,000. In accordance with the Option Agreement, on November 27, 2018, Minera Exar paid Los Boros a $300 royalty which was due within 10 days of the start date of construction of the commercial plant.

 

10

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

5.

INVESTMENT IN CAUCHARI-OLAROZ PROJECT (continued)

Pursuant to the Option Agreement, a 3% net profit interest royalty (the “Los Boros Royalty”) is payable to Los Boros by Minera Exar annually within 10 business days after calendar year end, in Argentinian pesos, for a period of 40 years.

Minera Exar has the right to cancel the first 20 years of the Los Boros Royalty in exchange for a one-time payment of $7,000 and the next 20 years for an additional payment of $7,000.  

JEMSE Arrangement

In 2012, to comply with Province of Jujuy regulations regarding government participation in mineral projects, Minera Exar entered into a letter of intent with and granted a conditional right to Jujuy Energia y Mineria Sociedad del Estado (“JEMSE”), a mining investment company owned by the government of Jujuy Province in Argentina, to acquire an 8.5% equity interest in Minera Exar (the “Acquisition Right”) for consideration of one US dollar and the provision of management services as required to develop the project.

Upon closing of the 2020 Cauchari Transaction, Minera Exar and JEMSE entered into a definitive agreement, which allows JEMSE to exercise its Acquisition Right and, among other items, provides for the reimbursement by JEMSE of its 8.5% pro rata share of the construction costs for the Cauchari-Olaroz project to the Company and Ganfeng through the assignment of one-third of the dividends otherwise payable to JEMSE in future periods.

The annual distribution of dividends by Minera Exar to all shareholders including JEMSE, will only be considered once all of Minera Exar’s annual commitments related to the project’s debt have been met.

On April 4, 2021, JEMSE exercised its Acquisition Right (Note 15).

 

6.

PROPERTY, PLANT AND EQUIPMENT

 

 

 

Cauchari-Olaroz1

 

 

Equipment

and machinery

 

 

Other2

 

 

Total

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2019

 

 

158,309

 

 

 

951

 

 

 

1,889

 

 

 

161,149

 

Additions

 

 

59,853

 

 

 

247

 

 

 

283

 

 

 

60,383

 

Capitalization of interest

 

 

5,132

 

 

 

-

 

 

 

-

 

 

 

5,132

 

Deconsolidation

 

 

(223,294

)

 

 

-

 

 

 

-

 

 

 

(223,294

)

Disposals

 

 

-

 

 

 

-

 

 

 

(83

)

 

 

(83

)

Foreign exchange

 

 

-

 

 

 

-

 

 

 

19

 

 

 

19

 

As at December 31, 2020

 

 

-

 

 

 

1,198

 

 

 

2,108

 

 

 

3,306

 

Additions

 

 

-

 

 

 

17

 

 

 

47

 

 

 

64

 

Foreign exchange

 

 

-

 

 

 

-

 

 

 

(3

)

 

 

(3

)

As at March 31, 2021

 

 

-

 

 

 

1,215

 

 

 

2,152

 

 

 

3,367

 

 

11

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

6.

PROPERTY, PLANT AND EQUIPMENT (continued)

 

 

 

Cauchari-Olaroz1

 

 

Equipment

and machinery

 

 

Other2

 

 

Total

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Accumulated depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2019

 

 

1,455

 

 

 

197

 

 

 

573

 

 

 

2,225

 

Depreciation for the period

 

 

279

 

 

 

274

 

 

 

380

 

 

 

933

 

Deconsolidation of Minera Exar fixed assets

 

 

(1,734

)

 

 

-

 

 

 

-

 

 

 

(1,734

)

Disposals

 

 

-

 

 

 

-

 

 

 

(53

)

 

 

(53

)

As at December 31, 2020

 

 

-

 

 

 

471

 

 

 

900

 

 

 

1,371

 

Depreciation for the period

 

 

-

 

 

 

82

 

 

 

112

 

 

 

194

 

As at March 31, 2021

 

 

-

 

 

 

553

 

 

 

1,012

 

 

 

1,565

 

 

 

 

Cauchari-Olaroz1

 

 

Equipment

and machinery

 

 

Other2

 

 

Total

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Net book value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2020

 

 

-

 

 

 

727

 

 

 

1,208

 

 

 

1,935

 

As at March 31, 2021

 

 

-

 

 

 

662

 

 

 

1,140

 

 

 

1,802

 

1 Prior to closing the 2020 Cauchari Transaction, this includes the Company’s 50% share of the Cauchari-Olaroz project construction costs and project-related costs incurred directly by the Company (Note 5).

2 Other category includes right of use assets with $1,369 cost and $590 accumulated depreciation as at March 31, 2021.

 

 

7.

LONG-TERM BORROWINGS

 

 

 

March 31, 2021

 

 

December 31 2020

 

 

 

$

 

 

$

 

Current portion of long-term borrowings