GM to commit $625M cash, letters of credit to new JV with Lithium Americas

Lithium Americas Corp. (LAC) announced earlier that the company and General Motors (GM) have entered into a new investment agreement to establish a joint venture for the purpose of funding, developing, constructing and operating Thacker Pass in Humboldt County, Nevada. The JV Transaction will deliver $625M of cash and letters of credit from GM to Thacker Pass alongside the conditional commitment for a $2.3B U.S. Department of Energy loan announced earlier this year. Under the terms of the Investment Agreement, GM will acquire a 38% asset-level ownership stake in Thacker Pass for $625M in total cash and letters of credit, including $430M of direct cash funding to the JV to support the construction of Phase 11 and a $195M letter of credit facility that can be used as collateral to support reserve account requirements under the DOE Loan. The JV Transaction replaces the $330M Tranche 2 common equity investment commitment from GM under its original investment agreement with the company announced in January 2023. The JV Transaction is incremental to GM’s February 2023 Tranche 1 investment of $320M, which resulted in GM acquiring approximately 15 million common shares of Lithium Americas. In addition to the JV Transaction, GM has agreed to extend its existing offtake agreement for up to 100% of production volumes from Phase 1 of Thacker Pass to 20 years to support the expected maturity of the DOE Loan. Upon closing of the JV, GM will also enter into an additional 20-year offtake agreement for up to 38% of Phase 2 production volumes and will retain its existing right of first offer on the remaining Phase 2 production volumes. “Our relationship with GM has been significantly strengthened with this joint venture as we continue to pursue a mutual goal to develop a robust domestic lithium supply chain by advancing the development of Thacker Pass,” said Jonathan Evans, President and CEO of Lithium Americas. “Today’s joint venture announcement is a win-win for GM and Lithium Americas. GM’s JV Investment demonstrates their continued support and helps us to unlock the previously announced $2.3B DOE Loan. We will be working closely with GM to advance towards the final investment decision, which we are targeting by the end of the year.” Shares of Lithium Americas gained 22% in premarket trading.