Lithium Americas – Strategic transaction with Ganfeng Lithium to jointly advance Caucharí-Olaroz

Lithium Americas Corp. has entered into definitive transaction agreements to implement a number of transactions, pursuant to which, among other things, a subsidiary of Sociedad Química y Minera de Chile S.A. (“SQM”) has agreed to sell all of its interest in Minera Exar S.A., the holding company for the Caucharí-Olaroz lithium brine project, to a subsidiary of Jiangxi Ganfeng Lithium Co., Ltd. (“Ganfeng Lithium” or “GFL”). As a result of the Transaction, Ganfeng Lithium will become Lithium Americas’ partner in developing and operating the Project, which is currently under development in Jujuy province. Lithium Americas’ interest in Caucharí-Olaroz will increase from 50% to 62.5%, with Ganfeng Lithium holding the remaining 37.5% interest.

In connection with the Transaction, Ganfeng Lithium has agreed to provide Lithium Americas with a new US$100 million limited recourse, subordinated loan facility to fully fund Lithium Americas’ share of Caucharí-Olaroz’ capital expenditures.

Under the terms of the Transaction, Ganfeng Lithium has agreed to purchase SQM’s interest in Minera Exar. SQM will receive an aggregate of US$87.5 million in cash (including repayment of outstanding indebtedness owing from Minera Exar and certain other costs) plus a deferred payment of US$50 million, which is payable on satisfaction of certain agreed milestones when the Project has successfully reached production.

As a result of the Transaction, on closing, Ganfeng Lithium will own 37.5% and Lithium Americas will own 62.5% (an increase from 50% previously as a result of the conversion of previously contributed funds) of Minera Exar.

Ganfeng Lithium and Lithium Americas have agreed to enter into a new shareholders’ agreement governing their respective ownership interests and the business and operations of Minera Exar. The new shareholders’ agreement will provide Lithium Americas and Ganfeng Lithium with shared decision-making over certain decisions of Minera Exar. The board of directors of Minera Exar will have representatives from both Lithium Americas and Ganfeng Lithium consisting of three Lithium Americas nominees and two Ganfeng Lithium nominees. In addition, a management committee consisting of representatives of Lithium Americas and Ganfeng Lithium will be formed to direct the development of the Project.


Loan Facility

Pursuant to the Transaction, Ganfeng Lithium has agreed to provide Lithium Americas with a US$100 million subordinated loan facility (the “Loan Facility”). The Loan Facility is repayable exclusively out of future distributions from Minera Exar. The Loan Facility complements Lithium Americas’ existing senior credit facilities from Ganfeng Lithium and Bangchak Corporation in the aggregate amount of US$205 million and provides Lithium Americas with committed financing to fully support all of Lithium Americas’ capital expenditure funding obligations for the development of Stage 1 of the Project.


Caucharí-Olaroz Project Update

In Argentina, there are currently over 400 employees and contractors mobilized to develop Caucharí-Olaroz. Minera Exar’s management team will remain in place and continue to grow and leverage Ganfeng Lithium’s technical and project execution expertise. Ganfeng Lithium will commit their existing engineering and testing teams, including dedicated engineering personnel, to Caucharí-Olaroz.

Construction of Caucharí-Olaroz remains on track to commence production of battery-grade lithium carbonate in 2020. The Stage 1 development contemplates a production capacity of 25,000 metric tonnes per annum (“tpa”) of lithium carbonate. Construction of production wells and ponds is well underway with the first pond scheduled to be filled in second half of 2018 and plant construction expected to commence in early 2019.

Complementing Lithium Americas’ experience and expertise in project and process development, and exploration, Ganfeng Lithium is expected to provide access to substantial internal engineering, construction and project execution expertise. Lithium Americas and Ganfeng Lithium both bring extensive management experience that is aligned to the rapid development of lithium resources.

Beyond Caucharí-Olaroz, Lithium Americas and Ganfeng Lithium have agreed to explore further opportunities to work together on future partnerships.

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