Executive Summary / Key Takeaways

• Lithium Americas Corp. has reached Final Investment Decision (FID) for Phase 1 of its Thacker Pass project, securing comprehensive funding through strategic partnerships with General Motors (GM), Orion Resource Partners, and a significant U.S. Department of Energy (DOE) loan.
• Major construction is actively underway at the Thacker Pass site in Nevada, targeting first production of battery-grade lithium carbonate in late 2027, with ramp-up expected during 2028.
• The company is focused on developing the unique sedimentary lithium resource at Thacker Pass using proprietary extraction technology, which management believes offers potential advantages in recovery rates, water usage, and extraction speed compared to conventional methods.
• Recent financial results reflect the intense capital expenditure and operating costs associated with the development phase, supported by substantial cash reserves and working capital from recent financings.
• Key considerations for investors include successful project execution, managing potential impacts from U.S. trade policy changes, and the outcome of ongoing water rights litigation.

Building the Foundation: A Focused Vision for U.S. Lithium

Lithium Americas Corp. (LAC) stands at a pivotal juncture, transitioning from a development-focused entity to a builder of what could become a cornerstone of the North American battery supply chain. The company's singular focus is the Thacker Pass project in Humboldt County, Nevada – a world-class sedimentary lithium deposit positioned to supply the burgeoning electric vehicle (EV) market in the United States. This strategic concentration was solidified through a separation transaction on October 3, 2023, which saw the current Lithium Americas emerge with the North American assets, including Thacker Pass, and a substantial cash injection of $275.5 million.

The core strategy is clear: bring Thacker Pass Phase 1 into production efficiently and on schedule. This involves overcoming the inherent complexities of developing a large-scale mining and processing operation while leveraging strategic partnerships and technological innovation to unlock the value of the unique sedimentary resource.

The Technological Edge: Tailoring Extraction for Sedimentary Lithium

Unlike traditional hard-rock or brine operations that characterize much of the global lithium supply, Thacker Pass holds lithium within claystone. Developing this resource requires a specialized approach, and LAC is employing a proprietary extraction technology designed specifically for this sedimentary material.

This technology is central to the project's viability and competitive positioning. Management believes it offers tangible benefits over conventional methods, including the potential for 20% higher lithium recovery rates and 15% lower water usage. Furthermore, the process is anticipated to enable a 10-15% faster extraction speed and 20% quicker production cycles, potentially translating into 10% superior operating margins once production is scaled. While precise, directly comparable performance metrics for all alternative technologies are not publicly detailed, the strategic intent is to create a cost-effective and environmentally responsible method tailored to the unique geology of Thacker Pass, providing a crucial competitive moat.

Navigating the Competitive Landscape

The global lithium market is dominated by established players like Albemarle (ALB) and Sociedad Química y Minera de Chile (SQM), who primarily utilize brine and hard-rock extraction methods. These giants benefit from decades of operational experience, established infrastructure, and significant economies of scale, leading to potentially lower operating costs per unit (Albemarle's estimated 20-30% lower than LAC's upfront costs, SQM's 20-25% below industry averages). North American peer Piedmont Lithium (PLL) also focuses on hard-rock resources in the U.S.

LAC's competitive strategy hinges on its strategic location within the U.S., offering a potentially faster path to market for domestic customers (estimated 15-20% faster than relying solely on international supply chains), and its specialized technology for the Thacker Pass resource. While currently in a development phase and reporting losses and negative cash flow, unlike profitable peers (ALB's 2023 revenue growth was 15%, SQM's 12%, both with positive margins and cash flow), LAC's long-term aim is to compete on cost and environmental footprint through its tailored extraction process. The potential for 10-15% efficiency gains in extraction speed and higher recovery rates from the sedimentary resource are key differentiators against traditional methods. Indirect competitors, such as companies developing sodium-ion batteries or advanced recycling processes, could offer alternative materials or supply sources, potentially impacting future lithium demand and pricing. However, the high capital expenditure ($500 million+ per project) and complex regulatory environment act as significant barriers to entry, protecting the position of established and developing players like LAC.

The Funding Narrative: De-Risking Phase 1

Bringing a project the size and scope of Thacker Pass to production requires substantial capital. LAC has successfully orchestrated a series of major financing milestones to de-risk Phase 1 development, culminating in achieving "fully funded status" for this initial phase.

A cornerstone of this strategy is the joint venture established with General Motors. The Investment Agreement, signed October 15, 2024, and closed December 20, 2024, saw GM acquire a 38% interest in the Thacker Pass project for a total contribution of $625 million in cash and letters of credit. This included $330 million in cash at closing and an additional $100 million cash contribution at the Final Investment Decision (FID). LAC retains a 62% majority interest and serves as the project manager. The partnership also includes a critical offtake agreement, extended to 20 years, for up to 100% of Phase 1 production volumes, providing revenue certainty and supporting project financing. GM also secured future offtake rights for Phase 2.

Further solidifying the financial foundation is the $2.26 billion loan from the U.S. Department of Energy, closed on October 28, 2024, under the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program. This loan, specifically for financing the Phase 1 processing facilities, includes $1.97 billion in principal and an estimated $290 million in capitalized interest during construction, with a 24-year maturity and fixed interest rates. The first draw on this loan is currently expected sometime in the third quarter of 2025, contingent on satisfying certain conditions precedent, including project finance model bring down.

Most recently, on April 1, 2025, LAC closed a $250 million strategic investment from Orion Resource Partners. This investment comprised $195 million in senior unsecured convertible notes and $25 million for a Production Payment Agreement (PPA). The notes mature in April 2030, bear initial interest at 9.88% per annum, and have an initial conversion price of $3.78 per share, representing a 43% premium to LAC's 5-day VWAP on March 5, 2025. The PPA entitles Orion to fixed payments ($128/tonne, or $152 with the delayed draw option) and variable payments (0.96% of gross revenue, or 1.14% with the delayed draw option) on the first 41,500 tonnes of lithium produced annually for 72 quarters (fixed) and life of mine (variable), subject to adjustments. Orion also has an option to purchase an additional $30 million in notes.

Contemporaneously with the Orion closing on April 1, 2025, LAC and GM announced the Final Investment Decision (FID) for Thacker Pass Phase 1, triggering additional cash contributions to the JV: $191.6 million from LAC and $100 million from GM. These combined funding sources are designed to fully finance the construction of Phase 1.

Operational Progress and Financial Snapshot

With funding secured, the focus has shifted decisively to execution. Major construction activities are well underway at Thacker Pass. Earthworks are nearing completion, and permanent concrete placement in the processing plant area commenced in early May 2025. Detailed engineering is progressing rapidly, currently over 60% design complete and targeted to reach over 90% by year-end 2025 to enhance execution certainty. Fabrication of structural steel began in April 2025, with installation targeted for September 2025. Manufacturing of long-lead equipment is advancing on schedule.

Supporting infrastructure is also progressing. The first modular housing units for the Workforce Hub, an all-inclusive facility for construction workers in Winnemucca, were installed in Q1 2025, with first occupancy targeted for the second half of 2025. To secure key reagents, LAC has submitted a Plan of Operations for a local limestone quarry, Western Quarry, which is intended to provide a lower-cost source of limestone for the processing flowsheet. The company is also involved in the construction of a transload terminal in Winnemucca, partially supported by an $11.8 million grant from the U.S. Department of Defense, which will be financed through a finance lease.

The company's financial results for the three months ended March 31, 2025, reflect this intense development phase. The net loss for Q1 2025 was $11.5 million, compared to $6.3 million in Q1 2024. This increase was primarily driven by higher general and administrative expenses ($6.5 million vs. $5.8 million), reflecting costs associated with the transition to a domestic U.S. filer and increased reporting requirements related to the DOE Loan and JV, and significantly higher transaction costs ($4.3 million vs. $0.9 million) related to the recently concluded financing activities. A loss on the investment in Ascend Elements ($1.7 million in Q1 2025) also contributed.

Cash and restricted cash stood at $446.9 million as of March 31, 2025, down from $593.9 million at December 31, 2024. This decrease is largely attributable to cash used in investing activities, which surged to $117.9 million in Q1 2025 from $46.1 million in Q1 2024, reflecting the ramp-up in Thacker Pass construction spending following the closing of the DOE Loan and JV. Cash used in operating activities also increased to $18.9 million from $2.2 million. The balance sheet reflects this investment, with mineral properties, plant and equipment increasing by $76.9 million in the quarter. Despite the cash burn associated with construction, the company maintains substantial working capital of $405.9 million, providing liquidity for ongoing development needs.

Outlook and Key Risks

The outlook for Lithium Americas is centered on the successful execution of the Thacker Pass Phase 1 construction. The target remains first production in late 2027, followed by a ramp-up period during 2028. Key milestones in the near term include the expected first draw on the DOE Loan in Q3 2025 and continued progress on engineering, procurement, and construction activities. Analyst estimates, such as Zacks Consensus, project continued net losses ($0 million revenue, -$0.18 EPS for FY 2025) during this pre-production phase, which is consistent with a company focused on large-scale project development.

However, the path to production is not without risks. Changes in U.S. trade policy, including the imposition or increase of tariffs on materials like steel (25% tariff) and other imports (10% tariff announced), could increase construction costs and potentially impact the project budget and schedule. While the company is working to mitigate these impacts, the unpredictable nature of trade policy poses a challenge.

Another notable risk is the ongoing legal challenge to the water rights permits for Phase 1. Although the state court largely upheld the State Engineer's decision in April 2025, two questions were remanded for further analysis, and the claimant has appealed to the Nevada Supreme Court. While the company continues to use its water rights for construction, the final outcome of this litigation remains a factor to monitor.

Furthermore, the successful execution of a project of this scale is inherently complex. While significant de-risking has occurred through detailed engineering and securing long-lead items, construction projects can face unforeseen delays or cost overruns. The terms of the DOE Loan and JV agreements also include various conditions and restrictions that must be adhered to, and the ability to make timely draws on the DOE Loan is critical to maintaining the project schedule.

Conclusion

Lithium Americas Corp. presents a compelling, albeit long-term, investment thesis centered on the development of the Thacker Pass project. The achievement of FID and securing over $4 billion in combined funding from strategic partners and the U.S. government represents a transformative step, significantly de-risking the initial phase of this world-class resource. The company's focus on a specialized extraction technology tailored to the unique sedimentary deposit offers potential operational and environmental advantages that could position it favorably in the market.

While the company is currently in a capital-intensive development phase, reflected in its recent financial performance and cash usage, tangible construction progress is evident on the ground. The path forward requires disciplined execution to meet the late 2027 production target. Investors should weigh the significant potential of unlocking a major domestic lithium supply against the inherent risks of large-scale project development, evolving trade policies, and ongoing legal challenges. The narrative for LAC now shifts from securing funding to building the future of U.S. lithium supply, a story that will unfold through operational milestones and disciplined project delivery.