Lithium Americas (LAC) - 2024 Q1 - Quarterly Report

Financial Statements Condensed Consolidated Interim Statements of Financial Position As of March 31, 2024, Lithium Americas Corp. reported total assets of $436.5 million, a slight decrease from $439.5 million at year-end 2023. The decrease was primarily driven by a reduction in cash and cash equivalents from $195.5 million to $147.2 million, offset by an increase in property, plant, and equipment from $206.1 million to $268.3 million due to continued investment in the Thacker Pass project. Total liabilities decreased to $30.0 million from $32.0 million Condensed Consolidated Interim Statements of Financial Position (Unaudited) | | March 31, 2024 ($ thousands) | December 31, 2023 ($ thousands) | | :--- | :--- | :--- | | CURRENT ASSETS | | | | Cash and cash equivalents | 147,242 | 195,516 | | Receivables, prepaids and deposits | 6,088 | 10,367 | | Total Current Assets | 153,330 | 205,883 | | NON-CURRENT ASSETS | | | | Investment in Green Technology Metals | 1,256 | 2,580 | | Investment in Ascend Elements | 8,582 | 8,582 | | Property, plant and equipment | 268,265 | 206,082 | | Other assets | 4,033 | 15,315 | | Total Non-Current Assets | 283,194 | 233,617 | | TOTAL ASSETS | 436,524 | 439,500 | | CURRENT LIABILITIES | | | | Accounts payable and accrued liabilities | 20,793 | 23,361 | | GM transaction derivative liability | 528 | 348 | | Total Current Liabilities | 22,087 | 24,563 | | LONG-TERM LIABILITIES | | | | Leases and other liabilities | 6,476 | 6,613 | | Decommissioning provision | 1,469 | 862 | | Total Long-Term Liabilities | 7,945 | 7,475 | | TOTAL LIABILITIES | 30,032 | 32,038 | | TOTAL SHAREHOLDERS' EQUITY | 406,492 | 407,462 | | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 436,524 | 439,500 | Condensed Consolidated Interim Statements of Comprehensive Loss For the three months ended March 31, 2024, the company reported a net loss of $6.0 million, or ($0.04) per share, compared to a net loss of $1.7 million, or ($0.01) per share, for the same period in 2023. The increased loss was primarily due to higher general and administrative expenses and a loss on financial instruments, compared to a significant gain in the prior year period Condensed Consolidated Interim Statements of Comprehensive Loss (Unaudited) | | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :--- | :--- | :--- | | General and administrative expenses | (4,314) | (1,615) | | Equity compensation | (1,234) | (195) | | Transaction costs | (865) | (4,028) | | Gain (loss) on financial instruments | (1,504) | 8,246 | | Finance and other income | 1,909 | 9 | | NET LOSS | (6,008) | (1,717) | | TOTAL COMPREHENSIVE LOSS | (6,008) | (1,717) | | BASIC AND DILUTED LOSS PER SHARE | (0.04) | (0.01) | Condensed Consolidated Interim Statements of Equity Total shareholders' equity slightly decreased from $407.5 million at December 31, 2023, to $406.5 million at March 31, 2024. The decrease was primarily due to the net loss of $6.0 million for the period, partially offset by increases in share capital and contributed surplus related to equity compensation Changes in Shareholders' Equity for Q1 2024 | | Amount ($ thousands) | | :--- | :--- | | Balance, December 31, 2023 | 407,462 | | Shares issued on conversion of share-based awards | - | | Equity compensation amortization | 5,038 | | Net loss | (6,008) | | Balance, March 31, 2024 | 406,492 | Condensed Consolidated Interim Statements of Cash Flows Cash and cash equivalents decreased by $48.3 million during the first quarter of 2024, ending at $147.2 million. The decrease was driven by $46.5 million used in investing activities, primarily for additions to property, plant, and equipment for the Thacker Pass project, and $1.5 million used in operating activities Condensed Consolidated Interim Statements of Cash Flows (Unaudited) | | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (1,536) | (18,413) | | Net cash used in investing activities | (46,513) | (9,870) | | Net cash (used in)/provided by financing activities | (225) | 336,184 | | CHANGE IN CASH AND CASH EQUIVALENTS | (48,274) | 307,901 | | CASH AND CASH EQUIVALENTS - BEGINNING | 195,516 | 636 | | CASH AND CASH EQUIVALENTS - END | 147,242 | 308,537 | Notes to the Condensed Consolidated Interim Financial Statements Note 1: Background and Nature of Operations Lithium Americas Corp. (New LAC) was formed through a separation from Lithium Americas (Argentina) Corp. (Old LAC) on October 3, 2023, to own and advance the North American assets, primarily the Thacker Pass lithium project in Nevada. The company is in the development stage and has not generated significant revenue. Key financing includes a $650 million investment from General Motors and a conditional commitment for a $2.26 billion loan from the U.S. Department of Energy (DOE) - The company was created via a separation transaction on October 3, 2023, to hold the North American assets of the former Lithium Americas Corp., with its primary focus on the Thacker Pass project[8][12] - General Motors (GM) agreed to a $650 million investment, with the first tranche of $320.1 million completed in February 2023[14] - On March 12, 2024, the company received a conditional commitment from the U.S. Department of Energy (DOE) for a $2.26 billion loan to finance the construction of processing facilities at Thacker Pass[15] Note 2: Basis of Preparation and Presentation The unaudited condensed consolidated interim financial statements were prepared in accordance with IFRS, specifically IAS 34, Interim Financial Reporting. The comparative financial data for the period ended March 31, 2023, was prepared on a "carve-out" basis from the former parent company (Old LAC), as the company did not operate as a separate legal entity before October 3, 2023 - Financial statements are prepared in accordance with IFRS and IAS 34[17] - Financial results for the comparative period (Q1 2023) are presented on a "carve-out" basis, including allocations of shared corporate expenses from the former parent company[18][19] Note 8: Property, Plant and Equipment The net book value of property, plant, and equipment (PP&E) increased significantly to $268.3 million as of March 31, 2024, from $206.1 million at the end of 2023. This increase is primarily due to $62.5 million in additions to the Thacker Pass project during the quarter, reflecting ongoing development and construction activities Property, Plant and Equipment Movement (Net Book Value) | | Thacker Pass ($ thousands) | Other ($ thousands) | Total ($ thousands) | | :--- | :--- | :--- | :--- | | As at Dec 31, 2023 | 202,819 | 3,263 | 206,082 | | Additions (Q1 2024) | 62,546 | 22 | 62,568 | | Depreciation (Q1 2024) | - | (385) | (385) | | As at Mar 31, 2024 | 265,365 | 2,900 | 268,265 | - Prepayments of $4.0 million related to housing for construction employees and project insurance for Thacker Pass are included in Other assets[39] Note 10: Agreements with General Motors The company has a comprehensive agreement with General Motors (GM) involving a two-tranche equity investment totaling $650 million and an offtake agreement for Thacker Pass production. The first tranche of $320.1 million is complete. The second tranche of up to $329.9 million is pending satisfaction of certain conditions and is treated as a derivative liability, with its fair value fluctuating based on the company's share price and volatility GM Tranche 2 Agreements The second tranche investment from GM of up to $329.9 million is contingent on securing sufficient funding for Phase 1 of Thacker Pass. This agreement is accounted for as a derivative liability, which had a fair value of $528 thousand as of March 31, 2024, an increase from $348 thousand at year-end 2023, resulting in a $180 thousand loss recognized in the period - GM's second tranche investment of up to $329.9 million is contingent on the Company securing sufficient funding to complete Phase 1 development of Thacker Pass[45] GM Tranche 2 Derivative Liability Movement | | Amount ($ thousands) | | :--- | :--- | | As at December 31, 2023 | (348) | | Loss on change in fair value (Q1 2024) | (180) | | As at March 31, 2024 | (528) | Offtake Agreement Under the offtake agreement, GM has the right to purchase up to 100% of the lithium carbonate produced during Phase 1 of the Thacker Pass project. The pricing will be based on prevailing market rates, and the initial term is for ten years, with an option for GM to extend for another five years - GM may purchase up to 100% of Thacker Pass Phase 1 production at market-based prices[52] - The agreement term is ten years for Phase 1, with a five-year extension option for GM. GM also has a right of first offer on Phase 2 production[52] Note 12: Share Capital and Equity Compensation As of March 31, 2024, the company had 162.2 million common shares outstanding. During the first quarter, the company granted 1,936 Restricted Share Units (RSUs) and 442 Performance Share Units (PSUs) to employees and consultants, and 19 Deferred Share Units (DSUs) to directors under its Equity Incentive Plan. Total equity compensation expense recognized in the income statement was $1.2 million - As of March 31, 2024, there were 162,151 thousand common shares issued and outstanding[58] Equity Awards Granted in Q1 2024 | Award Type | Units Granted (thousands) | Estimated Fair Value ($ thousands) | | :--- | :--- | :--- | | Restricted Share Units (RSUs) | 1,936 | 9,337 | | Performance Share Units (PSUs) | 442 | 2,793 | | Deferred Share Units (DSUs) | 19 | 128 | Outstanding Equity Awards as of March 31, 2024 | Award Type | Units Outstanding (thousands) | | :--- | :--- | | Restricted Share Units (RSUs) | 3,278 | | Performance Share Units (PSUs) | 981 | | Deferred Share Units (DSUs) | 114 | Note 15: General and Administrative Expenses General and administrative (G&A) expenses for the first quarter of 2024 were $4.3 million, a significant increase from $1.6 million in the same period of 2023. The rise was primarily driven by higher salaries, benefits, and directors' fees, which grew to $2.5 million from $0.9 million, reflecting the company's expansion as a standalone public entity General and Administrative Expenses Breakdown | | Three months ended March 31, 2024 ($ thousands) | Three months ended March 31, 2023 ($ thousands) | | :--- | :--- | :--- | | Salaries, benefits and directors' fees | 2,540 | 912 | | Office and administration | 488 | 328 | | Professional fees | 690 | 57 | | Investor and government relations | 358 | 119 | | Total | 4,314 | 1,615 | Note 17: Transactions Costs Transaction costs for Q1 2024 amounted to $865 thousand, compared to $4.0 million in Q1 2023. The current period costs were primarily related to due diligence for the DOE Loan ($604 thousand) and other financing activities ($261 thousand). The prior year's costs were dominated by allocations for the company's separation and the GM investment Transactions Costs Breakdown | | Three months ended March 31, 2024 ($ thousands) | Three months ended March 31, 2023 ($ thousands) | | :--- | :--- | :--- | | DOE Loan due diligence costs | 604 | - | | Other financing costs | 261 | - | | Separation cost allocation | - | 2,474 | | General Motors investment | - | 1,554 | | Total | 865 | 4,028 | Note 21: Financial Instruments The company manages financial risks including credit, liquidity, and foreign currency risk. Credit risk is managed by holding cash with a major Canadian bank. Liquidity risk is addressed by maintaining sufficient cash reserves ($147.2 million) to cover current liabilities ($22.1 million). Foreign currency risk is minimal, with only $1.4 million held in Canadian dollars - The company classifies its financial instruments into a three-level fair value hierarchy. The investment in GT1 is Level 1, the GM Tranche 2 derivative is Level 2, and the investment in Ascend Elements is Level 3[79][82] - As of March 31, 2024, the company had cash and cash equivalents of $147.2 million to settle current liabilities of $22.1 million, indicating a strong short-term liquidity position[85] - Foreign currency risk is limited, as only $1.4 million in cash is held in Canadian dollars. A 10% change in the USD/CAD exchange rate would result in an approximate gain/loss of only $144 thousand[88] Note 22: Subsequent Event Subsequent to the quarter-end, on April 22, 2024, the company completed a major financing transaction. It closed an underwritten public offering of 55 million common shares at $5.00 per share, raising gross proceeds of $275 million (approximately $263 million net). These funds are intended to advance the construction and development of the Thacker Pass project - On April 22, 2024, the company completed a public offering of 55 million common shares at $5.00 per share[89] - The offering generated gross proceeds of $275 million, with net proceeds of approximately $263 million, which will be used for the development of Thacker Pass[89] - Underwriters have an option to purchase up to an additional 8.25 million shares for 30 days after the closing[90]