Lithium Americas (LAC) - 2024 Q2 - Quarterly Report

Condensed Consolidated Interim Financial Statements Condensed Consolidated Interim Statements of Financial Position As of June 30, 2024, the company's total assets significantly increased to $692.2 million from $439.5 million at the end of 2023, primarily driven by a rise in cash and cash equivalents and investments in property, plant, and equipment | | June 30, 2024 ($ thousands) | December 31, 2023 ($ thousands) | | :--- | :--- | :--- | | Total Current Assets | 384,565 | 205,883 | | Total Non-Current Assets | 307,671 | 233,617 | | Total Assets | 692,236 | 439,500 | | Total Current Liabilities | 19,090 | 24,563 | | Total Long-Term Liabilities | 8,566 | 7,475 | | Total Liabilities | 27,656 | 32,038 | | Total Shareholders' Equity | 664,580 | 407,462 | | Total Liabilities and Shareholders' Equity | 692,236 | 439,500 | - The increase in assets was mainly due to cash and cash equivalents rising to $375.8 million from $195.5 million, and property, plant, and equipment increasing to $296.6 million from $206.1 million[14] Condensed Consolidated Interim Statements of Comprehensive Loss For the six months ended June 30, 2024, the company reported a net loss of $12.3 million, a significant shift from a net income of $9.2 million in the same period of 2023 | | Six Months Ended June 30, 2024 ($ thousands) | Six Months Ended June 30, 2023 ($ thousands) | | :--- | :--- | :--- | | General and administrative expenses | (9,094) | (5,358) | | Transaction costs | (2,181) | (6,830) | | Gain/(loss) on financial instruments | (4,484) | 26,959 | | Finance and other income | 6,076 | 52 | | Net Income/(Loss) | (12,285) | 9,167 | | Basic and Diluted EPS | ($0.07) | $0.06 | Condensed Consolidated Interim Statements of Equity Shareholders' equity increased from $407.5 million at December 31, 2023, to $664.6 million at June 30, 2024, primarily due to $275 million in gross proceeds from a public offering, partially offset by net loss and share issuance costs | Description | Amount ($ thousands) | | :--- | :--- | | Balance, December 31, 2023 | 407,462 | | Shares issued from public offering | 275,000 | | Share issuance cost | (12,854) | | Equity compensation amortization | 7,257 | | Net loss | (12,285) | | Balance, June 30, 2024 | 664,580 | Condensed Consolidated Interim Statements of Cash Flows For the six months ended June 30, 2024, net cash provided by financing activities was $261.7 million, primarily from a public offering, resulting in a significant increase in cash and cash equivalents to $375.8 million | Activity | Six Months Ended June 30, 2024 ($ thousands) | | :--- | :--- | | Net cash used in operating activities | (4,118) | | Net cash used in investing activities | (77,294) | | Net cash provided by financing activities | 261,726 | | Change in Cash and Cash Equivalents | 180,314 | | Cash and Cash Equivalents - End of Period | 375,830 | Notes to the Condensed Consolidated Interim Financial Statements Note 1. Background and Nature of Operations Lithium Americas Corp. was formed following a separation on October 3, 2023, focusing on advancing the Thacker Pass lithium project in Nevada, and relies on equity financing as it has not yet generated significant revenue - The company's core asset is the Thacker Pass lithium project in Humboldt County, Nevada[3] - The company was created through a separation transaction from its former parent company, now named Lithium Americas (Argentina) Corp., on October 3, 2023[38] - To date, the company has not generated significant revenues and depends on equity financing to fund its operations and development activities[42] Note 2. Basis of Preparation and Presentation The unaudited condensed consolidated interim financial statements are prepared in accordance with IFRS (IAS 34), with comparative periods presented on a carve-out basis from the former parent company - The financial statements are prepared in accordance with IFRS, specifically IAS 34 for interim reporting[43] - Financial data for periods prior to the separation on October 3, 2023, are presented on a carve-out basis, including allocations of corporate costs from the former parent company[24][40][44] - The company's presentation and functional currency is the US dollar (USD)[61] Note 3. Summary of Material Accounting Policies The company's accounting policies are consistent with 2023 Annual Financials, involving significant judgments in impairment assessment of Thacker Pass and fair value estimation of Ascend Elements investment, with no impairment identified for Thacker Pass despite a market capitalization decrease - Following a decrease in market capitalization, an impairment assessment was conducted for the Thacker Pass project as of June 30, 2024, which concluded that no impairment was necessary[63][88] - Management applied significant judgment in estimating the fair value of its investment in Ascend Elements, a private company, based on market trends and peer company analysis[46] - The company is currently evaluating the impact of IFRS 18, a new standard for financial statement presentation effective January 1, 2027[28][65] Note 8. Property, Plant and Equipment The net book value of property, plant, and equipment increased to $296.6 million as of June 30, 2024, primarily due to $90.2 million in additions to the Thacker Pass project, with no impairment recognized despite a market capitalization decline | PP&E Category | Net Book Value at Dec 31, 2023 ($ thousands) | Net Book Value at June 30, 2024 ($ thousands) | | :--- | :--- | :--- | | Thacker Pass | 202,819 | 292,970 | | Other PP&E | 3,263 | 3,645 | | Total | 206,082 | 296,615 | - The company conducted an impairment test on Thacker Pass, determining its recoverable amount based on a discounted cash flow model. Key assumptions included an average lithium price of $27,079/tonne over 25 years, a Phase 1 capital cost of $2.93 billion, and a discount rate of 11.6%[75][89][90][77] - The company has commitments for royalty payments on Thacker Pass, including an 8% gross revenue royalty up to a cumulative $22 million, which then reduces to 4%[57][59] Note 10. Agreements with General Motors The company has a strategic agreement with General Motors (GM) for a total investment of $650 million, with the second tranche contingent on funding for Thacker Pass Phase 1, and GM holding an offtake agreement for up to 100% of Phase 1 production - GM's investment is structured in two tranches: Tranche 1 ($320.1 million) is complete, and Tranche 2 (up to $329.9 million) is pending the company meeting certain funding conditions for Thacker Pass[80][93] - The Tranche 2 agreement is accounted for as a derivative liability, with a fair value of $360 thousand as of June 30, 2024[94][115] - GM has an offtake agreement to purchase up to 100% of Phase 1 production at market rates for a term of ten years, with extension options[116][86] Note 12. Share Capital and Equity Compensation In April 2024, the company completed a public offering of 55 million common shares, raising $275 million in gross proceeds to advance the Thacker Pass project, and maintains an equity incentive plan for employees and directors - On April 22, 2024, the company raised $275 million in gross proceeds ($262 million net) through a public offering of 55 million common shares[119] | Equity Unit Type | Outstanding at Dec 31, 2023 (thousands) | Granted in H1 2024 (thousands) | Outstanding at June 30, 2024 (thousands) | | :--- | :--- | :--- | :--- | | RSUs | 1,650 | 1,936 | 2,739 | | DSUs | 95 | 42 | 137 | | PSUs | 628 | 442 | 750 | Other Notes Other notes detail the company's financial position and activities, including increased cash and cash equivalents, fair value losses on investments, transaction costs for DOE loan due diligence, and a subsequent grant from the U.S. Department of Defense - Cash and Cash Equivalents (Note 4): Increased to $375.8 million at June 30, 2024, from $195.5 million at December 31, 2023[48] - Investments (Notes 6 & 7): Recognized a fair value loss of $1.9 million on its investment in Green Technology Metals and a $2.6 million loss on its investment in Ascend Elements for the six months ended June 30, 2024[68][52] - DOE Loan (Note 17 & Background): The company received a conditional commitment for a $2.26 billion loan from the U.S. Department of Energy (DOE) and incurred $1.7 million in related due diligence costs in H1 2024[9][127] - Subsequent Event (Note 22): On August 5, 2024, the company received an $11.8 million grant from the U.S. Department of Defense to support local infrastructure upgrades[145]