Lithium Americas nets $250M from Orion for Thacker

Lithium Americas (TSX: LAC; NYSE: LAC) says Orion Resource Partners is investing $250 million (C$357 million) to help develop and build the Thacker Pass lithium project’s first stage in Nevada.

Following the announcement, Lithium Americas’ shares surged 5.6% in morning trading in New York, reaching $2.99 apiece, giving the company a market capitalization of $656 million.

Thacker Pass, home to the largest known measured and indicated lithium resource in North America, was approved by the Trump administration in January 2021, just days before president Joe Biden took office. The project is slated to begin production later this decade as a critical supplier to General Motors (NYSE: GM), which invested $625 million last year to acquire a 38% stake in the venture.

To develop the site, Lithium Americas and GM established a joint venture, Lithium Nevada Ventures, which is expected to generate nearly 2,000 direct jobs.

Once operational, stage one of Thacker Pass is projected to produce 40,000 tonnes of battery-quality lithium carbonate annually, enough to power up to 800,000 electric vehicles. Completion of the first stage is targeted for late 2027.

Orion’s commitment

New York-based Orion’s investment includes multiple funding components: $195 million in senior unsecured convertible notes and $30 million in convertible notes, which Orion has committed to purchasing within two years.

There’s also a $25-million production payment agreement, under which Orion will receive payments based on minerals processed and gross revenue generated by Thacker Pass. The investment is expected to close the week of March 10.

Furthermore, Orion has tentatively agreed to evaluate financing of up to $500 million to develop and build stage two of Thacker Pass.