Lithium Americas (TSX, NYSE: LAC) has completed its previously arranged transaction with partner Ganfeng Lithium on the ownership structure on the Caucharí-Olaroz lithium project under development in Jujuy, Argentina.
As part of the agreement, Ganfeng has subscribed for new shares of Minera Exar SA, the joint venture company that holds the Cauchari-Olaroz project, for cash consideration of US$16 million.
This would increase the Chinese lithium miner’s interest in the joint venture to 51%, with Lithium Americas owning the remaining 49%. The Cauchari-Olaroz project was previously a 50-50 joint venture between the companies.
Lithium Americas has also received US$40 million in cash from the proceeds of a non-interest-bearing loan from Ganfeng.
“The transaction with Ganfeng Lithium further strengthens our long-term partnership in Argentina as we work together to bring Cauchari-Olaroz into production,” Lithium Americas president and CEO Jon Evans said in a press release.
“With an additional US$40 million in cash on our balance sheet and over US$200 million in available capital to fund our share of Cauchari-Olaroz, Lithium Americas remains in a strong financial position as we advance both of our projects,” he added.
Last week, the company announced that construction activities at Cauchari-Olaroz were set to resume after experiencing delays with the project due to the coronavirus pandemic. The operation was first suspended in March to comply with government restrictions and was forced to halt work once again in July when two workers tested positive for Covid-19.
Slated to begin production in 2021, the Cauchari-Olaroz project is half-finished and represents one of the few large-scale lithium operations in development globally.
Shares of Lithium Americas rose 9.5% by midday Aug. 28. The Vancouver-based miner has a C$904-million market capitalization.