Shares of Lithium Americas Corp. (NYSE: LAC) are on a notable uptick this morning, driven by the announcement of a significant financing milestone. On the US stock charts, LAC’s stock increased 22.01% to $5.05 per share as of the most recent check.
LAC share price surge was caused by the successful closing of a $2.26 billion loan from the U.S. Department of Energy (DOE) Loan Programs Office’s Advanced Technology Vehicles Manufacturing (ATVM) Loan Program.
How Lithium Americas will Utilize the Loan?
The newly secured DOE Loan will be used to finance the construction and expansion of processing facilities at Lithium Americas (LAC) Thacker Pass project in Humboldt County, Nevada. The loan also covers interest that accrues throughout construction, with interest rates set at suitable U.S. Treasury rates for the loan’s duration.
Working Together Strategically with GM to Promote Development
In addition to the DOE Loan, Lithium Americas announced a partnership with General Motors (GM) through an investment agreement disclosed on October 16, 2024. GM will establish a joint venture (JV) with LAC to support the development of Thacker Pass.
As part of the deal, GM will acquire a 38% ownership stake in the project, contributing $625 million in cash and letters of credit, including a $195 million letter of credit facility. This facility will serve as collateral for reserve account requirements related to the DOE Loan.
Lithium Americas (LAC) anticipates using the DOE Loan for the first time in mid-2025. Closing the GM JV Transaction, financing DOE Loan reserve accounts through the GM LC Facility, obtaining more corporate working capital, and bringing down the project finance model are prerequisites for the first draw.
Job Creation and Domestic Lithium Production
The Thacker Pass project is expected to have a significant economic impact on the US. Over the course of three years, the project is anticipated to generate around 1,800 direct jobs and produce 40,000 tons of battery-grade lithium carbonate yearly in its initial phase. The operating phase will provide 360 full-time employment to support the project’s expected 40-year mine life.
