The board of directors for Lithium Americas Corp. has unanimously approved the execution of an arrangement agreement providing for the reorganization of the company that will result in the separation of its North American and Argentine business units into two independent public companies, Lithium Argentina and Lithium Americas (NewCo).
Lithium Argentina will own Lithium Americas’ current interest in its Argentina lithium assets, including the 44.8% interest in Caucharí-Olaroz, the 100%-owned Pastos Grandes project and the 65% interest in the Sal de la Puna project. Lithium Americas (NewCo) will own the 100%-owned Thacker Pass lithium project in Humboldt County, Nevada, as well as the company’s investments in Green Technology Metals Ltd. and Ascend Elements, Inc.
The company said the separation is expected to provide each company with a sharper business and strategic focus, enabling the separate businesses to better attract, retain and motivate key employees. It will also enable each business to pursue its independent and unique growth opportunities. Lithium Argentina, for example would focus on the ramp-up of Caucharí-Olaroz, pursuit of Stage 2 expansion and further growth with the significant resource, along with an advancement and construction decision regarding Pastos Grandes and potential upside at Sal de la Puna. Meanwhile, Lithium Americas (NewCo) would focus on construction and production of Phase 1 of Thacker Pass, and planning and execution of Phase 2 and beyond.
The separation could also provide each company with independent access to capital, resulting in more tailored capital allocation practices, thereby allowing each company to expand deeper into its specific domain to maximize the value of its resources.
“We are excited to clear a key milestone in moving forward to separate Lithium Americas into two distinct leading lithium companies,” said Jonathan Evans, President and CEO of Lithium Americas. “We look forward to the value that can be created for shareholders through Lithium Americas (NewCo)’s unique position and the development of one of the largest lithium resources in the U.S., as well as the value generated through Lithium Argentina’s near-term production portfolio with a significant growth pipeline from two high-quality projects.”
Upon completion of the separation, Evans will become president and CEO of Lithium Americas (NewCo), and John Kanellitsas, who is currently executive vice chair of Lithium Americas, will become the interim president and CEO of Lithium Argentina.
Completion of the separation is subject to customary conditions and approvals, including the receipt of the Canada Revenue Agency ruling, all required third-party, regulatory, and shareholder approvals.