Lithium Americas (LAC) 6-K Consolidated Statements of Financial Position

Exhibit 99.1

 

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)

(Expressed in thousands of US dollars)

		June 30,			December 31,			January 1,
	Note	2024			2023			2023
					Restated *			Restated *
		$			$			$
CURRENT ASSETS
Cash and cash equivalents	5		96,196			122,293			194,471
Short-term bank deposits			-			-			157,631
Prepayments to Minera Exar for lithium carbonate purchases	7		-			6,673			-
Receivables from purchasers for lithium carbonate	7		12,074			-			-
Other receivables, prepaids and deposits			4,065			4,609			3,990
			112,335			133,575			356,092
NON-CURRENT ASSETS
Associates and other investments			-			-			31,343
Investment in Sal de la Puna Project	6		180,967			181,270			-
Loans to Exar Capital	7		357,859			320,869			223,122
Investment in Cauchari-Olaroz Project	7		33,925			59,581			41,507
Long-term receivable from JEMSE			7,574			7,394			6,813
Property, plant and equipment	8		9,646			9,245			9,026
Exploration and evaluation assets	9		343,788			343,092			348,645
			933,759			921,451			660,456
TOTAL ASSETS			1,046,094			1,055,026			1,016,548
CURRENT LIABILITIES
Accounts payable and accrued liabilities			5,055			9,649			16,540
Payable to Minera Exar for lithium carbonate purchases	7		14,666			-			-
Customer advances	7		-			2,322			-
Convertible notes interest and other liabilities			2,608			2,608			3,105
Current liabilities excluding equity-settleable convertible notes			22,329			14,579			19,645
Equity-settleable convertible notes	10		199,443			200,361			204,472
			221,772			214,940			224,117
NON-CURRENT LIABILITIES
Deferred income tax liability	18		-			10,659			-
Decommissioning provision			-			-			478
Other liabilities			367			496			7,951
			367			11,155			8,429
TOTAL LIABILITIES			222,139			226,095			232,546
SHAREHOLDERS’ EQUITY
Share capital			1,477,515			1,475,930			1,029,485
Contributed surplus			19,126			17,678			30,226
Accumulated other comprehensive loss			(3,487	)		(3,487	)		(3,487	)
Deficit			(669,199	)		(661,190	)		(272,222	)
TOTAL SHAREHOLDERS’ EQUITY			823,955			828,931			784,002
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY			1,046,094			1,055,026			1,016,548

*The comparative information has been reclassified as a result of the application of amendments to IAS 1 as discussed in Note 3.

Approved for issuance on August 13, 2024

On behalf of the Board of Directors:

“Robert Doyle”	“George Ireland”
Director	Director

  1

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Unaudited)

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

		Three Months Ended June 30,						Six Months Ended June 30,
	Note	2024			2023			2024			2023
		$			$			$			$
EXPENSES
Exploration and evaluation expenditures	14		(2,756	)		(6,224	)		(5,841	)		(8,199	)
General and administrative	13		(3,035	)		(3,058	)		(7,085	)		(7,402	)
Equity compensation	11		(1,192	)		(1,081	)		(2,570	)		(1,873	)
Share of loss of Cauchari-Olaroz Project	7		(14,527	)		(1,171	)		(26,514	)		(3,382	)
Share of loss of Arena Minerals			-			(307	)		-			(677	)
Share of loss of Sal de la Puna Project	6		(31	)		(187	)		(303	)		(187	)
			(21,541	)		(12,028	)		(42,313	)		(21,720	)
OTHER ITEMS
Transaction costs			(512	)		(1,829	)		(1,258	)		(3,639	)
Gain on financial instruments measured at fair value	10		6,083			14,633			10,826			15,955
Finance costs	15		(6,189	)		(5,622	)		(12,204	)		(10,989	)
Foreign exchange gain	19		1,134			4,033			1,613			5,615
Finance and other income	16		12,449			15,737			24,668			26,579
			12,965			26,952			23,645			33,521
(LOSS)/INCOME FROM CONTINUING OPERATIONS BEFORE TAXES			(8,576	)		14,924			(18,668	)		11,801
Tax recovery	18		10,751			-			10,659			-
INCOME/(LOSS) FROM CONTINUING OPERATIONS			2,175			14,924			(8,009	)		11,801
INCOME FROM DISCONTINUED OPERATIONS	4		-			10,885			-			7,609
NET INCOME/(LOSS)			2,175			25,809			(8,009	)		19,410
TOTAL COMPREHENSIVE INCOME/(LOSS)			2,175			25,809			(8,009	)		19,410
BASIC AND DILUTED LOSS PER SHARE FROM CONTINUING OPERATIONS
Income/(loss) per share - basic			0.01			0.09			(0.05	)		0.08
Income/(loss) per share - diluted			0.01			0.09			(0.05	)		0.08
BASIC AND DILUTED LOSS PER SHARE FROM DISCONTINUED OPERATIONS
Income per share - basic			-			0.07			-			0.05
Income per share - diluted			-			0.07			-			0.05
BASIC AND DILUTED LOSS PER SHARE TOTAL
Income/(loss) per share - basic			0.01			0.16			(0.05	)		0.13
Income/(loss) per share - diluted			0.01			0.16			(0.05	)		0.13
Weighted average number of common shares outstanding - basic total			161,194			157,834			160,981			150,363
Weighted average number of common shares outstanding - diluted total			166,199			161,822			165,986			154,351

  2

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(Expressed in thousands of US dollars, shares in thousands)

	Share capital
	Number		Amount			Contributed surplus			Accumulated other comprehensive loss			Deficit			Shareholders’ equity
	of shares		$			$			$			$			$
Authorized share capital: Unlimited common shares without par value
Balance December 31, 2022		135,035		1,029,485			30,226			(3,487	)		(272,222	)		784,002
Shares issued on conversion of RSUs, DSUs and exercise of stock options		1,425		7,174			(7,018	)		-			-			156
Shares issued pursuant to the GM investment		15,002		286,954			-			-			-			286,954
Share issuance costs		-		(15,217	)		-			-			-			(15,217	)
Shares issued pursuant to Arena Minerals acquisition		8,456		163,203			-			-			-			163,203
Equity compensation		-		-			4,152			-			-			4,152
DSUs issued in lieu of directors' fees		-		-			329			-			-			329
RSUs issued in lieu of accrued bonuses		-		-			3,109			-			-			3,109
Net income		-		-			-			-			19,410			19,410
Balance June 30, 2023		159,918		1,471,599			30,798			(3,487	)		(252,812	)		1,246,098
Balance, December 31, 2023		160,679		1,475,930			17,678			(3,487	)		(661,190	)		828,931
Shares issued on conversion of RSUs, DSUs, PSUs, and exercise of stock options		551		1,585			(1,585	)		-			-			-
Equity compensation (Note 11)		-		-			3,033			-			-			3,033
Net loss		-		-			-			-			(8,009	)		(8,009	)
Balance June 30, 2024		161,230		1,477,515			19,126			(3,487	)		(669,199	)		823,955

  3

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Expressed in thousands of US dollars)

			Six Months Ended June 30,
	Note		2024			2023
			$			$
OPERATING ACTIVITIES
(Loss)/income from continuing operations				(8,009	)		11,801
Income from discontinued operations				-			7,609
Consolidated net (loss)/income				(8,009	)		19,410
Items not affecting cash and other items:
Equity compensation		11		3,033			3,333
Depreciation				424			1,033
Deferred tax recovery		18		(10,659	)		-
Foreign exchange gain				(1,613	)		(5,615	)
Share of loss of Cauchari-Olaroz Project		7		26,514			3,382
Share of loss of Arena Minerals				-			677
Share of loss of Sal de la Puna Project		6		303			187
Gain on financial instruments measured at fair value		10		(10,826	)		(15,956	)
Finance costs (net)				(11,570	)		(3,580	)
Payment of interest on the convertible notes and debt facilities		10		(2,264	)		(2,264	)
Changes in non-cash working capital items:
Increase in receivables, prepaids and deposits				(11,198	)		(2,889	)
Increase in accounts payable and accrued liabilities				12,147			7,491
Decrease in net prepayments made for lithium carbonate				4,351			(3,861	)
Cash used in operating activities of continuing operations				(9,367	)		(6,261	)
Cash used in operating activities of discontinued operations		4		-			(24,658	)
Net cash used in operating activities				(9,367	)		(30,919	)
INVESTING ACTIVITIES
Loans to Exar Capital		7		(41,979	)		(62,230	)
Proceeds from repayment of loans by Exar Capital		7		26,476			-
Contribution to Investment in Cauchari-Olaroz project		7		(858	)		(1,159	)
Proceeds from withdrawal of short-term bank deposits				-			100,000
Change in cash as a result of Arena Minerals acquisition				-			(2,592	)
Additions to exploration and evaluation assets				(696	)		(1,023	)
Additions to property, plant and equipment				(825	)		(2,876	)
Cash (used)/provided by investing activities of continuing operations				(17,882	)		30,120
Cash used in investing activities of discontinued operations		4		-			(57,266	)
Net cash used in investing activities				(17,882	)		(27,146	)
FINANCING ACTIVITIES
Proceeds from equity awards exercises				-			156
Lease payments and other				(461	)		(9	)
Cash (used)/provided by financing activities of continuing operations				(461	)		147
Cash provided by financing activities of discontinued operations		4		-			302,871
Net cash (used)/provided by financing activities				(461	)		303,018
Effect of foreign exchange on cash				1,613			5,615
CHANGE IN CASH AND CASH EQUIVALENTS				(26,097	)		250,568
CASH AND CASH EQUIVALENTS - BEGINNING OF THE PERIOD				122,293			194,471
CASH AND CASH EQUIVALENTS - END OF THE PERIOD				96,196			445,039

  4

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

1. NATURE OF OPERATIONS

Lithium Americas (Argentina) Corp. (“Lithium Argentina”, the “Company” or “LAAC”), formerly Lithium Americas Corp. (“Lithium Americas” or “LAC”), is a Canadian-based resource company focused on advancing the Cauchari-Olaroz project (“Cauchari-Olaroz”) to full production. Cauchari-Olaroz is a lithium brine project located in the Salar de Olaroz and Salar de Cauchari in Jujuy province, north-western Argentina. The Company also owns the Pastos Grandes lithium project (“Pastos Grandes”) acquired through the acquisition of Millennial Lithium Corp. (“Millennial”) on January 25, 2022, and a 65% ownership interest in the Sal de la Puna project (“Sal de la Puna”), owned by the Company’s wholly-owned subsidiary Arena Minerals Inc. (“Arena Minerals”) acquired on April 20, 2023. Pastos Grandes and Sal de la Puna are lithium brine projects located in Salta province, in north-western Argentina.

The Company’s interest in Cauchari-Olaroz is held through a 44.8% ownership interest in Minera Exar S.A. (“Minera Exar”), a company incorporated under the laws of Argentina. Ganfeng Lithium Co. Ltd. (“Ganfeng”) owns 46.7% of Minera Exar with the remaining 8.5% interest held by Jujuy Energia y Mineria Sociedad del Estado (“JEMSE”), a mining investment company owned by the provincial government of Jujuy. Cauchari-Olaroz is in the commissioning and ramp up stage and achieved first lithium production as part of commissioning in June 2023.

On March 5, 2024, the Company announced execution of a definitive agreement with a subsidiary of Ganfeng whereby Ganfeng agreed to acquire $70,000 in newly issued shares of Proyecto Pastos Grandes S.A. (“PGCo”) (the “Pastos Grandes Transaction”), the Company’s indirect wholly-owned Argentinian subsidiary holding the Pastos Grandes project in Salta, Argentina, which is expected to represent an approximate 15% interest in PGCo and the Pastos Grandes project. The Pastos Grandes Transaction is subject to applicable regulatory approvals and other closing conditions and is expected to be completed in Q3 2024.

On July 31, 2023, at the annual, general and special meeting of the Company, the Company’s shareholders approved the separation of Lithium Americas into Lithium Americas (Argentina) Corp. and a new Lithium Americas Corp. (“Lithium Americas (NewCo)”), pursuant to a statutory plan of arrangement (the “Separation”). The Separation was completed on October 3, 2023, pursuant to a final order dated August 4, 2023, from the Supreme Court of British Columbia approving the plan of arrangement. As a result of the transaction, on October 3, 2023, the Company transferred its North American business, including, among other assets, the Thacker Pass Project (“Thacker Pass”) and $275,499 of cash to Lithium Americas (NewCo), and the Company changed its name to Lithium Americas (Argentina) Corp. (Note 4).

The Company’s common shares are listed on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (“NYSE”) under the symbol “LAAC”. The Company’s head office and principal address is Suite 300, 900 West Hastings Street, Vancouver, British Columbia, Canada, V6C 1E5.

To date, the Company has not generated significant revenues from operations and has relied on equity and other financings to fund operations. The underlying values of exploration and evaluation assets are dependent on the existence of economically recoverable reserves, securing and maintaining title and beneficial interest in the properties, and the ability of the Company to obtain the necessary financing to complete permitting and development, and to attain future profitable operations.

  5

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

2. BASIS OF PREPARATION AND PRESENTATION

These condensed consolidated interim financial statements of the Company (“Interim Financials”) have been prepared in accordance with IFRS Accounting Standards applicable to the preparation of interim financial statements, under International Accounting Standard 34, Interim Financial Reporting. The Interim Financials should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2023 (the “2023 Annual Financials”), which have been prepared in accordance with IFRS Accounting Standards.

The Interim Financials are expressed in United States dollars (“US$”), the Company’s presentation currency. The same accounting policies and methods of computation have been used in the Interim Financials and 2023 Annual Financials other than those disclosed in Note 3.

3. SUMMARY OF MATERIAL ACCOUNTING POLICIES

Estimation Uncertainty and Accounting policy judgments

The preparation of these Interim Financials in conformity with IFRS Accounting Standards applicable to the preparation of interim financial statements requires judgments, estimates, and assumptions that affect the amounts reported. Those estimates and assumptions concerning the future may differ from actual results. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The nature and number of significant estimates and judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty are the same as those that management applied to the 2023 Annual Financials except for certain pronouncements disclosed.

New IFRS Pronouncements

Amendments to IAS 1 – Presentation of Financial Statements

In October 2022, the IASB issued amendments to IAS 1, Presentation of Financial Statements titled Non-current liabilities with covenants. These amendments sought to improve the information that an entity provides when its right to defer settlement of a liability is subject to compliance with covenants within 12 months after the reporting period. These amendments to IAS 1 override but incorporate the previous amendments, Classification of liabilities as current or non-current, issued in January 2020, which clarified that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Liabilities should be classified as non-current if a company has a substantive right to defer settlement for at least 12 months at the end of the reporting period. The Company adopted these amendments effective January 1, 2024, applied them retrospectively as required by the transitional provisions of the amendments and included restated consolidated statements of financial position for the comparative periods ended December 31, 2023, and January 1, 2023.

Amendments to IAS 1 resulted in a reclassification of convertible senior notes (the “Convertible Notes”, “Notes”, or “equity-settleable convertible notes”) from non-current liabilities to current liabilities as at January 1, 2023 and December 31, 2023. The Convertible Notes are convertible at the option of the holders upon satisfaction of certain conditions that are beyond the control of the Company. If such conditions are satisfied, the convertible notes would be convertible at the option of the holders and upon conversion, the Notes may be settled, at the Company’s election, in common shares of the Company, cash or a combination thereof. As a result, the Company does not have the right to defer settlement of the Notes for more than 12 months after the end of the reporting periods (Note 10).

  6

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

3. SUMMARY OF MATERIAL ACCOUNTING POLICIES (continued)

IFRS 18 Presentation and Disclosure in Financial Statements

In April 2024, the IASB issued IFRS 18, Presentation and Disclosure in Financial Statements which will replace IAS 1, Presentation of Financial Statements. IFRS 18 introduces new requirements on presentation within the statement of profit or loss, including specified totals and subtotals. It also requires disclosure of management-defined performance measures and includes new requirements for aggregation and disaggregation of financial information based on the identified ‘roles’ of the primary financial statements and the notes.

In addition, there are consequential amendments to other accounting standards; some requirements previously included in IAS 1 have been moved to IAS 8 and limited amendments have been made to IAS 7 and IAS 34. IFRS 18 is effective for the reporting period beginning on or after January 1, 2027, with early application permitted. Retrospective application is required in both annual and interim financial statements. The Company has not yet applied this standard, and the application of this standard will have an impact on the presentation of the Company’s financial statement.

Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification and Measurement of Financials Instruments

In May 2024, the IASB issued amendments to IFRS 9 and IFRS 7, Amendments to the Classification and Measurement of Financials Instruments. These amendments updated classification and measurement requirements in IFRS 9 Financial Instruments and related disclosure requirements in IFRS 7 Financial Instruments: Disclosures. The IASB clarified the recognition and derecognition date of certain financial assets and liabilities, and amended the requirements related to settling financial liabilities using an electronic payment system. It also clarified how to assess the contractual cash flow characteristics of financial assets in determining whether they meet the solely payments of principal and interest criterion, including financial assets that have environmental, social and corporate governance (ESG)-linked features and other similar contingent features. These amendments require additional disclosure for financial instruments with contingent features that do not relate directly to basic lending risks and costs and amended disclosures relating to equity instruments designated at fair value through other comprehensive income.

The amendments are effective for annual periods beginning on or after January 1, 2026. Early adoption is permitted, with an option to early adopt the amendments for contingent features only. The Company has not yet applied this standard and will assess the effect of these amendments on the Company’s financial statement.

4. DISTRIBUTED OPERATIONS

Upon completion of the Separation on October 3, 2023, the Company transferred its North American business, including, among other assets, its Thacker Pass Project and $275,499 of cash to Lithium Americas (NewCo). Pursuant to the plan of arrangement, each shareholder received one common share of Lithium Argentina and one common share of Lithium Americas (NewCo) in exchange for each common share of the Company previously held. As part of the approval of the Separation, the Company’s shareholders also approved amendments to the equity incentive plan to allow holders of restricted share units, performance share units and deferred share units to receive on Separation one similar instrument in each of Lithium Argentina (subject to adjustment) and Lithium Americas (NewCo). The Company has no further interest in Lithium Americas (NewCo) subsequent to the Separation.

  7

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

4. DISTRIBUTED OPERATIONS (continued)

The distributed operations have been presented and accounted for using IFRS 5, Non-Current Assets Held for Sales and Discontinued Operations, and IFRIC 17, Distribution of Assets to Owners. Under this guidance, a dividend was recognized in deficit measured at the fair value of the net assets distributed with a corresponding dividend payable. The dividend payable was then settled through the distribution of the net assets. The fair value of the net assets distributed was $1,680,501, determined based on the share price of Lithium Americas (Newco) on October 4, 2023. The difference of $1,267,552 between the fair value of the dividend and the carrying value of the net assets was recognized as a gain on distribution of assets within discontinued operations during the year ended December 31, 2023.

The results and cash flows of Lithium Americas (NewCo) presented as discontinued operations are as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2024		2023			2024		2023
	$		$			$		$
EXPENSES
Exploration and evaluation expenditures		-		-			-		(5,626	)
General and administrative		-		(3,744	)		-		(5,358	)
Equity compensation		-		(1,362	)		-		(1,557	)
		-		(5,106	)		-		(12,541	)
OTHER ITEMS
Transaction costs		-		(2,802	)		-		(6,830	)
Gain on financial instruments measured at fair value		-		18,713			-		26,959
Finance income/(costs)		-		37			-		(32	)
Other income		-		43			-		53
		-		15,991			-		20,150
INCOME FROM DISCONTINUED OPERATIONS		-		10,885			-		7,609

	Six Months Ended June 30,
	2024		2023
	$		$
Cash used in operating activities of discontinued operations		-		(24,658	)
Cash used in investing activities of discontinued operations		-		(57,266	)
Cash provided by financing activities of discontinued operations		-		302,871

  8

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

5. CASH AND CASH EQUIVALENTS

Cash and cash equivalents

	June 30, 2024		December 31, 2023
	$		$
Cash		96,196		42,169
Cash equivalents		-		80,124
		96,196		122,293

As at June 30, 2024, $355 of cash and cash equivalents was held in Canadian dollars (December 31, 2023 – $2,438), $95,442 in US dollars (December 31, 2023 – $119,569) and $399 were held in Argentine Pesos (December 31, 2023 – $286). During the six months ended June 30, 2024, cash and cash equivalents generated an interest income of $2,183.

6. INVESTMENT IN SAL DE LA PUNA

On April 20, 2023, the Company completed the acquisition of Arena Minerals that owns 65% of Sal de la Puna through a joint venture interest in Sal de la Puna Holdings Ltd., the 100% owner of Argentine entity, Puna Argentina S.A.U. (“PASA”), the owner of the claims forming part of the Sal del la Puna Project.

The remaining 35% of PASA is owned by joint venture partner Ganfeng New Energy Technology Development (Suzhou) Co., Ltd. Therefore, after the acquisition of Arena Minerals, the Company holds a 65% ownership interest in the Sal de la Puna Project covering approximately 13,200 hectares of the Pastos Grandes Basin.

The Company’s 65% ownership interest in Sal de la Puna is considered to be a joint venture and accounted for using the equity method of accounting. Changes in the investment balance are summarized below:

	$
Investment in Sal de la Puna, as at December 31, 2023		181,270
Share of loss of Sal de la Puna		(303	)
Investment in Sal de la Puna, as at June 30, 2024		180,967

7. INVESTMENT IN CAUCHARI-OLAROZ PROJECT

As at June 30, 2024, the Company, Ganfeng and JEMSE are 44.8%, 46.7% and 8.5% shareholders, respectively, of Minera Exar, the company that holds all rights, title and interest in and to Cauchari-Olaroz, which is located in the Jujuy province of Argentina. The Company and Ganfeng are parties to a shareholders’ agreement concerning management of the project and are entitled to the project’s production offtake on a 49%/51% basis. Construction costs are also shared on the same 49%/51% pro rata basis between the Company and Ganfeng. The shareholders’ agreement regulates key aspects of governance of the project, which provides the Company with significant influence over Minera Exar and strong minority shareholder protective rights. In addition, the Company and Ganfeng are 49% and 51% shareholders, respectively, in Exar Capital, a company that provides financing to Minera Exar for the purpose of advancing construction of Cauchari-Olaroz (the investment in Minera Exar and investment in Exar Capital together, the “Investment in Cauchari-Olaroz project”). Minera Exar and Exar Capital are accounted for using the equity method of accounting.

  9

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

7. INVESTMENT IN CAUCHARI-OLAROZ PROJECT (continued)

Loans to Minera Exar and Exar Capital

The Company has entered into loan agreements with Minera Exar and Exar Capital to fund the construction of Cauchari-Olaroz. Changes in the loans’ balances are summarized below.

	$
Loans to Exar Capital, as at December 31, 2022		223,122
Loans to Exar Capital		64,680
Accrued interest		33,067
Loans to Exar Capital, as at December 31, 2023		320,869
Loans to Exar Capital		41,979
Repayment of loans by Exar Capital		(26,476	)
Accrued interest		21,487
Loans to Exar Capital, as at June 30, 2024		357,859

Loans advanced after January 1, 2022, carry an interest rate of the Secured Overnight Financing Rate (“SOFR”) plus 10.305%. During the six months ended June 30, 2024, $41,979 loans were provided by the Company to Exar Capital to fund Cauchari-Olaroz’s working capital and other funding requirements. The maturity of each of the loans is 7 years from the date of drawdown.

During the six months ended June 30, 2024, Minera Exar repaid or refinanced a portion of the outstanding third party loans that were secured with bank letters of credit arranged by Exar Capital which resulted in release of Exar Capital’s cash collateral. Exar Capital utilized the Company’s share of released cash collateral to repay $26,476 to LAAC as settlement of a portion of loans advanced by LAAC. As at June 30, 2024, loans advanced to Exar Capital by the Company (including accrued interest) of $10,164 are due in 2025, $55,634 are due between 2026 and 2027, $292,061 between 2028 and 2031.

During the six months ended June 30, 2024, Minera Exar obtained debt financing in the form of loans totaling $78,000 from banks and third parties to refinance its debt, fund working capital and other requirements and settled approximately $113,000 (a portion of the outstanding third party loans). The accumulated amount of such loans obtained from third parties as of June 30, 2024, is approximately $314,800 and they include loans totaling:

•

$118,000 which are secured with a $19,600 letter of credit and $30,000 guarantee provided by Ganfeng (the Company has in turn provided a guarantee to Ganfeng in the amount of $34,300 for the loans), $43,600 local bank guarantees arranged by Minera Exar, and a $9,500 bank letter of credit arranged by Exar Capital, with the Company and Ganfeng providing cash that is held by Exar Capital as collateral under the letter of credit. This cash can be used to settle Minera Exar loans;

•

$63,000 which are secured with a $63,000 guarantee provided by Ganfeng. The Company has in turn provided a guarantee to Ganfeng in the amount of $30,900 for the loans; and

•

The remaining third-party loans are unsecured.

As at June 30, 2024, third party loans of approximately $275,600 are due on or before June 30, 2025 and $39,200 are due in the second half of 2025.

  10

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

7. INVESTMENT IN CAUCHARI-OLAROZ PROJECT (continued)

Offtake Agreement with Ganfeng and Bangchak

The Company and Ganfeng are entitled to a share of offtake from production at Cauchari-Olaroz. The Company is entitled to 49% of the offtake, which would amount to approximately 19,600 tonnes per annum (“tpa”) of lithium carbonate assuming full capacity is achieved. The Company has entered into an offtake agreement with each of Ganfeng and Bangchak to sell a fixed amount of offtake production at market-based prices, with Ganfeng entitled to 80% of the first 12,250 tpa of lithium carbonate (9,800 tpa assuming full production capacity) and Bangchak entitled to up to 6,000 tpa of lithium carbonate (assuming full production capacity).

The balance of the Company’s offtake entitlement, amounting to up to approximately 3,800 tpa of lithium carbonate is uncommitted, but for limited residual rights available to Bangchak to the extent production does not meet full capacity.

Prepayment of purchases and sales of lithium carbonate

In Q2 2023, the Company entered into an agreement to receive prepayments from Ganfeng with respect to the Company’s sale of 80% of its 49% share of the future lithium carbonate production from Minera Exar. The agreement provided the Company the right to settle its obligation to Ganfeng through assigning its rights to receive a corresponding value of lithium carbonate from Minera Exar. Concurrently, the Company entered into an agreement to make prepayments to Minera Exar with respect to the Company’s 49% share of the future lithium carbonate production from Minera Exar.

The prepayments to Minera Exar were non-interest bearing (except in the case of default) and were settled as a credit against the purchase of lithium carbonate within 365 days of the prepayment invoice.

As at January 1, 2024, there were $6,673 prepayments that had been made to Minera Exar and $2,322 prepayments received from Ganfeng, which were fully settled in Q1 2024 against the lithium carbonate purchases from Minera Exar and sales to Ganfeng respectively.

Purchases and sales of lithium carbonate

During the six months ended June 30, 2024, the Company purchased 49% of Minera Exar’s lithium carbonate shipped during the period with Ganfeng purchasing the remaining 51% of the product shipped. The Company sold the purchased lithium carbonate to Ganfeng and Bangchak and acted in the capacity of agent in such sales transactions, as the Company’s acquisition of title to lithium carbonate was simultaneous with the sale of lithium carbonate to Ganfeng and Bangchak and the Company was not directly exposed to inventory or price risk related to lithium carbonate.

Since there was no net amount of commission to the Company, there was no impact on the Company’s statement of comprehensive loss for the six months ended June 30, 2024.

As at June 30, 2024, the Company has $14,666 payable to Minera Exar and $12,074 receivable from Ganfeng and Bangchak included in payable to Minera Exar for lithium carbonate purchases and receivables from purchasers of lithium carbonate on the statement of financial position respectively.

  11

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

7. INVESTMENT IN CAUCHARI-OLAROZ PROJECT (continued)

Investment in Cauchari-Olaroz Project

Changes in the Investment in Cauchari-Olaroz Project are summarized below:

	$
Investment in Cauchari-Olaroz Project, as at December 31, 2022		41,507
Contribution to Investment in Cauchari-Olaroz Project		1,863
Share of income of Cauchari-Olaroz Project		53,555
Elimination of the Company’s portion of capitalized intercompany interest		(37,344	)
Investment in Cauchari-Olaroz Project, as at December 31, 2023		59,581
Contribution to Investment in Cauchari-Olaroz Project		858
Share of loss of Cauchari-Olaroz Project		(15,656	)
Elimination of the Company’s portion of capitalized intercompany interest		(10,858	)
Investment in Cauchari-Olaroz Project, as at June 30, 2024		33,925

As of January 1, 2024, the Company’s investment in Minera Exar was $23,456 and Exar Capital was $36,125 and contributions to the investment in Minera Exar during the six months ended June 30, 2024, were $858. Since the Company’s share of Minera Exar loss for the six months ended June 30, 2024, exceeded the carrying value of the investment in Minera Exar, the Company recognized its share of loss equal to the carrying value of the investment in Minera Exar of $24,314. The recognized and unrecognized share of Minera Exar losses were $24,314 and $52,280 respectively for the six months ended June 30, 2024. The Company’s share of Exar Capital loss was $2,200 for the six months ended June 30, 2024.

The following are the amounts presented in the financial statements of Minera Exar on a 100% basis as amended to reflect the Company’s accounting policies.

	June 30, 2024			December 31, 2023
	$			$
Current assets
Cash and cash equivalents		7,602			49
Inventories		265,500			220,507
Other current assets		45,184			12,855
Total current assets		318,286			233,411
Non-current assets		1,449,054			1,327,284
Current liabilities - third-party loans		(275,593	)		(314,109	)
Current liabilities - loans from Exar Capital		(541,552	)		(328,569	)
Current liabilities - other		(103,257	)		(86,802	)
Non-current liabilities - third-party loans		(39,154	)		(36,242	)
Non-current liabilities - loans from Exar Capital		(677,117	)		(544,526	)
Non-current liabilities - other		(5,331	)		(5,696	)
Net assets		125,336			244,751

  12

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

7. INVESTMENT IN CAUCHARI-OLAROZ PROJECT (continued)

	Six months ended June 30,
		2024			2023
	$			$
Sales		73,895			-
Cost of sales (excluding depreciation)		(63,888	)		-
Depreciation		(3,668	)		-
Inventory net realizable value adjustment		5,140			-
		11,479			-
Selling and distribution expenses		(4,494	)		-
Administrative expenses		(4,107	)		-
Derivative foreign exchange and other loss		(149,862	)		(11,949	)
Deferred tax recovery		27,568			2,875
Net loss		(119,416	)		(9,074	)

In Q2 2022, certain of the loans provided by Exar Capital to Minera Exar were amended to introduce a revised repayment mechanism linked to the implied market foreign exchange rate in Argentina. Subsequent to the amendment, the revised repayment feature gives rise to the existence of an embedded derivative in the loans payable by Minera Exar which is required to be measured at fair value at each reporting date. Minera Exar recognized a loss on change in the fair value of the derivative of $95,554 (net of taxes) on a 100% basis for the six months ended June 30, 2024. The loss on change in the fair value of the embedded derivative and the corresponding tax impact is included in derivative foreign exchange and other loss, and deferred tax recovery respectively of Minera Exar’s statement of comprehensive loss for the six months ended June 30, 2024.

Minera Exar’s Commitments and Contingencies

As at June 30, 2024, Minera Exar had the following commitments (on a 100% basis):

•

Annual royalty of $200 due in May of every year and expiring in 2041.

•

Aboriginal programs agreements with seven communities located in the Cauchari-Olaroz project area having terms ranging from five to thirty years. The annual fees due are $291 in 2024 and $503 between 2025 and 2063, assuming that such agreements are extended for the life of the project. The annual fees are subject to change. Minera Exar’s obligations to make the payments are subject to continued development of the project and commencement and continuation of production operations for the project.

•

Commitments related to construction contracts of $454.

  13

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

8. PROPERTY, PLANT AND EQUIPMENT

	Thacker Pass Project			Buildings		Equipment and machinery			Other1			Total
	$			$		$			$			$
Cost
As at December 31, 2022		-			1,674		4,991			6,067			12,732
Transfers from E&E		9,514			-		-			-			9,514
Acquisition of Arena Minerals		-			-		-			55			55
Additions		118,454			3,529		239			1,964			124,186
Disposals		-			-		(98	)		(282	)		(380	)
Assets distributed upon separation		(127,968	)		-		(2,416	)		(4,348	)		(134,732	)
As at December 31, 2023		-			5,203		2,716			3,456			11,375
Additions		-			613		-			212			825
As at June 30, 2024		-			5,816		2,716			3,668			12,200

	Thacker Pass Project		Buildings		Equipment and machinery			Other1			Total
	$		$		$			$			$
Accumulated depreciation
As at December 31, 2022		-		106		1,327			2,273			3,706
Depreciation for the period		-		240		466			1,434			2,140
Disposals		-		-		-			(166	)		(166	)
Assets distributed upon separation		-		-		(1,653	)		(1,897	)		(3,550	)
As at December 31, 2023		-		346		140			1,644			2,130
Depreciation for the period		-		40		15			369			424
As at June 30, 2024		-		386		155			2,013			2,554

	Thacker Pass Project		Buildings		Equipment and machinery		Other1		Total
	$		$		$		$		$
Net book value
As at December 31, 2023		-		4,857		2,576		1,812		9,245
As at June 30, 2024		-		5,430		2,561		1,655		9,646

1 The “Other” category includes right of use assets with a cost of $1,911 and $1,360 of accumulated depreciation as at June 30, 2024.

  14

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

9. EXPLORATION AND EVALUATION ASSETS

Exploration and evaluation assets were as follows:

	Thacker Pass			Millennial Projects			Other Claims			Total
	$			$			$			$
Total exploration and evaluation assets
As at December 31, 2022		9,514			339,131			-			348,645
Transfers to PP&E		(9,514	)		-			-			(9,514	)
Acquisition of Arena Minerals		-			-			1,385			1,385
Additions		-			2,646			770			3,416
Write offs		-			(70	)		-			(70	)
Assets distributed to the shareholders		-			-			(770	)		(770	)
As at December 31, 2023		-			341,707			1,385			343,092
Additions		-			696			-			696
As at June 30, 2024		-			342,403			1,385			343,788

The Company has certain commitments for royalty and other payments to be made for Pastos Grandes as set out below. These amounts will only be payable if the Company continues to hold the subject claims in the future and the royalties will only be incurred if the Company starts production from the project.

Pastos Grandes:

•

1.5% royalty on the gross operating revenues from production from certain Pastos Grandes claims, payable to the original vendors of the project; and

•

royalties to a maximum of 3% over net-back income, payable to the Salta Province.

10. EQUITY-SETTLEABLE CONVERTIBLE NOTES

On December 6, 2021, the Company closed an offering (the “Offering”) of $225,000 aggregate principal amount of 1.75% Convertible Notes due in 2027. The Company used a portion of the net proceeds from the Offering to repay in full its $205,000 senior secured credit facility. On December 9, 2021, the initial purchasers under the Offering exercised in full their option to purchase up to an additional $33,750 aggregate principal amount of the Convertible Notes, increasing the total Offering size to $258,750.

  15

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

10. EQUITY-SETTLEABLE CONVERTIBLE NOTES (continued)

The Convertible Notes represent financial instruments that include a debt host accounted for at amortized cost and conversion option and redemption option derivatives, which are separated from the debt host and accounted for at fair value with changes in fair value recorded in the statement of comprehensive loss. These derivatives are accounted for together as a single derivative when separated from the debt host.

	Debt host			Convertible note derivative			Total
	$			$			$
Convertible notes
As at December 31, 2022		169,127			35,345			204,472
Gain on change in fair value of convertible notes derivative		-			(22,207	)		(22,207	)
Accrued Interest		22,623			-			22,623
Interest payment		(2,452	)		-			(2,452	)
Reclassification of short-term accrued interest to short-term liability		(2,075	)		-			(2,075	)
As at December 31, 2023		187,223			13,138			200,361
Gain on change in fair value of convertible notes derivative		-			(10,826	)		(10,826	)
Accrued Interest		12,172			-			12,172
Interest payment		(189	)		-			(189	)
Reclassification of short-term accrued interest to short-term liability		(2,075	)		-			(2,075	)
As at June 30, 2024		197,131			2,312			199,443

The fair value of the derivative as at June 30, 2024, is estimated using a partial differential equation method with Monte Carlo simulation with the following inputs: volatility of 63.72%, share price of $3.20, a risk-free rate of 4.61%, an expected dividend of 0%, and a credit spread of 9.97%. Valuation of the embedded derivative is highly sensitive to changes in the Company’s share price and to a lesser extent to changes in the risk-free interest rate and the assumed volatility of the Company’s share price. A gain on change in fair value for the six months ended June 30, 2024, of $10,826 was recognized in the statement of comprehensive loss.

The Company paid interest of $2,264 in January 2024 due under its Convertible Notes. Interest expense for the six months ended June 30, 2024 of $12,172 was recognized as finance costs in the statement of comprehensive loss.

Amendments to IAS 1 resulted in a reclassification of equity-settleable convertible notes from non-current liabilities to current liabilities as at January 1, 2023 and December 31, 2023 (Note 3). The Convertible Notes are convertible at the option of the holders upon satisfaction of certain conditions that are beyond the control of the Company. If such conditions are satisfied, the Convertible Notes would be convertible at the option of the holders and upon conversion, the Notes may be settled, at the Company’s election, in common shares of the Company, cash or a combination thereof. As a result, the Company does not have the right to defer settlement of the Convertible Notes for more than 12 months after the end of the reporting periods.

The Convertible Notes are unsecured and accrue interest payable semi-annually in arrears at a rate of 1.75% per annum payable on January 15th and July 15th of each year, beginning on July 15, 2022. Prior to October 15, 2026, the Notes are convertible at the option of the holders during certain periods, upon the satisfaction of certain conditions including:

  16

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

10. EQUITY-SETTLEABLE CONVERTIBLE NOTES (continued)

(i)

If the Notes’ trading price for any five consecutive trading day period was, on each day, less than 98% of the conversion value of such Notes;

(ii)

if the Company elects to (a) issue equity instruments to all holders of the Company’s common shares entitling them, for a period of not more than 45 calendar days after issue, to subscribe for or purchase common shares at a price per share that is less than the average reported sales prices of the common shares for the 10-trading day period ending the trading day before the announcement of such issuance of equity instruments; or (b) make a distribution to all holders of the Company’s common shares, whether such distribution is of assets, securities, or rights to purchase the Company’s securities, and has a per share value exceeding at least 10% of the trading price of the common shares on the date immediately preceding the announcement date of such distribution;

(iii)

upon the occurrence of certain significant business events;

(iv)

if, at any time after the calendar quarter ending on March 31, 2022 (and only during such calendar quarter), the last reported price of the Company’s common shares for at least 20 trading days (whether or not consecutive) during the last period of 30 trading days of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day (this has not occurred for the six months ended June 30, 2024); or,

(v)

upon a call for redemption by the Company, or upon the Company’s failure to pay the redemption price therefor.

Thereafter, the Convertible Notes will be convertible at any time until the close of business on the business day immediately preceding the maturity date. Upon conversion, the Convertible Notes may be settled, at the Company’s election, in common shares of the Company, cash or a combination thereof. The Conversion Rate for the Convertible Notes was adjusted on October 17, 2023, to 52.6019 common shares of the Company per $1,000 principal amount of the Convertible Notes.

The Convertible Notes mature on January 15, 2027, unless earlier repurchased, redeemed or converted. The Company may not redeem the Convertible Notes prior to December 6, 2024, except upon the occurrence of certain changes to the laws governing Canadian withholding taxes. After December 6, 2024, the Company has the right to redeem the Convertible Notes at its option in certain circumstances including:

(i)

on or after December 6, 2024, if the Company’s share price for at least 20 trading days during any 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter is over 130% of the conversion price on each applicable trading day, at a redemption price equal to 100% of the principal plus accrued and unpaid interest; and

(ii)

if the Company becomes obligated to pay additional amounts as a result of its obligation to bear the cost of Canadian or non-Canadian withholding tax, if applicable;

Redemption can result in exercisability of the conversion option. Holders of Convertible Notes have the right to require the Company to repurchase their Convertible Notes upon the occurrence of certain events.

  17

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

11. SHARE CAPITAL AND EQUITY COMPENSATION

Share Capital

On April 20, 2023, the Company closed the acquisition of 100% of Arena Minerals and issued 8,456 shares to Arena Minerals shareholders.

On February 16, 2023, the Company issued 15,002 common shares as part of the closing of the first tranche of General Motor’s investment.

Equity Incentive Plan

The Company has an equity incentive plan (“Plan”) in accordance with the policies of the TSX whereby, from time to time at the discretion of the Board of Directors, eligible directors, officers, employees and consultants are awarded restricted share units (“RSUs”) and performance share units (“PSUs”) that, subject to a recipient’s deferral right in accordance with the Income Tax Act (Canada), convert automatically into common shares upon vesting. In addition, independent directors are awarded deferred share units (“DSUs”), generally as partial compensation for their services as directors. DSUs may be redeemed by directors for common shares upon retirement or termination from the Board. The Plan also permits the grant of incentive stock options exercisable to purchase common shares of the Company (“stock options”). The Plan is a “rolling plan” pursuant to which the aggregate number of common shares to be issued shall not exceed 8% of the outstanding shares from time to time.

Restricted Share Units

During the six months ended June 30, 2024, the Company granted 1,883 RSUs (2023 – 360) to its employees and consultants. The total estimated fair value of the RSUs granted was $7,249 (2023 – $8,722) based on the market value of the Company’s shares on the grant date. As at June 30, 2024, there was $10,404 (2023 – $5,140) of total unamortized compensation cost relating to unvested RSUs. During the six months ended June 30, 2024, equity compensation expense related to RSUs of $695 was charged to expenses (2023 – $1,673).

A summary of changes to the number of outstanding RSUs is as follows:

	Number of RSUs (in 000's)
Balance, RSUs outstanding as at December 31, 2022		2,367
Converted into shares pre-separation		(547	)
Forfeited pre-separation		(12	)
Granted pre-separation		363
Balance, RSUs outstanding prior to separation		2,171
Net adjustment upon separation		(281	)
Converted into shares post-separation		(521	)
Granted post-separation	878
Balance, RSUs outstanding as at December 31, 2023		2,247
Converted into shares		(213	)
Granted		1,883
Forfeited		(89	)
Balance, RSUs outstanding as at June 30, 2024		3,828

  18

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

11. SHARE CAPITAL AND EQUITY COMPENSATION (continued)

Deferred Share Units

During the six months ended June 30, 2024, the Company granted 203 DSUs (2023 – 16) with a total estimated fair value of $780 (2023 – $330).

	Number of DSUs (in 000's)
Balance, DSUs outstanding as at December 31, 2022		252
Granted pre-separation		32
Converted into common shares pre-separation		(59	)
Balance, DSUs outstanding as at September 30, 2023		225
Net adjustment upon separation		(29	)
Converted into shares post-separation		(83	)
Granted post-separation	325
Balance, DSUs outstanding as at December 31, 2023		438
Granted	203
Balance, DSUs outstanding as at June 30, 2024		641

Stock Options

During the six months ended June 30, 2024, the Company granted 1,225 stock options (2023 – Nil) to its officers and employees. The fair value of stock options granted was estimated on the date of grant using the Black Scholes Option Pricing Model with the following assumptions used for the grants:

	December 3, 2023			June 20, 2024
Number of options granted ('000's)		1,740			1,225
Risk-free rate	4.04%-4.27%			4.27%-4.29%
Expected life (in years)	7			5-7
Annualized volatility	73.14%-73.66%				73.66	%
Dividend rate		0	%		0	%
Fair value per stock option granted ($)	$2.22-$3.98			$2.20-$3.52
Total fair value of stock options granted ($)		$5,869			$2,824

None of the stock options were exercisable as at June 30, 2024.

  19

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

11. SHARE CAPITAL AND EQUITY COMPENSATION (continued)

A summary of changes to outstanding stock options is as follows:

	Number of Options (in 000's)			Weighted Average Exercise Price (CDN$)
Balance, stock options outstanding as at December 31, 2022		690			7.54
Exercised pre-separation		(690	)		(7.54	)
Granted post-separation		1,740			-
Balance, stock options outstanding as at December 31, 2023		1,740			-
Granted		1,225
Forfeited		(120	)		-
Balance, stock options outstanding as at June 30, 2024		2,845			-

During the six months ended June 30, 2024, no stock options (2023 – 670) were exercised under the cashless exercise provision of the Plan, resulting in no issuance of shares (2023 – 525) of the Company. The weighted average share price at the time of exercise of stock options during the six months ended June 30, 2023, was CDN$32.26.

As at June 30, 2024, there was $6,571 (2023 – $Nil) of total unamortized compensation cost relating to unvested stock options. During the six months ended June 30, 2024, stock-based compensation expense related to stock options of $1,356 (2023 – $Nil) was charged to operating expenses on the statement of comprehensive loss.

Performance Share Units

During the six months ended June 30, 2024, the Company did not grant any PSUs (2023 – 204). As at June 30, 2024, there was $719 (2023 – $8,285) of total unamortized compensation cost relating to unvested PSUs.

During the six months ended June 30, 2024, equity compensation expense related to PSUs of $246 was charged to operating expenses (2023 – $1,754). A summary of changes to the number of outstanding PSUs is as follows:

	Number of PSUs (in 000's)
Balance, PSUs outstanding as at December 31, 2022		766
Granted pre-separation		204
Converted into common shares pre-separation		(215	)
Forfeited pre-separation		(6	)
Balance, PSUs outstanding as at September 30, 2023		749
Net adjustment upon separation		153
Converted into shares post-separation		(28	)
Balance, PSUs outstanding as at December 31, 2023		874
Converted into shares		(337	)
Balance, PSUs outstanding as at June 30, 2024		537

  20

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

12. RELATED PARTY TRANSACTIONS

Minera Exar, the Company’s equity-accounted investee, has entered into the following transactions with companies controlled by the family of its President, who is also a director of Lithium Argentina:

•

Option Agreement with Grupo Minero Los Boros S.A. on March 28, 2016, for the transfer to Minera Exar of title to certain mining properties that comprised a portion of the Cauchari-Olaroz project.

•

Expenditures under the construction services contract for the Cauchari-Olaroz project with Magna Construcciones S.R.L. (“Magna”) were $200 for the six months ended June 30, 2024.

•

Service agreement with a consortium owned 49% by Magna. The agreement entered into Q1 2022, is for servicing of the evaporation ponds at Cauchari-Olaroz over a five-year term, for total consideration of $68,000 (excluding VAT).

During the six months ended June 30, 2024, director’s fees paid by Minera Exar to its President, who is also a director of the Company, totaled $37 (2023 – $38). Refer note 7 for other transactions entered into between the Company and the Company’s equity investees.

The amounts due by Minera Exar to related parties arising from such transactions are unsecured, non-interest bearing and have no specific terms of payment.

In March 2023, an agreement was entered into with the Company’s former VP, Corporate Development to provide corporate development services effective as of August 1, 2023, with an aggregate value over three years of $3,200.

Upon the retirement of the Company’s former Chief Financial Officer in April 2023, an agreement was entered into on April 20, 2023, providing for a payment of $315 for delaying his retirement, a payment under the terms of his contract of approximately $24 and a grant of restricted share units with a value of approximately $664 to be made by the Company. The parties further agreed to enter into a Consulting Agreement, which was entered into effective April 24, 2023, for the provision of advisory services for a one-year term, which was extended subsequent to March 31, 2024, on a month by month basis. The aggregate value of the consulting agreement over its original term is $180.

Compensation of Key Management

Key management are the Company’s board of directors, and the executive management team. The remuneration of directors and members of the executive management team and amounts due as of June 30, 2024, were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
		2024		2023		2024		2023
	$		$		$		$
Equity compensation		1,831		2,051		3,192		2,726
Salaries, bonuses, benefits and directors' fees included in general & administrative expenses		508		1,193		968		2,022
Salaries, bonuses and benefits included in exploration expenditures		57		50		113		136
Salaries and benefits capitalized to Investment in Cauchari-Olaroz project		188		189		329		329
		2,584		3,483		4,602		5,213

  21

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

12. RELATED PARTY TRANSACTIONS (continued)

	June 30, 2024		December 31, 2023
	$		$
Total due to directors		484		66

13. GENERAL AND ADMINISTRATIVE EXPENSES

The following table summarizes the Company’s general and administrative expenses:

	Three Months Ended June 30,				Six Months Ended June 30,
		2024		2023		2024		2023
	$		$		$		$
Salaries, benefits and directors' fees		925		1,715		2,413		3,352
Office and administration		792		499		1,414		1,718
Professional fees		597		74		2,079		1,105
Regulatory and filing fees		125		70		173		158
Travel		67		262		230		397
Investor relations		391		340		461		459
Depreciation		138		98		315		213
		3,035		3,058		7,085		7,402

14. EXPLORATION AND EVALUATION EXPENDITURES

The following table summarizes the Company’s exploration and evaluation expenditures:

	Three Months Ended June 30,
	2024							2023
	Millennial Projects		Other			Total		Millennial Projects		Other		Total
	$				$	$			$		$		$
Consulting and salaries		1,025		416			1,441		1,765		408		2,173
Permitting and environmental		105		-			105		-		-		-
Field supplies and other		876		-			876		2,397		92		2,489
Depreciation		58		-			58		139		-		139
Drilling and geological expenses		276		-			276		1,423		-		1,423
Total exploration expenditures		2,340		416			2,756		5,724		500		6,224

  22

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

14. EXPLORATION AND EVALUATION EXPENDITURES (continued)

	Six Months Ended June 30,
	2024						2023
	Millennial Projects		Other		Total		Millennial Projects		Other		Total
	$		$		$			$		$	$
Consulting and salaries		1,797		905		2,702		2,367		615		2,982
Permitting and environmental		186		-		186		-		-		-
Field supplies and other		2,014		-		2,014		3,468		92		3,560
Depreciation		117		-		117		197		-		197
Drilling and geological expenses		822		-		822		1,460		-		1,460
Total exploration expenditures		4,936		905		5,841		7,492		707		8,199

15. FINANCE COSTS

The following table summarizes the Company’s finance costs:

	Three Months Ended June 30,				Six Months Ended June 30,
		2024		2023		2024		2023
	$		$		$		$
Interest on convertible notes		6,176		5,576		12,172		10,933
Other		13		46		32		56
		6,189		5,622		12,204		10,989

16. FINANCE AND OTHER INCOME

The following table summarizes the Company’s finance and other income:

	Three Months Ended June 30,				Six Months Ended June 30,
		2024		2023		2024		2023
	$		$		$		$
Interest on loans to Exar Capital		11,269		8,093		21,487		14,902
Interest on cash and cash equivalents and deposits		996		7,510		2,183		11,409
Other		184		134		998		268
		12,449		15,737		24,668		26,579

17. SEGMENTED INFORMATION

As of June 30, 2024, Cauchari-Olaroz is in the commissioning stage while the projects under the Pastos Grandes Basin segment are in the exploration and evaluation stage. Assets and liabilities of the North American segment were distributed to the shareholders upon the Separation on October 3, 2023, and its operations were classified as a discontinued operation (Note 4).

  23

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

17. SEGMENTED INFORMATION (continued)

The Company’s reportable segments and corporate assets are summarized in the following tables:

	Cauchari- Olaroz $			Pastos Grandes Basin $			Corporate $			Total $
As at June 30, 2024
Property, plant and equipment		-			8,875			771			9,646
Exploration and evaluation assets		-			343,773			15			343,788
Total assets		399,358			535,713			111,023			1,046,094
Total liabilities		-			(1,657	)		(220,482	)		(222,139	)
For the six months ended June 30, 2024
Property, plant and equipment additions		-			618			207			825
(Loss)/income		(26,514	)		5,036			13,469			(8,009	)
Exploration expenditures		-			(5,690	)		(151	)		(5,841	)
For the three months ended June 30, 2024
Property, plant and equipment additions		-			46			-			46
(Loss)/income		(14,527	)		8,386			8,316			2,175
Exploration expenditures		-			(2,676	)		(80	)		(2,756	)

	Thacker Pass $			Cauchari- Olaroz $			Pastos Grandes Basin $			Corporate $			Total $
As at December 31, 2023
Property, plant and equipment		-			-			8,372			873			9,245
Exploration and evaluation assets		-			-			343,078			14			343,092
Total assets		-			387,844			536,364			130,818			1,055,026
Total liabilities		-			-			(1,858	)		(224,237	)		(226,095	)
For the six months ended June 30, 2023
Property, plant and equipment additions		-			-			2,868			661			3,529
(Loss)/income from discontinued operations		(6,498	)		-			-			14,107			7,609
Income/(loss) from continuing operations		-			(3,382	)		(4,206	)		19,389			11,801
Exploration expenditures		-			-			(7,815	)		(384	)		(8,199	)
For the three months ended June 30, 2023
Property, plant and equipment additions		-			-			1,200			21			1,221
(Loss)/income from discontinued operations		(719	)		-			-			11,604			10,885
Income/(loss) from continuing operations		-			(8,123	)		(3,534	)		26,581			14,924
Exploration expenditures		-			-			(6,048	)		(176	)		(6,224	)

The Company’s non-current assets are segmented geographically as follows:

	Canada $		Argentina $		Total $
Non-current assets (1)
As at June 30, 2024		407		386,952		387,359
As at December 31, 2023		571		411,347		411,918

1 Non-current assets attributed to geographical locations exclude financial and other assets.

  24

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

18. INCOME TAXES

	June 30, 2024		December 31, 2023
	$		$
Deferred tax liability		-		10,659
		-		10,659

	Three Months Ended June 30,				Six Months Ended June 30,
		2024		2023		2024		2023
	$		$		$		$
Deferred tax recovery		10,751		-		10,659		-

The Company recognized a deferred tax recovery of $10,659 during the six months ended June 30, 2024, due to inflation adjustments on the tax basis of Pastos Grandes assets in Argentina partially offset by the weakening of the Argentine Peso against the US dollar on the tax basis of Pastos Grandes assets.

19. FINANCIAL INSTRUMENTS

Financial instruments recorded at fair value on the consolidated statements of financial position and presented in fair value disclosures are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for assets or liabilities, either directly or indirectly; and

Level 3 – Inputs for assets and liabilities that are not based on observable market data.

The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified at the lowest level of the hierarchy for which a significant input has been considered in measuring fair value.

The Convertible Notes derivatives (Note 10) are classified at level 2 of the fair value hierarchy and are measured at fair value on the statement of financial position on a recurring basis. Cash and cash equivalents, receivables, and the debt host of the Convertible Notes are measured at amortized cost on the statement of financial position. As at June 30, 2024, the fair value of financial instruments measured at amortized cost approximates their carrying value.

The Company manages risks to minimize potential losses. The main objective of the Company’s risk management process is to ensure that the risks are properly identified and monitored, and that the capital base maintained by the Company is adequate in relation to those risks. The principal risks which impact the Company’s financial instruments are described below.

Credit Risk

Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, receivables, long-term receivable from JEMSE, and loans to Exar Capital.

  25

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

19. FINANCIAL INSTRUMENTS (continued)

The Company’s maximum exposure to credit risk for cash, cash equivalents, receivables, long-term receivable from JEMSE, and loans to Exar Capital is the amount disclosed in the consolidated statements of financial position. The Company limits its exposure to credit loss by placing the majority of its cash and cash equivalents with two major financial institutions, US and Canadian treasury bills and investing in only short-term obligations that are guaranteed by the Canadian government or by Canadian and US chartered banks with expected credit losses on cash and cash equivalents estimated to be de minimis.

The Company and its subsidiaries and investees including Minera Exar, may from time to time make short-term investments into Argentine government securities, financial instruments guaranteed by Argentine banks and other Argentine securities. These investments may or may not realize short-term gains or losses.

The Central Bank of Argentina maintains certain currency controls that limit the Company's ability to remit cash to and from Argentina. Blue chip swaps are trade transactions that effectively allow companies to transfer US dollars into and out of Argentina. The Company used this mechanism to transfer funds to Argentina which resulted in foreign exchange gain as a result of the divergence between the Blue Chip Swap market exchange rate and the official Argentinian Central Bank rate.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to evaluate current and expected liquidity requirements under both normal and stressed conditions to estimate and maintain sufficient reserves of cash and cash equivalents to meet its liquidity requirements in the short and long-term.

As the industry in which the Company operates is very capital intensive, the majority of the Company’s spending or that of its investees is related to capital programs. The Company prepares annual budgets, which are regularly monitored and updated as considered necessary.

As at June 30, 2024, the Company has $75,000 available under its undrawn limited recourse loan facility with Ganfeng. As at June 30, 2024, the Company had a cash and cash equivalents balance of $96,196 and receivables from purchasers for lithium carbonate of $12,074 to settle current liabilities of $22,329 (excluding equity-settleable convertible notes).

The following table summarizes the contractual maturities of the Company’s financial liabilities on an undiscounted basis:

	Years ending December 31,
	2024		2025		2026 and later		Total
	$		$		$		$
Convertible senior notes		2,264		4,528		265,542		272,334
Accounts payable and accrued liabilities		19,721		-		-		19,721
Obligations under office leases¹		331		385		250		966
Total		22,316		4,913		265,792		293,021

¹Include principal and interest/finance charges.

The Convertible Notes are classified as current liabilities as at June 30, 2024, since the Notes are convertible at the option of the holders upon satisfaction of certain conditions that are beyond the control of the Company. If such conditions are satisfied, the Notes would be convertible at the option of the holders and upon conversion, the Notes may be settled, at the Company’s election, in common shares of the Company, cash or a combination thereof (Note 10).

  26

LITHIUM AMERICAS (ARGENTINA) CORP. (FORMERLY LITHIUM AMERICAS CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

19. FINANCIAL INSTRUMENTS (continued)

The above table summarizes the contractual maturities as at June 30, 2024, with respect to the Convertible Notes assuming such conditions will not be satisfied before the due date.

Market Risk

Market risk incorporates a range of risks. Movement in risk factors, such as market price risk, the Company’s share price, and currency risk, affects the fair values of financial assets and liabilities. The Company is exposed to foreign currency risk as described below.

Foreign Currency Risk

The Company’s operations in foreign countries are subject to currency fluctuations and such fluctuations may affect the Company’s financial results. The Company and its subsidiaries and associates have a US dollar functional currency, and it incurs expenditures in Canadian dollars (“CDN$”), Argentine Pesos (“ARS$”) and US$, with the majority of the expenditures being incurred in US$ by the Company’s subsidiaries and investees.

As at June 30, 2024, the Company held $355 in CDN$ and $399 in ARS$ denominated cash and cash equivalents. Strengthening/(weakening) of a US$ exchange rate versus CDN$ and ARS$ by 10% would have resulted in a foreign exchange (loss)/gain for the Company of $36 and $40 respectively as at June 30, 2024.

20. SUBSEQUENT EVENTS

a)

In July 2024, the Company paid interest of $2,264 due under its Convertible Notes.

b)

Subsequent to June 30, 2024, the Company received a $30,000 advance payment from Ganfeng towards the closing of the Pastos Grandes Transaction.

  27