|
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| Exhibit 99.2 |
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| (Formerly 1397468 B.C. Ltd.) |
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| Condensed Consolidated Interim Financial Statements | ||
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| For the six months ended June 30, 2024 | ||
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LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
|
|
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|
| June 30, |
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| December 31, |
| |||
| Note |
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| 2024 |
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| 2023 |
| ||||
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|
| $ |
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| $ |
| ||||
CURRENT ASSETS |
|
|
|
|
|
|
|
|
| |||
Cash and cash equivalents |
|
| 4 |
|
|
| 375,830 |
|
|
| 195,516 |
|
Receivables, prepaids and deposits |
|
| 5 |
|
|
| 8,735 |
|
|
| 10,367 |
|
|
|
|
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| 384,565 |
|
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| 205,883 |
| ||
NON-CURRENT ASSETS |
|
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|
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|
|
| |||
Investment in Green Technology Metals |
|
| 6 |
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| 683 |
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| 2,580 |
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Investment in Ascend Elements |
|
| 7 |
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| 6,007 |
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| 8,582 |
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Restricted cash |
|
|
|
|
| 288 |
|
|
| 288 |
| |
Property, plant and equipment |
|
| 8 |
|
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| 296,615 |
|
|
| 206,082 |
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Other assets |
| 8 |
|
|
| 3,298 |
|
|
| 15,315 |
| |
Exploration and evaluation assets |
|
| 9 |
|
|
| 780 |
|
|
| 770 |
|
|
|
|
|
| 307,671 |
|
|
| 233,617 |
| ||
TOTAL ASSETS |
|
|
|
|
| 692,236 |
|
|
| 439,500 |
| |
|
|
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|
|
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| |||
Accounts payable and accrued liabilities |
|
|
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| 17,506 |
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| 23,361 |
| |
Current portion of leases |
| 11 |
|
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| 1,224 |
|
|
| 854 |
| |
GM transaction derivative liability |
|
| 10 |
|
|
| 360 |
|
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| 348 |
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|
|
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| 19,090 |
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| 24,563 |
| ||
LONG-TERM LIABILITIES |
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|
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|
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|
|
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| |||
Leases and other liabilities |
|
| 11 |
|
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| 6,878 |
|
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| 6,613 |
|
Decommissioning provision |
|
|
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| 1,688 |
|
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| 862 |
| |
|
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| 8,566 |
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| 7,475 |
| ||
TOTAL LIABILITIES |
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|
|
|
| 27,656 |
|
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| 32,038 |
| |
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SHAREHOLDERS’ EQUITY |
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| |||
Share capital |
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| 1 |
|
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| 925,453 |
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| 656,802 |
|
Contributed surplus and net former parent investment |
|
|
|
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| 15,772 |
|
|
| 15,020 |
| |
Deficit |
|
|
|
|
| (276,645 | ) |
|
| (264,360 | ) | |
TOTAL SHAREHOLDERS’ EQUITY |
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|
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| 664,580 |
|
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| 407,462 |
| |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
| 692,236 |
|
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| 439,500 |
|
Subsequent event (Note 22)
Approved for issuance on August 14, 2024
On behalf of the Board of Directors:
“Fabiana Chubbs” | “Kelvin Dushnisky” |
Director | Director |
2
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
|
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| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| |||||||||||
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| Note |
| 2024 |
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| 2023 |
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| 2024 |
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| 2023 |
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Exploration and evaluation expenditures |
| 16 |
| - |
|
| - |
|
| - |
|
|
| (3,764 | ) | |||
General and administrative expenses |
| 15 |
|
| (4,780 | ) |
|
| (3,743 | ) |
|
| (9,094 | ) |
|
| (5,358 | ) |
Equity compensation |
| 12 |
|
| (1,361 | ) |
|
| (1,362 | ) |
|
| (2,595 | ) |
|
| (1,557 | ) |
|
|
|
| (6,141 | ) |
|
| (5,105 | ) |
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| (11,689 | ) |
|
| (10,679 | ) | |
OTHER ITEMS |
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|
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Transaction costs |
| 17 |
|
| (1,316 | ) |
|
| (2,802 | ) |
|
| (2,181 | ) |
|
| (6,830 | ) |
Gain/(loss) on financial instruments measured at fair value |
| 6,7,10 |
|
| (2,979 | ) |
|
| 18,713 |
|
|
| (4,484 | ) |
|
| 26,959 |
|
Finance (costs)/income |
|
|
|
| (7 | ) |
|
| 34 |
|
|
| (7 | ) |
|
| (335 | ) |
Finance and other income |
| 18 |
|
| 4,167 |
|
|
| 44 |
|
|
| 6,076 |
|
|
| 52 |
|
|
|
|
| (135 | ) |
|
| 15,989 |
|
|
| (596 | ) |
|
| 19,846 |
| |
NET INCOME/(LOSS) |
|
|
|
| (6,276 | ) |
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| 10,884 |
|
|
| (12,285 | ) |
|
| 9,167 |
|
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|
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TOTAL COMPREHENSIVE INCOME/(LOSS) |
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|
|
| (6,276 | ) |
|
| 10,884 |
|
|
| (12,285 | ) |
|
| 9,167 |
|
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BASIC AND DILUTED EARNINGS/(LOSS) PER SHARE |
| 13 |
| $ | (0.03 | ) |
| $ | 0.07 |
|
| $ | (0.07 | ) |
| $ | 0.06 |
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED |
|
|
|
| 204,465 |
|
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| 160,048 |
|
|
| 183,137 |
|
|
| 160,048 |
|
3
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EQUITY
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| ||||||||
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| Share capital |
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| Contributed surplus |
|
| Deficit |
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| Total Shareholders' equity |
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| # of shares |
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| Amount |
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|
|
|
|
|
|
|
|
| |||||
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
Balance, December 31, 2022 |
| - |
|
| - |
|
|
| 226,009 |
|
|
| (260,426 | ) |
|
| (34,417 | ) | ||
Net former parent investment |
| - |
|
| - |
|
|
| 312,814 |
|
| - |
|
|
| 312,814 |
| |||
Net income |
| - |
|
| - |
|
| - |
|
|
| 9,167 |
|
|
| 9,167 |
| |||
Balance, June 30, 2023 |
| - |
|
| - |
|
|
| 538,823 |
|
|
| (251,259 | ) |
|
| 287,564 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Balance, December 31, 2023 |
|
| 161,778 |
|
|
| 656,802 |
|
|
| 15,020 |
|
|
| (264,360 | ) |
|
| 407,462 |
|
Shares issued on conversion of share-based awards (Note 12) |
|
| 1,137 |
|
|
| 6,505 |
|
|
| (6,505 | ) |
| - |
|
| - |
| ||
Shares issued from public offering (Note 12) |
|
| 55,000 |
|
|
| 275,000 |
|
| - |
|
| - |
|
|
| 275,000 |
| ||
Share issuance cost related to public offering |
| - |
|
|
| (12,854 | ) |
| - |
|
| - |
|
|
| (12,854 | ) | |||
Equity compensation amortization |
| - |
|
| - |
|
|
| 7,257 |
|
| - |
|
|
| 7,257 |
| |||
Net loss |
| - |
|
| - |
|
| - |
|
|
| (12,285 | ) |
|
| (12,285 | ) | |||
Balance, June 30, 2024 |
|
| 217,915 |
|
|
| 925,453 |
|
|
| 15,772 |
|
|
| (276,645 | ) |
|
| 664,580 |
|
4
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
|
|
|
|
| Six Months Ended June 30, |
| ||||||
|
|
|
|
| 2024 |
|
| 2023 |
| |||
| Note |
|
| $ |
|
| $ |
| ||||
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
| |||
Net income/(loss) |
|
|
|
|
| (12,285 | ) |
|
| 9,167 |
| |
|
|
|
|
|
|
|
|
|
| |||
Items not affecting cash and other items: |
|
|
|
|
|
|
|
|
| |||
Equity compensation |
|
| 12 |
|
|
| 2,595 |
|
|
| 97 |
|
Depreciation |
|
|
|
|
| 87 |
|
|
| 196 |
| |
Loss/(gain) on financial instruments measured at fair value |
| 6,7,10 |
|
|
| 4,484 |
|
|
| (26,959 | ) | |
Other items |
|
|
|
| - |
|
|
| 551 |
| ||
|
|
|
|
|
|
|
|
|
| |||
Changes in working capital items: |
|
|
|
|
|
|
|
|
| |||
Increase in receivables, prepaids and deposits |
|
|
|
|
| 2,302 |
|
|
| 2,064 |
| |
Decrease in accounts payable, accrued liabilities and other liabilities |
|
|
|
|
| (1,301 | ) |
|
| (12,336 | ) | |
Net cash used in operating activities |
|
|
|
|
| (4,118 | ) |
|
| (27,220 | ) | |
|
|
|
|
|
|
|
|
|
| |||
Additions to property, plant and equipment |
|
|
|
|
| (77,284 | ) |
|
| (56,296 | ) | |
Additions to exploration and evaluation assets |
|
|
|
|
| (10 | ) |
|
| (170 | ) | |
Net cash used in investing activities |
|
|
|
|
| (77,294 | ) |
|
| (56,466 | ) | |
|
|
|
|
|
|
|
|
|
| |||
Proceeds from public offering |
|
| 12 |
|
|
| 275,000 |
|
| - |
| |
Share issuance costs related to public offering |
|
|
|
|
| (12,809 | ) |
| - |
| ||
Net former parent investment - capital contributions |
|
|
|
| - |
|
|
| 40,285 |
| ||
Gross proceeds from GM transaction |
|
| 10 |
|
| - |
|
|
| 320,148 |
| |
Payment of expenses related to the GM transaction |
|
|
|
| - |
|
|
| (15,206 | ) | ||
Lease payments |
|
|
|
|
| (465 | ) |
|
| (357 | ) | |
Net cash provided by financing activities |
|
|
|
|
| 261,726 |
|
|
| 344,870 |
| |
|
|
|
|
|
|
|
|
|
| |||
CHANGE IN CASH AND CASH EQUIVALENTS |
|
|
|
|
| 180,314 |
|
|
| 261,184 |
| |
|
|
|
|
|
|
|
|
|
| |||
CASH AND CASH EQUIVALENTS - BEGINNING OF THE PERIOD |
|
|
|
|
| 195,516 |
|
|
| 636 |
| |
CASH AND CASH EQUIVALENTS - END OF THE PERIOD |
|
|
|
|
| 375,830 |
|
|
| 261,820 |
|
Supplemental cash flow information (Note 20)
5
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
1397468 B.C. Ltd. was incorporated under the Business Corporations Act (British Columbia) on January 23, 2023 for the sole purpose of acquiring ownership of the North American business assets and investments of an entity then named Lithium Americas Corp. (“Old LAC”) and, which is now named Lithium Americas (Argentina) Corp (“Lithium Argentina”), pursuant to a separation transaction (the “Separation”) as described in Note 2. The assets, liabilities and activities of Old LAC's North American business prior to the Separation are referred to as LAC North America. Upon consummation of the Separation on October 3, 2023, 1397468 B.C. Ltd. was re-named Lithium Americas Corp. (“New LAC” or the “Company”) and its common shares were listed on the Toronto Stock Exchange (“TSX”) and on the New York Stock Exchange (“NYSE”) under the symbol “LAC.”
The Separation was completed pursuant to a statutory plan of arrangement (the “Arrangement”). Under the terms of the Arrangement, Old LAC contributed to New LAC the assets of LAC North America, including Thacker Pass, investments in shares of certain companies, its receivable of $43.6 million plus accrued interest to October 3, 2023 and cash of $275.5 million (which included the remaining unspent proceeds of the Tranche 1 Investment and $75 million to establish sufficient working capital). Each shareholder of Old LAC was granted one common share in Lithium Argentina and one common share of New LAC in exchange for each Old LAC share, resulting in two independent publicly traded companies. The Separation was pro rata to the shareholders of Old LAC, so that the holders maintained the same proportionate interest in Old LAC (and, upon the Separation, Lithium Argentina) and New LAC both immediately before and after the Separation.
As the Separation was completed before the closing of the Tranche 2 Investment, the Tranche 2 agreement between GM and Old LAC was terminated on October 3, 2023 and replaced by a corresponding subscription agreement between GM and New LAC (the “Tranche 2 Investment Agreement”) (see Note 10) such that the proceeds will be received by the Company.
As part of the Separation, an investors rights agreement and an agreement to supply GM with lithium carbonate production from Thacker Pass (the “Offtake Agreement”) were assigned by Old LAC to the Company.
These condensed consolidated interim financial statements present the financial position, results of operations, changes in shareholders' equity and cash flows of the Company as if it had operated on a stand-alone basis. Namely, the comparative results of LAC North America as at and for the period ended June 30, 2023, were prepared on a carve-out basis. The operating results for the current period ended June 30, 2024 represent actual financial results for the period. The financial position of the Company as at December 31, 2023 was derived from the assets and liabilities assumed as part of the Separation on a continuity of interests basis and reflects the actual activities of the Company from October 3, 2023 to December 31, 2023.
The Company is focused on advancing the Thacker Pass project (“Thacker Pass”), a sedimentary-based lithium project located in the McDermitt Caldera in Humboldt County in north-western Nevada, USA. Thacker Pass is 100%-owned by Lithium Nevada Corp., which is wholly owned by 1339840 B.C. Ltd., a wholly-owned subsidiary of the Company. The head office and principal address of the Company is Suite 3260, 666 Burrard Street, Vancouver, British Columbia, Canada, V6C 2X8.
6
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
On January 30, 2023, LAC North America entered into a purchase agreement with General Motors Holdings LLC (“GM”) pursuant to which GM agreed to make a $650 million investment (the “Transaction”), the proceeds of which are to be used for the construction and development of Thacker Pass. The Transaction is comprised of two tranches, with the $320.1 million first tranche investment (the “Tranche 1 Investment”) and a second tranche investment of up to $329.9 million (the “Tranche 2 Investment”). The Tranche 1 Investment was completed on February 16, 2023 resulting in GM owning 15,002 common shares of Old LAC which became an equivalent number of shares of the Company post - Separation.
On March 12, 2024, the Company received a conditional commitment (“Conditional Commitment”) from the U.S. Department of Energy (“DOE”) for a $2.26 billion loan under the Advanced Technology Vehicles Manufacturing (“ATVM”) Loan Program (the “DOE Loan”), for financing the construction of the processing facilities at Thacker Pass. While this Conditional Commitment represents a significant milestone and demonstrates the DOE’s intent to finance Thacker Pass, certain technical, legal and financial conditions, including negotiation of definitive financing documents, must be satisfied before funding of the DOE Loan. There can be no assurances as to the terms and conditions of the definitive financing documents or whether the financing will be finalized.
To date, the Company has not generated significant revenues from operations and has relied on equity financing to fund operations. The underlying values of exploration and evaluation assets, property, plant and equipment and the investment in Thacker Pass 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 development, and to attain future profitable operations.
These condensed consolidated interim financial statements of the Company (“Interim Financials”) have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS”) applicable to the preparation of interim financial statements, including International Accounting Standards (“IAS”) 34, Interim Financial Reporting. The Interim Financials should be read in conjunction with the Company’s last annual consolidated financial statements as at and for the year ended December 31, 2023 (the “2023 Annual Financials”), which have been prepared in accordance with IFRS.
Prior to October 3, 2023, LAC North America did not operate as a separate legal entity. The assets, liabilities, results of operations and cash flows prior to October 3, 2023 were those specifically identifiable to LAC North America including assets, liabilities and expenses relating to Thacker Pass, specified investments, transactions and balances arising from the GM investment, as well as an allocation of certain costs relating to the management of those relevant assets, liabilities and results of operations. Such costs were allocated from the shared corporate expenses of Old LAC based on the estimated level of involvement of Old LAC management and employees with LAC North America.
During the comparative period ended June 30, 2023, Old LAC costs were allocated to LAC North America for corporate administrative expenses and employment costs of Old LAC employees primarily relating to Old LAC employees who provided services including accounting and finance, legal, information technology, human resources, marketing, investor relations, contract support, treasury, administrative and other corporate head office services.
7
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
The expenses and cost allocations have been determined on a basis considered by Old LAC to be a reasonable reflection of the utilization of services provided to or the benefit received by LAC North America during the comparative period ended June 30, 2023 presented relative to the total costs incurred by Old LAC.
The Interim Financials are expressed in US dollars (“USD”), the Company’s presentation and functional currency. The accounting policies are the same as those applied in the Company’s 2023 Annual Financials.
Principles of Consolidation
These condensed consolidated interim financial statements include the accounts of the Company and its corporate group of companies, consisting of (i) wholly-owned US subsidiaries Lithium Nevada and KV Project LLC; and (ii) Canadian wholly-owned subsidiary 1339480 B.C. Ltd. All intercompany transactions and balances have been eliminated.
Estimation Uncertainty and Significant Accounting Policy Judgments
The preparation of these Interim Financials in conformity with IFRS applicable to the preparation of interim financial statements requires management to make assumptions, estimates, and judgments that affect the amounts reported in these interim financial statements and accompanying notes. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate was made. Accordingly, actual results may differ from amounts estimated in these condensed consolidated interim financial statements and such differences could be material.
Significant judgments made by management in applying the Company’s accounting policies and key resources of estimation uncertainty were substantially the same as those applied in the 2023 Annual Financials of the Company as well as additional items as follows:
Fair Value Remeasurement of Investment in Ascend Elements
The Company applied judgment in estimating the fair value of its investment in Ascend Elements. As Ascend Elements is a private company, there is no observable market data to use, so the Company carried out an assessment based on publicly-available information on the business activities of Ascend Elements and the market trends impacting its peer companies trading publicly in the lithium battery recycling market.
Assessment of Impairment of Thacker Pass
Management conducts an impairment assessment of Thacker Pass if an impairment indicator as defined in accordance with International Accounting Standard 36 Impairment of Assets (“IAS 36”) is identified. Following the identification of the existence of the impairment indicator at June 30, 2024, associated with a decrease in the Company’s market capitalization, management conducted an evaluation of the recoverable amount of Thacker Pass and compared that amount against carrying value (Note 8). No impairment was identified.
8
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
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 amendments are effective January 1, 2024, with early adoption permitted. Retrospective application is required on adoption. These amendments do not impact the Interim Financials.
IFRS 18 – Presentation and Disclosures in Financial Statements
In April 2024, the IASB issued IFRS 18, Presentation and Disclosure of Financial Statements, which replaces IAS 1, Presentation of Financial Statements. IFRS 18 introduces new requirements for all companies to present specific categories and defined subtotals in the statement of profit and loss, disclose explanations of management defined performance measure if used in the financial statements, and improve aggregation and disaggregation.
The standard is effective for periods beginning on or after January 1, 2027. Retrospective application is required and early adoption is permitted. The Company is currently evaluating the impact of this new standard on the Company's financial statements.
| June 30, |
|
| December 31, |
| |||
|
| $ |
|
| $ |
| ||
Cash |
|
| 42,734 |
|
|
| 12,050 |
|
Cash equivalents |
|
| 333,096 |
|
|
| 183,466 |
|
|
| 375,830 |
|
|
| 195,516 |
|
As at June 30, 2024, $0.6 million of cash and cash equivalents were held in Canadian dollars (December 31, 2023 - $8.5 million), and $375.2 million in US dollars (December 31, 2023 - $187.0 million). Cash equivalents include investments in US treasury bills, short-term savings and deposit accounts with two Canadian Schedule I chartered banks that mature within 90 days of the date of acquisition and earn interest between 5.0 - 5.2% per annum.
9
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
| June 30, |
|
| December 31, |
| |||
| $ |
|
| $ |
| |||
Prepaids and deposits |
|
| 5,601 |
|
|
| 5,872 |
|
Receivables |
|
| 737 |
|
|
| 2,922 |
|
Interest receivable |
|
| 2,397 |
|
|
| 1,573 |
|
|
| 8,735 |
|
|
| 10,367 |
|
On April 28, 2022, LAC North America entered into an agreement to acquire shares of Green Technology Metals Limited (ASX: GT1) (“GT1”), a North American focused lithium exploration and development public company with hard rock spodumene assets in north-western Ontario, Canada, in a private placement for total consideration of $10,000.
As at June 30, 2024, the Company holds 13,301 common shares, representing approximately 4% of the issued and outstanding shares of GT1 with a fair value of $683 (December 31, 2023 - $2,580) determined based on the market price of GT1 shares as of such date. A loss on change in fair value of GT1 shares of $1,897 (2023 - $1,137) was recognized in the Condensed Consolidated Interim Statements of Comprehensive Loss for the six months ended June 30, 2024.
The Company’s investment in GT1 is classified as a Level 1 financial instrument (Note 21).
On July 18, 2022, LAC North America made a $5,000 investment in Ascend Elements, Inc. (“Ascend Elements”), a private US based lithium-ion battery recycling and engineered material company, by way of a subscription for Series C-1 preferred shares.
As at June 30, 2024, the Company holds 806 series C-1 preferred shares of Ascend Elements with an estimated fair value of $6,007 (December 31, 2023 - $8,582). As Ascend Elements is a private company, there is no observable market data to use as a measurement of fair value, so the Company’s assessment was determined based on a review of Ascend Elements’ business developments, financings and trends in the share prices of other companies in the same industry sector.
At June 30, 2024, the company estimated the fair value of the investment in Ascend Elements and determined the value had decreased by 30% based on a number of factors, primarily the overall downturn of the lithium battery recycling market as measured by the reduction in the fair value of a basket of publicly-traded peer companies during the second quarter of 2024. As a result, a loss on change in the fair value of the investment in Ascend Elements of $2,575 was recognized in the Condensed Consolidated Interim Statement of Comprehensive Loss for the six months ended June 30, 2024.
The Company’s investment in Ascend Elements is classified as a Level 3 financial instrument (Note 21).
10
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
| Thacker Pass1 |
|
| Equipment |
|
| Right of Use assets |
|
| Other |
|
| Total |
| ||||||
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
As at December 31, 2022 |
| - |
|
|
| 2,740 |
|
|
| 3,378 |
|
|
| 701 |
|
|
| 6,819 |
| |
Transfers from E&E (Note 9) |
|
| 9,091 |
|
| - |
|
| - |
|
| - |
|
|
| 9,091 |
| |||
Additions |
|
| 193,728 |
|
|
| 210 |
|
|
| 549 |
|
|
| 134 |
|
|
| 194,621 |
|
Disposals |
| - |
|
| - |
|
|
| (275 | ) |
|
| (90 | ) |
|
| (365 | ) | ||
As at December 31, 2023 |
|
| 202,819 |
|
|
| 2,950 |
|
|
| 3,652 |
|
|
| 745 |
|
|
| 210,166 |
|
Additions |
|
| 90,151 |
|
|
| 52 |
|
|
| 1,096 |
|
|
| 224 |
|
|
| 91,523 |
|
Disposals |
| - |
|
|
| (36 | ) |
|
| (14 | ) |
| - |
|
|
| (50 | ) | ||
As at June 30, 2024 |
|
| 292,970 |
|
|
| 2,966 |
|
|
| 4,734 |
|
|
| 969 |
|
|
| 301,639 |
|
| Thacker Pass1 |
| Equipment |
|
| Right of Use assets |
|
| Other |
|
| Total |
| |||||
| $ |
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
As at December 31, 2022 |
| - |
|
| 1,644 |
|
|
| 1,024 |
|
|
| 215 |
|
|
| 2,883 |
|
Depreciation for the year |
| - |
|
| 587 |
|
|
| 807 |
|
|
| 85 |
|
|
| 1,479 |
|
Disposals |
| - |
| - |
|
|
| (188 | ) |
|
| (90 | ) |
|
| (278 | ) | |
As at December 31, 2023 |
| - |
|
| 2,231 |
|
|
| 1,643 |
|
|
| 210 |
|
|
| 4,084 |
|
Depreciation for the period |
| - |
|
| 302 |
|
|
| 602 |
|
|
| 55 |
|
|
| 959 |
|
Disposals |
| - |
|
| (5 | ) |
|
| (14 | ) |
| - |
|
|
| (19 | ) | |
As at June 30, 2024 |
| - |
|
| 2,528 |
|
|
| 2,231 |
|
|
| 265 |
|
|
| 5,024 |
|
| Thacker Pass1 |
|
| Equipment |
|
| Right of Use assets |
|
| Other |
|
| Total |
| ||||||
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
Net book value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
As at December 31, 2023 |
|
| 202,819 |
|
|
| 719 |
|
|
| 2,009 |
|
|
| 535 |
|
|
| 206,082 |
|
As at June 30, 2024 |
|
| 292,970 |
|
|
| 438 |
|
|
| 2,503 |
|
|
| 704 |
|
|
| 296,615 |
|
The Company has certain commitments for royalty and other payments to be made on Thacker Pass 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 Thacker Pass.
Prepayments of $3,298 at June 30, 2024 related to the non-current portion of project insurance for Thacker Pass, are included in Other assets. Prepayments of $15,315 at December 31, 2023 related to housing units and related transportation costs, as well as the non-current portion of project insurance for Thacker Pass, are included in Other assets.
11
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
Assessment of Impairment
Approach
Following the identification of the existence of an impairment indicator under IAS 36, management conducted an evaluation of the recoverable amount of Thacker Pass using both internal and external sources of information and compared that amount to the carrying value. No impairment was identified.
The recoverable amount of Thacker Pass was determined on a fair value basis using a discounted net present value derived from an economic model projecting the after-tax future cash flows of Thacker Pass, less costs to sell. The economic model included an updated initial capital cost of Phase 1 to adjust for new market conditions and updated the assumptions for the forecast sales price of lithium carbonate.
Key Assumptions at June 30, 2024
Key assumptions used by management in determining the recoverable value of Thacker Pass included lithium sales prices, discount rate, and Phase 1 initial capital cost.
Lithium sale price: Lithium is not an exchange traded commodity with a single globally quoted market price. Rather, lithium prices are determined by a negotiation which reflects sales terms and conditions, product quality and consistency and regional differences in pricing and tariffs. For the purposes of forecasting lithium prices for Thacker Pass Phase 1 for the impairment assessment, the Company sourced future lithium price forecasts from an independent global study produced by a market intelligence firm as well as median long term analyst consensus lithium prices. Based on these forecasts, the Company established a forecast average lithium price over the first 25 years of Thacker Pass Phase 1 mine life from 2028 (the year of commencement of production and sales) to 2052 of $27,079 per tonne, including a long-term lithium price (2035 and beyond) of $26,300 per tonne.
Discount rate: The Company calculated a discount rate of 11.6% based on a weighted average cost of capital.
Initial Phase 1 capital cost: The Company used an initial capital cost for Phase 1 of $2.93 billion, consistent with the Company’s most recently disclosed and current estimate.
Sensitivity Analysis at June 30, 2024
Management determined that given the current update to Phase 1 initial capital, the economic model is most sensitive to changes in lithium prices and the discount rate. Therefore, the Company tested the sensitivity of the economic model to (1) an increase in the discount rate by 1% and (2) a reduction in the forecast long-term lithium sales price from $26,300 per tonne to $20,000 per tonne. Each of these changes did not individually result in an impairment in the recoverable value of Thacker Pass.
12
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
Exploration and evaluation assets relating to Thacker Pass and other projects were as follows:
|
| Total |
| |
|
| $ |
| |
Exploration and evaluation assets, as at December 31, 2022 |
|
| 9,514 |
|
Additions |
|
| 347 |
|
Transfers to PP&E (Note 8) |
|
| (9,091 | ) |
Exploration and evaluation assets, as at December 31, 2023 |
|
| 770 |
|
Additions |
|
| 10 |
|
Exploration and evaluation assets, as at June 30, 2024 |
|
| 780 |
|
Upon commencement of development of Thacker Pass on February 1, 2023, the capitalized costs of Thacker Pass were transferred from exploration and evaluation assets to property, plant and equipment and Old LAC commenced capitalizing development costs.
Concurrent with the transfer of the Thacker Pass assets from exploration and evaluation to property, plant and equipment, the Company completed an impairment test of Thacker Pass which compared the carrying value to the recoverable amount. The recoverable amount is the greater of the value in use and the fair value less disposal costs. The fair value less disposal costs was calculated using a discounted cash flow model with feasibility study economics. The significant assumptions that impacted the fair value included future lithium prices, capital cost estimates, operating cost estimates, estimated mineral reserves and resources, and the discount rate. Based on the result of the impairment test, management concluded that there was no impairment.
On January 30, 2023, LAC North America entered into an agreement with GM, pursuant to which GM agreed to make a $650,000 equity investment in two tranches. The proceeds from the Transaction are to be used for the construction and development of Thacker Pass. On February 16, 2023, the Tranche 1 Investment of $320,148 closed, resulting in GM’s purchase of 15,002 common shares of Old LAC which became an equivalent number of shares of the Company post-Separation. In connection with the Tranche 1 Investment, the Company and GM also entered into (a) a warrant certificate and a subscription agreement (the “GM Tranche 2 Agreements”), each in relation to a second tranche investment of up to $329,852; (b) the Offtake Agreement and (c) an investor rights agreement.
GM Tranche 2 Agreements
Pursuant to the GM Tranche 2 Agreements, as the Separation was completed before the closing of the Tranche 2 Investment by GM, the GM Tranche 2 Agreements with Old LAC were made ineffective in consideration for the purchase of two common shares of Old LAC and, a new subscription agreement was executed by New LAC and GM. The terms of the New LAC subscription agreement substantially mirrors the subscription agreement previously executed by Old LAC, subject to the shares and price being adjusted by the New LAC relative value ratio, such that GM’s second tranche investment of up to $329,852 will be made in New LAC.
Pursuant the Tranche 2 Investment agreement, GM may purchase common shares of New LAC subject to the satisfaction of certain conditions precedent, including the condition that the Company secures, subject to certain conditions, sufficient funding to complete the development of Phase 1 for Thacker Pass (the “Funding Condition”). The subscription agreement calls for an aggregate purchase price of up to $329,852, with the number of shares to be determined using a price equal to the lower of (a) the 5-day volume weighted average share price (which is determined as of the date the notice that the certain conditions have been met) and (b) $17.36 per share.
13
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
Consistent with typical subscription agreements, the GM Tranche 2 Investment agreement is an executory contract that provides for certain conditions to closing and rights of termination, including in this instance a right which may be exercised upon certain conditions not being met by August 16, 2024. The Company continues to work closely with the DOE and GM to close the financings necessary to fund Thacker Pass and expects to close the DOE Loan and GM investment in the second half of the year.
The GM Tranche 2 Agreements are treated as a derivative because the GM Tranche 2 Agreements may result in the issuance of a variable number of shares for the fixed subscription price. The derivative was initially measured at fair value and subsequently carried at fair value through profit and loss.
The Company recorded the GM Tranche 2 Agreements derivative on January 30, 2023, at an initial fair value of $33,194 and the net proceeds of Tranche 1 investment were recorded in Net former parent investment. Financial advisory fees of $16,803 and other transaction costs of $173 were paid in connection with the closing of the first tranche. The $1,760 portion of the transaction costs related to the GM Tranche 2 Agreements derivative were expensed. Transactions costs of $15,217 attributable to the GM Tranche 1 proceeds were recorded in the Net former parent investment. Financial advisory fees of approximately $6,600 will become payable upon completion of the closing of the second tranche of GM’s investment.
Changes in the value of the GM Tranche 2 Agreements are summarized below:
|
| $ |
| |
GM derivative liability |
|
|
| |
On initial recognition as at January 30, 2023 |
|
| (33,194 | ) |
Gain on change in fair value |
|
| 32,846 |
|
As at December 31, 2023 |
|
| (348 | ) |
Loss on change in fair value |
|
| (12 | ) |
As at June 30, 2024 |
|
| (360 | ) |
The fair value of the derivative as of January 30, 2023, was determined using Monte Carlo simulation with the following Old LAC’s inputs: volatility of 58.34%, share price of $21.99, a risk-free rate of 4.77%, and an expected dividend of 0%. The fair value of the derivative as of December 31, 2023, was estimated with the following inputs: volatility of 71.26%, share price of $6.40, a risk-free rate of 5.54%, and an expected dividend of 0%. The fair value of the derivative as of June 30, 2024, was estimated with the following inputs: volatility of 80.73%, share price of $2.68, a risk-free rate of 5.59%, and an expected dividend of 0%. A loss on change in the fair value of the derivative for the period from December 31, 2023 to June 30, 2024 of $12 (2023 - gain of $28,096) was recognized in the Condensed Consolidated Interim Statement of Comprehensive Loss for the six months ended June 30, 2024.
Valuation of the derivative is sensitive to changes in the Company's share price and the assumed volatility of common shares. The change in fair value of the GM derivative liability for the six months ended June 30, 2024 and year ended December 31, 2023 were driven by underlying valuation assumptions. A reduction/increase of the Company's share price by 10% at June 30, 2024 would result in a corresponding reduction/increase of the derivative value by 28% and 31% respectively.
14
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
Offtake Agreement
As part of the Arrangement, the Offtake Agreement was assigned to New LAC.
Pursuant to the Offtake Agreement, GM may purchase up to 100% of Thacker Pass Phase 1 production at a price based on prevailing market rates. The term of the arrangement for Phase 1 production is ten years, subject to a five-year extension at GM’s option and other limited extensions. The Company has also granted GM a right of first offer on Thacker Pass Phase 2 production. The volume available under the Offtake Agreement is subject to the receipt of the Tranche 2 Investment and may be reduced proportionately in certain circumstances if GM’s remaining investment is less than $329,852.
Leases
| June 30, |
|
| December 31, |
| |||
| $ |
|
| $ |
| |||
|
|
|
|
|
|
| ||
Current portion of leases |
|
| 1,224 |
|
| 854 |
| |
|
|
|
|
|
|
| ||
Long term portion of leases |
|
|
|
|
|
| ||
Office leases |
|
| 1,483 |
|
|
| 1,199 |
|
Cars and equipment leases |
|
| 47 |
|
|
| 69 |
|
Land lease |
|
| 1,848 |
|
|
| 1,845 |
|
|
| 3,378 |
|
|
| 3,113 |
| |
Other liabilities |
|
|
|
|
|
| ||
Mining contractor liability |
|
| 3,500 |
|
|
| 3,500 |
|
|
| 6,878 |
|
|
| 6,613 |
|
Leases for office space, cars and equipment have terms ranging from 2 to 5 years. The land lease for land near the city of Winnemucca has a term of 40 years from signing in November 2023.
Other Liabilities
During Q2 2019, LAC North America entered into a mining design, consulting and mining operations agreement with a mining contractor for Thacker Pass which included a financing component. In accordance with the agreement, LAC North America received $3,500 from the mining contractor in seven consecutive equal quarterly installments, with $1,500 received in 2019 and $2,000 received in 2020. These amounts are included in the mining contractor liability balance.
The Company will pay a success fee to the mining contractor of $4,675 upon achieving certain commercial mining milestones or repay the $3,500 advance without interest if such commercial mining milestones are not met.
15
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
Share Capital
Equity Financing
On April 22, 2024, the Company completed an underwritten public offering (the “Offering”) of 55 million common shares (the “Common Shares”) at a price of $5.00 per Common Share (the “Issue Price”) for aggregate gross proceeds to the Company of $275 million or net proceeds of approximately $262 million. The Company intends to use the net proceeds from the Offering to advance construction and development of Thacker Pass.
Authorized and Issued
The Company's authorized share capital is comprised of an unlimited number of common shares without par value.
At June 30, 2024, 217,915 (December 31, 2023 - 161,778) common shares were issued and outstanding.
Equity Incentive Plan
In connection with the completion of the Separation, the Company adopted an equity incentive plan (the “Equity Incentive Plan”). The Equity Incentive Plan provides for the grant to eligible directors and employees of incentive stock options exercisable to purchase common shares, Company RSUs that convert automatically into common shares and Company PSUs that are subject to performance conditions and/or multipliers and designated as such in accordance with the Equity Incentive Plan that are settled for common shares. The Equity Incentive Plan also provides for the grant to eligible directors of Company DSUs which the directors are entitled to redeem for common shares following retirement or termination from the Board. The Company RSUs may vest immediately or one-third per year on each of the grant anniversary dates over a period of up to three years and Company PSUs generally vest after three years.
In connection with the Arrangement, holders of all awarded DSUs, RSUs and PSUs of Old LAC previously held (collectively, the “Old LAC Units”) received, in lieu of such outstanding Old LAC Units, equivalent incentive securities of the Company and of Lithium Argentina. On October 3, 2023, the Company had 160,048 common shares issued and outstanding, and 225 DSUs, 2,171 RSUs and 1,037 PSUs were issued in connection with the Arrangement.
Restricted Share Units
Pursuant to the Arrangement, the holders of the Old LAC RSUs exchanged each Old LAC RSU for one New LAC RSU and 0.87 of a new Lithium Argentina RSU. New LAC RSUs issued to holders of Old LAC RSU who serve as a director, employee or consultant of Lithium Argentina rather than New LAC upon the Separation vested immediately on closing of the Separation, while RSUs issued to those who serve New LAC are subject to the vesting conditions of the original Old LAC awards.
During the six months ended June 30, 2024, the Company granted 1,936 RSUs to its employees and consultants. The total estimated fair value of the RSUs was $9,337 (2023 - $3,209) based on the market value of the Company’s shares on the grant date. As at June 30, 2024, there was $7,647 (2023 - $2,739) of total unamortized compensation cost relating to unvested RSUs.
16
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
During the six months ended June 30, 2024, stock-based compensation expense related to RSUs of $1,902 was charged to operating expenses (2023 - $70) and $1,190 was capitalized to Thacker Pass project (2023 - $675). In Q1 2024, 642 RSUs were issued for 2023 annual bonuses and included in $3,070 of accrued liabilities at December 31, 2023.
A summary of changes to the number of outstanding RSUs is as follows:
|
| Number of RSUs |
| |
RSUs issued on Separation |
|
| 2,171 |
|
Converted into shares |
|
| (1,191 | ) |
Granted |
|
| 670 |
|
Balance, RSUs outstanding as at December 31, 2023 |
|
| 1,650 |
|
Converted into common shares |
|
| (815 | ) |
Granted |
|
| 1,936 |
|
Cancelled |
|
| (32 | ) |
Balance, RSUs outstanding as at June 30, 2024 |
|
| 2,739 |
|
Deferred Share Units
During the six months ended June 30, 2024, the Company granted 42 DSUs to its directors. The total estimated fair value of the DSUs was $283.
A summary of changes to the number of outstanding DSUs is as follows:
|
| Number of DSUs |
| |
DSUs issued on Separation |
|
| 225 |
|
Converted into common shares |
|
| (130 | ) |
Balance, DSUs outstanding as at December 31, 2023 |
|
| 95 |
|
Granted |
|
| 42 |
|
Balance, DSUs outstanding as at June 30, 2024 |
|
| 137 |
|
Performance Share Units
During the six months ended June 30, 2024, the Company granted 442 PSUs to its employees. The total estimated fair value of the PSUs was $2,793 (2023 - $621) based on the fair value of the Company’s shares on the grant date. As at June 30, 2024, there was $3,806 (2023 – $640) of unamortized compensation costs relating to unvested PSUs. During the six months ended June 30, 2024, stock- based compensation expense related to PSUs of $693 was charged to operating expenses (2023 - $11) and $119 was capitalized to Thacker Pass project (2023 - $17).
A summary of changes to the number of outstanding PSUs is as follows:
|
| Number of PSUs |
| |
PSUs issued on Separation |
|
| 1,037 |
|
Converted into common shares |
|
| (409 | ) |
Balance, PSUs outstanding as at December 31, 2023 |
|
| 628 |
|
Granted |
|
| 442 |
|
Converted into common shares |
|
| (320 | ) |
Balance, PSUs outstanding as at June 30, 2024 |
|
| 750 |
|
17
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
The weighted average number of common shares outstanding used in the calculation of both basic and diluted earnings per share for periods prior to the Separation was derived from common shares issued as of the Separation date of October 3, 2023.
Loss per share for the three and six months ended June 30, 2023, which is presented on a “carve-out” basis has been calculated using the number of shares of New LAC that were issued and outstanding upon Separation on October 3, 2023.
The Company entered into the following transactions with related parties:
Transition Services Agreement
Pursuant to the Separation, the Company and Lithium Argentina entered into a Transition Services Agreement whereby each company provides various accounting, technical and other services, including managing settlement of employee equity awards, to each other for a defined period of time.
Compensation of Directors and Key Management
The following presentation of the remuneration of directors and key management personnel of the Company. Directors and key management differ for the periods before and after Separation. The amounts for the comparative period ended June 30, 2023 represent an allocation of the remuneration of those directors and key management personnel allocated to LAC North America prior to the Separation date of October 3, 2023. The amounts for the current period ended June 30, 2024 are the actual costs incurred by the Company for those directors and key management personnel for compensation earned at and incurred by the Company.
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| |||||
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
Salaries, bonuses, benefits and directors' fees included in the Consolidated Statement of Comprehensive loss |
|
| 937 |
|
|
| 532 |
|
|
| 1,879 |
|
|
| 1,100 |
|
Equity compensation |
|
| 933 |
|
|
| 965 |
|
|
| 1,827 |
|
|
| 1,259 |
|
|
|
| 1,870 |
|
|
| 1,497 |
|
|
| 3,706 |
|
|
| 2,359 |
|
Amounts due to directors and key management are as follows:
|
|
|
|
| June 30, |
|
| December 31, |
| |||
|
|
|
|
| $ |
|
| $ |
| |||
Total due to directors and key management |
|
|
|
|
|
| 230 |
|
|
| 2,376 |
|
18
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
The following table summarizes the Company’s general and administrative expenses, which represent the activity of LAC North America for the comparative period ended June 30, 2023 and actual expenses for the current period ended June 30, 2024:
|
| Three months ended June 30, |
|
| Six months ended June 30, |
| ||||||||||
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| |||||
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
Salaries, benefits and directors’ fees |
|
| 2,037 |
|
|
| 1,039 |
|
|
| 4,577 |
|
|
| 1,951 |
|
Office and professional fees |
|
| 1,834 |
|
|
| 2,253 |
|
|
| 3,066 |
|
|
| 2,708 |
|
Regulatory and filing fees |
|
| 282 |
|
|
| 52 |
|
|
| 458 |
|
|
| 138 |
|
Investor and government relations |
|
| 548 |
|
|
| 342 |
|
|
| 906 |
|
|
| 461 |
|
Depreciation |
|
| 79 |
|
|
| 57 |
|
|
| 87 |
|
|
| 100 |
|
|
| 4,780 |
|
|
| 3,743 |
|
|
| 9,094 |
|
|
| 5,358 |
|
The following table summarizes the Company’s exploration and evaluation expenditures:
|
| Three months ended June 30, |
| Six months ended June 30, |
| |||||
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| ||
| $ |
| $ |
| $ |
| $ |
| ||
Consulting and salaries |
| - |
| - |
| - |
|
| 2,406 |
|
Engineering |
| - |
| - |
| - |
|
| 782 |
|
Permitting and environmental |
| - |
| - |
| - |
|
| 268 |
|
Field supplies and other |
| - |
| - |
| - |
|
| 14 |
|
Depreciation |
| - |
| - |
| - |
|
| 196 |
|
Drilling and geological expenses |
| - |
| - |
| - |
|
| 98 |
|
| - |
| - |
| - |
|
| 3,764 |
|
The following table summarizes the Company’s transactions costs:
|
| Three months ended June 30, |
|
| Six months ended June 30, |
| ||||||||||
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| ||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
DOE Loan due diligence costs |
|
| 1,106 |
|
|
| 488 |
|
|
| 1,710 |
|
|
| 488 |
|
Other financing activities |
| 210 |
|
| - |
|
|
| 471 |
|
| - |
| |||
Separation cost allocation |
| - |
|
|
| 1,166 |
|
| - |
|
|
| 3,640 |
| ||
General Motors investment |
| - |
|
|
| 1,148 |
|
| - |
|
|
| 2,702 |
| ||
|
|
| 1,316 |
|
|
| 2,802 |
|
|
| 2,181 |
|
|
| 6,830 |
|
DOE Loan costs relate to due diligence costs to advance the DOE Loan. Other financing costs include legal and advisory fees related to financing activities. Separation costs are allocations of legal and professional fees from the former parent relating to the planning for, execution and completion of the Separation. General Motors investment includes transaction costs related to the derivative liability component of the Tranche 2 Investment.
19
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
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 earned on cash deposits |
|
| 4,181 |
|
| - |
|
|
| 6,275 |
|
| - |
| ||
Other |
|
| (14 | ) |
|
| 44 |
|
|
| (199 | ) |
|
| 52 |
|
|
|
| 4,167 |
|
|
| 44 |
|
|
| 6,076 |
|
|
| 52 |
|
The Company operates in one operating segment. Thacker Pass was in the exploration and evaluation phase and was transferred to the development stage effective February 1, 2023. Substantially all the assets and the liabilities of the Company relate to Thacker Pass.
|
|
|
|
| Six months ended June 30, |
| |||||
|
|
|
| 2024 |
|
| 2023 |
| |||
|
|
|
| $ |
|
| $ |
| |||
Interest received on cash deposits |
|
|
|
|
| 5,450 |
|
| - |
| |
Interest paid |
|
|
|
|
| 87 |
|
|
| 106 |
|
Financial instruments recorded at fair value on the 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:
The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified in the lowest level of the hierarchy for which a significant input has been considered in measuring fair value. Common shares and preferred shares acquired as part of the GT1 and Ascend Elements investments respectively, and the GM Tranche 2 Agreements derivative are measured at fair value on the Condensed Consolidated Statements of Financial Position on a recurring basis.
Cash and cash equivalents, and receivables, are measured at amortized cost on the Condensed Consolidated Statements of Financial Position. As at June 30, 2024, the fair value of financial instruments measured at amortized cost approximates their carrying value. GT1 shares are classified at level 1 of the fair value hierarchy (see Note 6), the GM Tranche 2 Agreements derivative (Note 10) is classified at level 2 of the fair value hierarchy and Ascend Elements preferred shares are classified at level 3 of the fair value hierarchy (Note 7).
20
LITHIUM AMERICAS CORP. (FORMERLY 1397468 B.C. LTD.)
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)
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 that the capital base is adequate in relation to those risks. The principal risks which 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 and cash equivalents and receivables. The Company’s maximum exposure to credit risk for cash and receivables is the amount disclosed in the Statements of Financial Position. Exposure to credit loss is limited by placing cash and cash equivalents (including the Tranche 1 Investment proceeds) with two major Canadian banks, invested in US treasury bills and other short-term investments issued by the Canadian government or Canadian chartered banks. Expected credit losses estimated to be de minimis.
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. The Company prepares annual budgets, which are regularly monitored and updated as considered necessary. As at June 30, 2024, the Company had cash and cash equivalents of $375,830 to settle current liabilities of $19,090. Current liabilities include the GM Tranche 2 Agreements derivative which will be settled in shares.
The following table summarizes the contractual maturities of the Company’s financial liabilities on an undiscounted basis:
|
| Years ended December 31, |
| |||||||||||||||||
| 2024 |
|
| 2025 |
|
| 2026 |
|
| 2027 |
|
| Total |
| ||||||
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
Accounts payable and accrued liabilities |
|
| 17,506 |
|
| - |
|
| - |
|
| - |
|
|
| 17,506 |
| |||
Obligations under office leases¹ |
|
| 638 |
|
|
| 1,217 |
|
|
| 829 |
|
|
| 152 |
|
|
| 2,836 |
|
Obligations under land leases¹ |
|
| 34 |
|
|
| 70 |
|
|
| 73 |
|
|
| 4,940 |
|
|
| 5,117 |
|
Other obligations¹ |
|
| 25 |
|
|
| 3,551 |
|
|
| 23 |
|
| - |
|
|
| 3,599 |
| |
Total |
|
| 18,203 |
|
|
| 4,838 |
|
|
| 925 |
|
|
| 5,092 |
|
|
| 29,058 |
|
Foreign Currency Risk
The Company’s functional currency is the USD. The Company is exposed to foreign currency risk on expenditures incurred in Canadian dollars (“CAD”) which are primarily for corporate expenditures at the head office in Canada. As at June 30, 2024, the Company held $592 in cash and cash equivalents denominated in CAD. Strengthening/(weakening) of a USD/CAD exchange rate by 10% would have resulted in a foreign exchange (loss)/gain for the Company of $59 at June 30, 2024.
On August 5, 2024, the Company received a $11.8 million grant from the U.S. Department of Defense to support an upgrade of local power infrastructure and to help build a transloading facility.
21