Lithium Americas Corp. (TSX: LAC) (NYSE: LAC)
("
Lithium Americas" or the
"
Company") is pleased to announce that its Board
of Directors has unanimously approved the execution of an
arrangement agreement providing for the reorganization of the
Company that will result in the separation of its North American
and Argentine business units into two independent public companies
(the
“Separation”).
The Separation will
establish an Argentina focused lithium company (“Lithium
Argentina”) and a North America focused lithium company
(“Lithium Americas (NewCo)”). Lithium Argentina
will own Lithium Americas’ current interest in its Argentina
lithium assets, including the 44.8% interest in Caucharí-Olaroz,
the 100%-owned Pastos Grandes project and the 65% interest in the
Sal de la Puna project. Lithium Americas (NewCo) will own the
100%-owned Thacker Pass lithium project in Humboldt County, Nevada,
as well as the Company’s investments in Green Technology Metals
Limited (ASX:GT1) and Ascend Elements, Inc.
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KEY BENEFITS OF THE
SEPARATION
The Separation is
expected to enhance the long-term prospects for each of the
business units and provide a number of benefits, including, among
others:
- Provide each
company with a sharper business and strategic focus, enabling the
separate businesses to better attract, retain and motivate key
employees.
- Enable each
business to pursue its independent and unique growth opportunities.
- Lithium
Argentina: Ramp-up of Caucharí-Olaroz, pursuit of Stage 2 expansion
and further growth with the significant resource, along with
advancement and construction decision regarding Pastos Grandes and
potential upside at Sal de la Puna.
- Lithium Americas
(NewCo): Construction and production of Phase 1 of Thacker Pass,
and planning and execution of Phase 2 and beyond.
- Improve the market's ability to
evaluate each business and value it against its comparables,
providing shareholders with enhanced value and flexibility through
independent investment opportunities.
- Provide each company with
independent access to capital, resulting in more tailored capital
allocation practices, thereby allowing each company to expand
deeper into its specific domain to maximize the value of its
resources.
- Expected to be executed on a tax-deferred basis with tax
rulings and to have minimal dis-synergies.
“With this approval by
the Board of Directors, we are excited to clear a key milestone in
moving forward to separate Lithium Americas into two distinct
leading lithium companies,” said Jonathan Evans, President and CEO
of Lithium Americas. “We look forward to the value that can be
created for shareholders through Lithium Americas (NewCo)’s unique
position and the development of one of the largest lithium
resources in the U.S., as well as the value generated through
Lithium Argentina’s near-term production portfolio with a
significant growth pipeline from two high-quality projects.”
LITHIUM AMERICAS (NEWCO)
MANAGEMENT
Upon completion of the Separation, Lithium
Americas (NewCo)’s management team will include, among others:
- Jonathan Evans (President & CEO)
– current Director, President & CEO of Lithium Americas
- Pablo Mercado (EVP & CFO) –
current EVP & CFO of Lithium Americas
LITHIUM ARGENTINA
MANAGEMENT
Lithium Argentina’s management team will
include, among others:
- John Kanellitsas (Interim President
& CEO) – current Executive Vice Chair of Lithium Americas
- Alex Shulga (EVP & CFO) –
current VP, Finance of Lithium Americas
Additional details
with respect to the management team of each entity and the
composition of their boards of directors will be set out in the
Management Information Circular (the
“Circular”).
ANTICIPATED TIMING OF ANNUAL AND SPECIAL
MEETING
The annual and special meeting of Lithium
Americas shareholders to consider approval of the transaction and
annual meeting matters, among other things, is to be held on or
about July 31, 2023 (the “Meeting”). The Board of
Directors of the Company recommends that shareholders vote in favor
of the Separation at the Meeting.
The Separation will be effected by way of a
court-approved plan of arrangement under the Business Corporations
Act (British Columbia). Under the plan of arrangement, shareholders
will retain their proportionate interest in shares of the Company
and receive newly issued shares of Lithium Americas (NewCo) in
proportion to their then-current ownership of the Company. The
Separation will be subject to the approval of: (i) 66 2/3% of votes
cast by Lithium Americas shareholders; and (ii) a simple majority
of the votes cast by Lithium Americas shareholders, excluding for
this purpose the votes held by any person as may be required under
Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions.
It is currently expected that the Circular, to
be prepared in connection with the Meeting, will be finalized and
made available on Lithium Americas’ SEDAR profile at www.sedar.com
by the end of June 2023. The Circular will also contain further
details on the allocation of assets, liabilities and capital
structure of the two independent public companies upon
separation.
Until the Separation
is complete, Lithium Americas will continue to operate as a single
company.
CONDITIONS TO THE
TRANSACTION
Completion of the
Separation is subject to customary conditions and approvals,
including the receipt of the Canada Revenue Agency ruling, all
required third party approvals, court, tax, stock exchange
(including the listing of Lithium Americas (NewCo) common shares on
the Toronto Stock Exchange (“TSX”) and the New
York Stock Exchange (“NYSE”)) and regulatory
approvals and shareholder approval.
FAIRNESS OPINIONS
Lithium Americas’
Board of Directors received fairness opinions from BMO Capital
Markets and Stifel GMP that as at the date of such opinions and
based upon and subject to the various factors, assumptions,
qualifications and limitations set forth therein, the consideration
to be received by Lithium Americas’ shareholders under the
Separation is fair, from a financial point of view, to Lithium
Americas’ shareholders.
ARRANGEMENT AGREEMENT
The Separation is
governed by the terms of the arrangement agreement entered into
today between Lithium Americas and 1397468 B.C. Ltd., the spinout
entity that will become Lithium Americas (NewCo). A copy of the
arrangement agreement will be filed under Lithium Americas’ profile
on SEDAR at www.sedar.com.
ABOUT LITHIUM
AMERICAS
Lithium Americas is focused on advancing lithium
projects in Argentina and the United States to production. In
Argentina, Caucharí-Olaroz is advancing towards first production
and Pastos Grandes represents regional growth. In the U.S., Thacker
Pass has received its Record of Decision and has commenced
construction. The Company trades on both the TSX and on the NYSE,
under the ticker symbol “LAC.”
For further information contact:Investor
RelationsTelephone: 778-656-5820Email:
ir@lithiumamericas.comWebsite: www.lithiumamericas.com
FORWARD-LOOKING INFORMATION
Certain statements in this release constitute
“forward-looking statements” within the meaning of applicable
United States securities legislation and “forward-looking
information” under applicable Canadian securities legislation
(collectively, “forward-looking statements”). Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause the actual results, events, performance or
achievements of the proposed Separation and of the Company (Lithium
Americas (NewCo)’s / Lithium Argentina’s), its projects, or
industry results, to be materially different from any future
results, events, performance or achievements expressed or implied
by such forward-looking statements. Such statements can be
identified by the use of words such as “may,” “would,” “could,”
“will,” “intend,” “expect,” “believe,” “plan,” “anticipate,”
“estimate,” “schedule,” “forecast,” “predict” and other similar
terminology, or state that certain actions, events or results
“may,” “could,” “would,” “might” or “will” be taken, occur or be
achieved. These statements reflect the Company’s current
expectations regarding future events, financial or operating
performance and results, and speak only as of the date of this
release. Such statements include without limitation, statements
with respect to the proposed Separation, the expected timetable for
completing the Separation (including timing of the Canadian and
U.S. tax rulings), the ability of the Company to complete the
Separation on the terms described herein, or at all, the receipt
shareholder and required third party, court, tax, stock exchange
and regulatory approvals required for the Separation (including
obtaining the Canadian and U.S. tax rulings in respect thereof),
the expected holdings and assets of the entities resulting from the
Separation, the expected benefits of the Separation for each
business and to the Company’s shareholders and other stakeholders,
the strategic advantages, future opportunities and focus of each
business, expectations regarding the status of development of the
Company’s projects, the expected potential benefits of the Thacker
Pass project for creation of a battery supply chain in the United
States, and expectations regarding the process of building the
teams of Lithium Americas (NewCo) and Lithium Argentina.
Forward-looking statements involve significant
risks and uncertainties, should not be read as guarantees of future
performance, events or results and will not necessarily be accurate
indicators of whether or not such events or results will be
achieved. A number of factors could cause actual results to differ
materially from the results discussed in the forward-looking
statements or information, including, but not limited to,
uncertainties with obtaining required approvals, rulings, court
orders and consents, or satisfying other requirements, necessary or
desirable to permit or facilitate completion of the Separation
(including tax, regulatory and shareholder approvals); there being
no assurance that Lithium Americas (NewCo) will meet all the
requirements to list its common shares on the TSX and/or the NYSE,
future factors or events that may arise making it inadvisable to
proceed with, or advisable to delay or alter the structure of the
Separation; the performance, the operations and financial condition
of Lithium Americas (NewCo) and Lithium Argentina as separately
traded public companies, including the reduced geographical and
property portfolio diversification resulting from the Separation;
the impact of the Separation on the trading prices for, and market
for trading in, the shares of the Company, Lithium Americas (NewCo)
and Lithium Argentina (collectively the “Entities” and
individually, an “Entity”); the potential for significant tax
liability for a violation of the tax-deferred spinoff rules
applicable in Canada and the United States; uncertainties with
realizing the potential benefits of the Separation; risks
associated with mining project development, achieving anticipated
milestones and budgets as planned, and meeting expected timelines;
risks inherent in litigation that could result in additional
unanticipated delays or rulings that are adverse for an Entity or
its projects; maintaining local community support in the regions
where an Entity’s projects are located; changing social perceptions
and their impact on project development and litigation; ongoing
global supply chain disruptions and their impact on developing an
Entity’s projects; availability of personnel, supplies and
equipment; the impact of inflation or changing economic conditions
on an Entity, its projects and their feasibility; any impacts of
COVID-19 or an escalation thereof on the business of an Entity;
unanticipated changes in market price for an Entity’s shares;
changes to an Entity’s current and future business plans and the
strategic alternatives available to the Entity; industry and stock
market conditions generally; demand, supply and pricing for
lithium; and general economic and political conditions in Canada,
the United States, Argentina and other jurisdictions where an
Entity conducts business. Additional information about certain of
these assumptions and risks and uncertainties is contained in the
Company’s filings with securities regulators, including the
Company’s most recent annual information form and most recent
management’s discussion and analysis for the Company’s most
recently completed financial year and interim financial period,
which are available on SEDAR at www.sedar.com and EDGAR at
www.sec.gov.
Although the forward-looking statements
contained in this release are based upon what management of the
Company believes are reasonable assumptions as of the date hereof,
there can be no assurance that actual results will be consistent
with these forward-looking statements. These forward-looking
statements are made as of the date of this release and are
expressly qualified in their entirety by this cautionary statement.
Subject to applicable securities laws, the Company does not assume
any obligation to update or revise the forward-looking statements
contained herein to reflect events or circumstances occurring after
the date of this release.
Lithium Americas (TSX:LAC)
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