I'm not talking about share ownership vis-à-vis Lithium Americas (NYSE:) in the title, I'm rather mentioning their sources of potential income from lithium extraction.
That's right, I said 'potential earnings'.
Recent US legal rulings have cleared the runway for US growth and the company's 49% stake in the Caucharí-Olaroz lithium project in Jujuy province, Argentina, will begin production within the next 3 months . Ganfeng Lithium Co Ltd (HK:), China's largest lithium company, is LAC's joint venture partner, with a 51% ownership stake.
According to the chairman of Lithium Americas:
"Caucharí-Olaroz is on track to become the largest new lithium brine operation in more than 20 years."
Note, however, that Lithium Americas is not a solid, old-line, huge company like Albemarle (NYSE:) or almost any of the others I've discussed in previous articles on lithium extraction and manufacturing. LAC is a relatively small company that, as they boast on their website, is "On the Road to Production".
With this in mind, please note that if you visit their website for their latest company presentation, you will see 3 pages of "warning statements". (The presentation was just updated in August.)
That said, these are big things. Caucharí-Olaroz is the largest known NI 43-101 lithium brine well under development in South America. Personally, I believe this will ensure the success of this project.
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Source: Company presentation Lithium Americas
That's just in Argentina, an important country in the lithium triangle. (The others are Chile and Bolivia.) This next one might be even bigger. Thacker Pass is the largest known lithium source in the US. I believe it will also be opened.
The "largest known lithium source in the US" is to be opened. This property is 100% owned by LAC.
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Source: Company presentation Lithium Americas
As you can see below, LAC jumped through almost all the hoops to achieve Thacker Pass.
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Source: Company presentation Lithium Americas
Realizing this dream was not easy. While competent regulators have approved this landmark project in the US and all EIS (Environmental Impact Studies) have been successfully completed, "activists" who say they want to see an all-electric future for transportation in the US will also do whatever they can. able to block the production of lithium and other metals needed to make this happen.
Like it or not, life is about making choices. If we want EVs, we need the electrochemical batteries that power them. Getting the raw materials home is preferable to a country that can shut down production when their autocrat du jour decides he's not getting enough baksheesh.
The "we want to have our cake and eat it too" crowd has fought millions to preserve the desert sagebrush around Thacker Pass in its pristine pre-human state. On Sept. 3, Judge Miranda Du, who previously denied what she called conjectures and hypotheses with no evidence of damage to a future Nevada sage grouse breeding ground, removed another obstacle. Some Native American tribes had indicated that Thacker Pass was the site of a massacre in the 1800s, but provided no evidence of the same.
Here is the overview page for Thacker Pass from the LAC presentation:
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Source: Company presentation Lithium Americas
I should note that one of the advantages Lithium Americas cites above is that Nevada, where I live, is a mining-friendly state. That is definitely true.
Nevada is a farmer/farmer/miner friendly state. There are actually two Nevadas: Clark County (Las Vegas) and with the exception of Reno, a more rural landscape. I think it's fair to say that most Nevada residents are quite environmentally conscious. Our residents are generally much closer to the land than most.
I think we also realize that in order to create the new BEV (Battery Electric Vehicle) ecoverse, we need to disrupt the country slightly and then restore it 100%. We have been doing this for over 100 years.
I would also suggest the importance of amassing our supply of the essential minerals from friendly countries, regions and environments. For example, I keep seeing "news" articles that say that by abandoning Afghanistan, the US is giving China "trillions of rare earths, lithium, etc." has given
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No matter how many times you read this, keep in mind that the source is almost always a DoD estimate (without a geologist anywhere in sight) from 2010 based largely on a highly outdated and biased joint Russian and then- communist Afghan government study
Even if it were true, the lack of roads, railways, water in Afghanistan (lithium needs *a lot* of water for extraction) and transparency/fairness (AFG ranks among the 15 most corrupt countries on earth) means that the costs of extraction would be astronomical compared to Argentina/Chile/Bolivia (the "Lithium Triangle"), the US, Canada and other countries.
Hence my joy to see LAC operating in a highly regulated but "mining friendly" environment like the US in general and Nevada in particular.
A potential of 6 million tons, a state built on mining with extensive experience dealing with responsible mining companies, all transportation infrastructure in place, and the Biggest Little City (Sparks, Nevada, just east of Reno) that used to gamble and has now Tesla (NASDAQ:), Panasonic (OTC:) and others hungry for lithium? I think this is a slam dunk.
Income? No.
But $518 million in cash, a $184 million credit facility, $173 million in long-term commitments, and good research coverage? For my personal investments and the investments I advise through my money management company, I stick with ALB, LAC and others who mine in reliable locations!