Update: Lithium America (Ticker: LAC)

Lithium America announced this morning the completion of Millennial Lithium

https://www.lithiumamericas.com/news/lithium-americas-completes-acquisition-of-millennial-lithium

This was a very strategic transaction which further solidifies the trajectory of Lithium America as it expands from being a Junior Minor pre-production to A diversified multi-mine/multi-country Lithium miner.

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The NPV of the Millennial Lithium project (aka Pastos Grande) at current prices (in reviewing the Feasibility Study) which provides multiples in returns when compares to the acquisition price of Millenial.

Often times that value is not realized for a company the size of Pastos Grande due to an inability to raise capital to finance the project. Lithium America derisks that risk on Millenial as it will soon be flush with capital.

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Lithium America is on the cusp of beginning production of the Cauchari asset in Argentina in the 2nd half of 2022

Due to elevated Lithium prices, it will produce significant positive free cash flows this year and going forward.

This cash flow can be used to help finance both Stage 2 of their production capacity at Cauchari (i.e., currently at 40k tpa going to 60k tpa with contstruction start on Stage 2 in 2022) as well as finance their other projects (i.e., Thacker Pass, Millenial Lithium, and potentially the acquisition and development of Arena Minerals which they have a growing but still minority stake in).

The stream of cash flows about to unfold for LAC avoids the necessity of another strategic partner or taking on dilutive transactions.

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Thacker Pass, if and once the courts rule on the outstanding appeal this quarter, will go into construction in the 2nd half of this year with a production start expected in 2026. The interesting aspect on Thacker Pass is that the caldera it is part of is ownly partially explored and being developed and there is evidence that it may hold upwards of 120MM Tonnes of resource (i.e., further expansion)

If all goes well, it is likely that Millenial Lithium will break ground potentially as early as next year.

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The pipelines of opportunity that Lithium America is laying will make it one of the top 5 lithium producers in the world. Most recently they have been growing their ownership of the nearby Arena Minerals project and there is general speculation of an acquisition that may be in play contingent on further delineation progress on the project and moving forward on the Thacker Pass and cash flow from the Cauchari asset. This would be the fourth potential deposit in a stream of near term production assets that the company is pursuing.

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