Lithium Americas in its strategic transaction with Ganfeng Lithium to jointly advance Caucharí-Olaroz

On August 13, 2018, Lithium Americas announced the agreement to implement a number of transactions, pursuant to which, among other things, a subsidiary of Sociedad Química y Minera de Chile S.A. has agreed to sell all of its interest in Minera Exar S.A., the holding company for the Caucharí-Olaroz lithium brine project, to a subsidiary of Jiangxi Ganfeng Lithium Co., Ltd. for US$87.5 million in cash plus a deferred payment of US$50 million.

As a result of the transaction, Ganfeng Lithium will become Lithium Americas’ partner in developing and operating the Caucharí-Olaroz, which is currently under development in Jujuy, Argentina. Lithium Americas’ interest in Caucharí-Olaroz will increase from 50% to 62.5%, with Ganfeng Lithium holding the remaining 37.5% interest.

In connection with the Transaction, Ganfeng Lithium has agreed to provide Lithium Americas with a new US$100 million limited recourse, subordinated loan facility to fund Lithium Americas’ share of Caucharí-Olaroz’ capital expenditures. As a result, Lithium Americas anticipates having resources to fully fund its share of the capital expenditures for Stage 1 of Caucharí-Olaroz.

Osler, Hoskin & Harcourt LLP acted as counsel to the Special Committee with a team led by Manny Pressman and including James Brown, Kai Sheffield, Arielle Kaplan (Corporate); Martha Martindale (Financial Services).