Lithium Americas Announces 40,000 TPA Feasibility Study for the Caucharí-Olaroz Lithium Project
September 30, 2019
Lithium Americas Announces 40,000 TPA Feasibility Study for
the Caucharí-Olaroz Lithium Project
Vancouver, Canada: Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) ("Lithium Americas" or the
"Company") is pleased to provide results of a 40,000 tonnes per annum (“tpa”) definitive feasibility study
(“40,000 tpa DFS" or “DFS”) on the Caucharí-Olaroz lithium project ("Caucharí-Olaroz" or the “Project”)
currently under construction in Jujuy Province, Argentina. Caucharí-Olaroz is 100% owned by Minera Exar
S.A. (“Minera Exar”), a 50/50 joint venture between Lithium Americas and Ganfeng Lithium Co., Ltd.
(“Ganfeng Lithium”). Lithium Americas and Ganfeng Lithium have authorized Minera Exar to proceed with
the plan to produce 40,000 tpa of battery-quality lithium carbonate (“Li2CO3”) as outlined in the DFS.
Unless otherwise stated, all figures are quoted in U.S. dollars ("$") and are reported on a 100% equity
project basis.
Highlights:
• 40,000 tpa of Li2CO3 production for 40 years. Updated Mineral Reserve supports annual production
in excess of 40,000 tpa of battery-quality Li2CO3 for 40 years.
• Construction capital cost of $565 million. Construction capital costs include a contingency, over
$200 million in capital already committed in contracts and purchase orders of which $105 million in
capital spent as of June 30, 2019.
• Operating costs of $3,576/t for battery-quality lithium carbonate. Operating costs reflect process
optimizations designed to consistently achieve more stringent purity specifications currently required
by battery material customers.
• Fully-funded to production. Lithium Americas 50% share of Minera Exar is expected be fully-funded
with $221 million available under the Company’s credit and loan facilities and net proceeds from the
$160 million Project investment by Ganfeng Lithium.
• First production targeted by early 2021. Construction on the 40,000 tpa Project is underway and
expected to be completed by the end of 2020 with first production expected in early 2021.
• Conference call and webcast. Conference call and webcast scheduled for Tuesday, October 1, 2019
at 9:00 am EST to discuss the results of the DFS and the Company’s recent developments.
The results of the DFS are provided in Table 1 on a 100% equity project basis:
Table 1: Caucharí-Olaroz 40,000 TPA DFS Results
40,000 TPA DFS
Lithium carbonate average long-term price(1) $12,000/t Li2CO3
Production capacity 40,000 tpa Li2CO3
Project life 40 years
Construction capital costs(2) $565 million
Operating costs $3,576/t Li2CO3
Average EBITDA(3) $307 million
After-tax NPV10% (2)(3) $1,330 million
1. Assumes lower price of $8,000/t and $10,000/t in 2021 and 2022, respectively.
2. Total capital costs of $565 million include $105 million in capital costs sunk as of June 30, 2019 excluded from NPV.
3. Refers to a non-IFRS financial measure. Please see the discussion included at the end of this press release under “Non-IFRS
Financial Measures”.
"With construction underway and funding in place, the results of the 40,000 tpa DFS further supports
Caucharí-Olaroz as a scalable, high-purity source of lithium carbonate for battery material customers,”
commented Jon Evans, President and CEO of Lithium Americas. “We are thankful for the hard work from
the team at Minera Exar, the support from the government of Jujuy, and our 50/50 joint venture partner,
Ganfeng Lithium, for their financial and technical contributions towards optimizing the process design and
securing key equipment for the lithium carbonate plant.”
"Minera Exar is committed to building Caucharí-Olaroz to be one of the most environmentally responsible
lithium projects globally,” commented Gabriel Rubacha, CEO of Minera Exar. “The 40,000 tpa DFS
represents the first of future potential long-term investments in Caucharí-Olaroz for the benefit of the local
communities, employees and Jujuy Province.”
Project Details
Caucharí-Olaroz is located in Jujuy Province in north west Argentina. The Project is situated in the Salar
de Olaroz and Salar de Caucharí, adjacent to Orocobre Ltd.’s Olaroz facility, which has been in production
since 2015. The Project is well serviced by nearby infrastructure including major paved highways which
connect to the port of Antofagasta in Chile, a high- voltage transmission line, an adjacent 300MW solar
project and a gas pipeline.
In 2012, Minera Exar granted a conditional right to Jujuy Energia y Mineria Sociedad del Estado (“JEMSE”),
a mining and energy investment company owned by the government of Jujuy Province in Argentina, to
acquire an 8.5% equity interest in Minera Exar and provide management services as required to develop
the Project.
The 40,000 tpa DFS includes a conventional, commercially -proven brine processing technology optimized
from the salar in partnership with Ganfeng Lithium to produce battery -quality Li2CO3 that can be used to
meet the specifications of battery material producers in manufacturing cathode and electrolyte for lithium-
ion batteries. The DFS follows the 2017 feasibility study on a 25,000 tpa Li2CO3 project (“25,000 tpa DFS”).
Minera Exar has more than 250 employees and approximately 500 contractors at the Project. Construction
is scheduled to be completed by the end of 2020.
Construction of the evaporation ponds commenced in Q1 2018 and is approximately 60% completed. Brine
from production wells started filling ponds in Q4 2018. The liming purification process at the ponds is
expected to commence in Q2 2020.
A significant amount of long- lead time equipment purchases and construction contracts have been
awarded. Contractors for the production wells, ponds and liners, civil works (roads and well platforms),
permanent camp, concrete works and structural steel (buildings) are engaged at the Project site. Equipment
components for the lithium carbonate plant are expected to begin arriving to the sit e later this year.
Permitting
An update to the “Environmental Impacts Report for Exploitation” for Caucharí-Olaroz was approved by
Jujuy Province in 2017 providing all necessary permits to support the 25,000 tpa DFS. In accordance with
the provincial requirements, an update was submitted in August 2019 and is currently being evaluated by
the Jujuy Province to expand the initial production capacity to 40,000 tpa of Li2CO3. This update includes
supplementary environmental studies and information collected during the previous two years as well as
changes to the Project description to reflect the current development plan and increased production
capacity.
Brine Process
The process presented in the 40,000 tpa DFS follows industry standards: pumping brine from the salar,
concentrating the brine through evaporation ponds, and bringing the brine concentrate through an extractive
hydrometallurgical and purification process to produce battery-quality Li2CO3. The updated process has
been refined and optimized using the results of lab and pilot scale testing by Minera Exar, Ganfeng Lithium
and equipment suppliers with experience in manufacturing the industrial equipment that Ganfeng Lithium
uses for the production of high-purity products.
An average evaporation rate of 6.05 mm per day (2,157 mm per year) was used as criterion to design the
pond system. The rate corresponds to measured evaporation rates observed at the site where the ponds
are located. At the demonstrated evaporation rate, the total evaporation area required to produce 40,000
tpa of Li2CO3 is 1,200 ha (12 km2) and includes allowances for salt harvesting and maintenance work. The
ponds are designed with multi-layer liners consisting of a polymer-based material and engineered granular
bedding. The evaporation ponds have been designed with a flat bottom for efficient harvesting and a
shallow brine depth to improve evaporation and with the aim to allow for efficient salt harvesting using
commercially proven equipment employed in Chilean operations.
The Li2CO3 recovery process from brine has been designed to achieve customer quality requirements. This
system is robust and has been engineered to produce a consistent quality product regardless of seasonal
changes in brine composition in the ponds.
The process removes key impurities from the concentrated brine in the ponds before producing high-purity
Li2CO3 in the plant. The process uses a combination of industry standard processes that have been adjusted
for the specific chemistry of the brine in the salar. These steps extract contaminants in a low-impact, cost-
effective order while recovering fresh water from the brine for use in the process. The Li2CO3 precipitation
is controlled carefully to form a high-purity crystal of Li2CO3 that can then be washed, dried and micronized
to meet the required particle sizes from the energy storage space.
The process has been engineered to minimize the use of energy and fresh water. All brine and water used
is recycled multiple times and is cleaned throughout the process. Energy is recovered internally between
multiple process streams and utilities ensuring efficient and optimized consumption. This is expected to
result in environmentally responsible production of high-purity lithium chemicals.
Operating Costs
The operating and construction capital cost estimates have been reviewed and confirmed by Andeburg
Consulting Services Inc. (“ ACSI”) in accordance with NI 43- 101 Standards of Disclosure for Mineral
Projects. The Project cost estimates are based on an exchange rate of 45:1 Argentine pesos to the U.S.
dollar. Despite the recent depreciation in Argentine pesos, Minera Exar does not expect a material impact
to the operating and capital cost estimates as presented in U.S. dollars.
The operating cost estimates in the 40,000 tpa DFS have increased in comparison to the 25,000 tpa DFS
primarily as a result of an $824/t increase in reagent cos ts. The increased reagent use reflects process
changes designed to consistently achieve more stringent low impurity specifications of battery material
customers.
The average operating costs were calculated for a facility with production of 40,000 tpa of battery -quality
Li2CO3 and are presented in Table 2 below.
Table 2: Caucharí-Olaroz - Operating Costs
25,000 TPA DFS 40,000 TPA DFS
Category
Operating Cost
($/t Li2CO3)
% of
Total
Operating Cost
($/t Li2CO3)
% of
Total
Reagents $991 40% $1,815 51%
Pond harvesting & tailings management $345 14% $369 10%
Maintenance $210 8% $302 8%
Labor $166 7% $283 8%
Electric power $187 7% $222 6%
Natural gas $85 3% $145 4%
G&A $86 3% $141 4%
Product transportation $170 7% $127 4%
Catering, security & third-party services $97 4% $61 2%
Consumables $51 2% $53 1%
Water treatment system $38 2% $41 1%
Diesel $69 3% $17 <1%
Total Operating Costs $2,495 100% $3,576 100%
Capital Costs
The total construction capital cost is estimated at $565 million inclusive of a $39 million contingency and
inclusive of $105 million in capital costs incurred before June 30, 2019. Considering that the Project
construction is well under way, with many key contracts and purchase orders already awarded and under
execution including the process equipment, the level of confidence is expected to be approximately ±10%.
Minera Exar does not expect any material impact on the capital costs as a result of the recent foreign
exchange regulations and controls enacted by the Argentine Government.
With a 33% increase in capital costs from the 25,000 tpa DFS published in 2017, the 40,000 tpa DFS
supports a 60% increase in production capacity. Much of the increased capital cost estimate is the result
of an increase in the size of equipment, infrastructure, wells and piping without any major change in the
pond layout under construction. The cost increase in the ponds corresponds to additional electromechanical
work not previously included in the 25,000 tpa DFS.
Detailed capital cost estimates are presented on a 100% project equity basis in Table 3 and are exclusive
of value added taxes (“VAT”), other taxes, working capital and pre-production costs.
Table 3: Caucharí-Olaroz – Construction Capital Costs
Category
25,000 TPA DFS
($ millions)(2)
40,000 TPA DFS(1)(2)
($ millions)
Lithium carbonate plant $122 $155
Evaporation ponds $129 $146
Infrastructure $68 $96
Wells and piping $15 $61
Indirect Cost $37 $67
Contingency $55 $39
Total Construction Capital Costs $425 $565
1. Total capital costs of $565 million include $105 million of sunk capital costs as of June 30, 2019. Sunk costs are excluded from
financial analysis in the DFS.
2. Totals do not add due to rounding.
The sustaining capital requirement is estimated at an average of $7.2 million per year (approximately $180/t
Li2CO3 produced).
Project Economics
The financial results are derived from inputs based on an annual production schedule included in the 40,000
tpa DFS as of June 30, 2019. The analysis contained in the DFS exclude $105 million in sunk capital costs
as of June 30, 2019 which are included in the total construction cost estimate of $565 million.
A Li2CO3 price of $8,000/t and $10,000/t is assumed for 2021 and 2022, respectively, to reflect short-term
market conditions. A production ramp up schedule of 15,250 t and 36,000 t was assumed in 2021 and 2022,
respectively. Caucharí-Olaroz is expected to achieve a production rate of 40,000 tpa of Li2CO3 before the
end of 2022 with production of 40,000 tpa in 2023 to 2060.
Sensitivity analysis on the unlevered economic results for the 40,000 tpa of Li2CO3 over a 40-year operating
period are summarized in Tables 4 and 5 and reported on a 100% equity project basis.
Table 4: Caucharí-Olaroz - After-Tax NPV Sensitivity Analysis
Discount Rate Low Case NPV(1) Base Case NPV(1) High Case NPV(1)
(%) $10,000/t Li2CO3
($ millions)
$12,000/t Li2CO3
($ millions)
$14,000/t Li2CO3
($ millions)
6% $1,803 $2,446 $3,075
8% $1,297 $1,781 $2,252
10% $953 $1,330 $1,693
1. Total capital costs of $565 million include $105 million in capital costs sunk as of June 30, 2019 excluded from NPV. Refers to a
non-IFRS financial measure. Please see the discussion included at the end of this press release under “Non-IFRS Financial
Measures”.
Table 5: Caucharí-Olaroz - EBITDA Sensitivity Analysis
Lithium Carbonate Price
($/t Li2CO3)
Average EBITDA(1)
($ millions)
$10,000 $235
$12,000 $307
$14,000 $379
1. Refers to a non-IFRS financial measure. Please see the discussion included at the end of this press release under “Non-IFRS
Financial Measures”.
Mineral Reserve Estimation
Montgomery & Associates Inc. ("Montgomery") was engaged to update the Mineral Reserves in brine for
various areas within the Salar de Caucharí and Salar de Olaroz in accordance with the guidelines for lithium
brines set forth by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM 2012). The authors of
the DFS believe the Mineral Reserve Estimate has been conservatively modeled and represents a Proven
Reserve for Year 1 through 5 of full-scale extraction wellfield pumping and a Probable Reserve for Years 6
to 40 of full-scale extraction wellfield pumping.
Mineral Reserves for Caucharí -Olaroz have an effective date of May 7, 2019. Mineral Reserves are
summarized in Table 6 and are reported on a 100% project equity basis.
Table 6: Caucharí-Olaroz - Mineral Reserves
Without Processing
Efficiency
Assuming 53.7% Processing
Efficiency
Category
Time
Period
(years)
Average
Lithium
Grade
(mg/L)
Brine
(m³)
Lithium
Metal
(tonnes)
LCE
(tonnes)
Lithium
Metal
(tonnes)
LCE
(tonnes)
Proven 1 - 5 616 1.6 x 107 96,650 514,450 51,900 276,250
Probable 6 - 40 606 9.6 x 108 586,270 3,120,590 314,830 1,675,770
Total 40 607 1.1 x 109 682,920 3,635,040 366,730 1,952,020
Notes:
1. The Mineral Reserve Estimate has an effective date of May 7, 2019.
2. LCE is calculated using mass of LCE = 5.322785 multiplied by the mass of Lithium Metal.
3. The values in the columns for “Lithium Metal” and “LCE” above are expressed as total contained metals.
4. The Production Period is inclusive of the start of the model simulation (Year 1).
5. The average lithium concentration is weighted by per well simulated extraction rates.
6. Tonnage is rounded to the nearest 10.
7. Comparisons of values may not be equivalent due to rounding of numbers and the differences caused by use of averaging
methods.
Mineral Resource Estimation
Since the effective date of the previous Mineral Resource Estimate (February 13, 2019), the results of
deeper drilling and sampling has allowed for partial conversion of the Inferred Resource aquifer volume in
the updated hydrostratigraphic unit (“HSU”) model to Measured and Indicated Resource aquifer volume of
the deeper HSUs. The Updated Mineral Resource Estimate at the Measured, Indicated, and Inferred
Mineral Resource classification (CIM, 2014) for lithium is based on the total amount of lithium in brine that
is theoretically drainable from the bulk aquifer volume.
Mineral Resources for Caucharí-Olaroz have an effective date of May 7, 2019. Mineral Resources are
summarized in Table 7 and are reported on a 100% project equity basis.
Table 7: Caucharí-Olaroz - Mineral Resources
Category
Average
Lithium
Grade (mg/L) Brine (m³)
Lithium Metal
(tonnes)
LCE
(tonnes)
Measured 591 1.1 x 109 667,800 3,554,700
Indicated 592 5.2 x 109 3,061,900 16,298,000
Measured & Indicated 592 6.3 x 109 3,729,700 19,852,700
Inferred 592 1.5 x 109 887,300 4,722,700
Notes:
1. The Mineral Resource Estimate has an effective date of May 7, 2019 and is expressed relative to the Resource Evaluation Area
and a lithium grade cut-off of greater than or equal to 300 mg/L.
2. LCE is calculated using mass of LCE = 5.322785 multiplied by the mass of Lithium Metal.
3. The Mineral Resource Estimate is not a Mineral Reserve Estimate and does not have demonstrated economic viability. There is
no certainty that all or any part of the Mineral Resources will be converted to Mineral Reserves.
4. Calculated brine volumes only include Measured, Indicated, and Inferred Mineral Resource volumes above cut-off grade.
5. The Mineral Resource Estimate has been classified in accordance with CIM Mineral Resource definitions and best practice
guidelines (2012 and 2014).
6. Comparisons of values may not add due to rounding of numbers and the differences caused by use of averaging methods.
Environmental Responsibility & Social Benefits
Environmental Responsibility
Minera Exar is focused on developing Caucharí-Olaroz to be among the most environmentally responsible
lithium projects globally. The process’ principal source of energy is designed to be solar evaporation
resulting in a low overall carbon footprint. Furthermore, process water requirements are low relative to other
lithium carbonate production processes, and process water will be sourced from aquifers that that do not
meet comply with drinking water standards. Minera Exar’s objective is to continue to explore ways to further
reduce the Project’s environmental footprint and produce the most environmentally responsible lithium
possible.
Economic & Social Benefits
The DFS highlights substantial employment and economic benefits to Minera Exar’s employees, the local
communities, and the provincial and federal governments. The P roject is providing many jobs during
construction and development and is expected to provide new long- term opportunities as the Project
continues to grow.
Economic benefits and expanded of Caucharí-Olaroz Project include (based on 40,000 tpa DFS and
$12,000/t Li2CO3 long-term):
• Increase in federal and provincial taxes – total of $4.2 billion for life of mine (or $114 million per year)
• Increase in royalty and mining duty payments
• Increase in employment taxes
• Extending the current employment opportunities with over 700 Minera Exar employees and contractors
• Extending the relationships with the local communities with at least a 40 year project life
Liquidity
As of June 30, 2019, $460 million of the $565 million total construction capital costs was remaining. A
further $100 million in expected taxes and refundable VAT is required prior to production. Minera Exar
expects to fund the remaining costs to production with capital contributions and loans from Lithium Americas
and Ganfeng Lithium and $195 million in capital on Minera Exar’s balance sheet which include the net
proceeds from the $160 million Project investment by Ganfeng Lithium. Lithium Americas 50% share of all
additional funding required up to the start of production, including working capital, is expec ted to be fully -
funded with $221 million in available credit and loan facilities.
Timeline
The Caucharí-Olaroz construction timetable is targeted to follow:
• Q1 2018 – Construction commenced on first evaporation ponds
• Q4 2018 – Began filling first evaporation pond with brine
• Q2 2019 – Commenced civil works and building erection for lithium carbonate plant
• Q4 2019 – Process equipment arrival to site commences
• Q2 2020 – Complete pond construction & liming process at the ponds commences
• Q3 2020 – Complete production wellfield
• Q4 2020 – Lithium carbonate plant mechanical completion
• Early 2021 - Commissioning and first production
• 2022 – Full 40,000 tpa production rate achieved
Report Filing
The Company plans to file an NI 43- 101 compliant technical report that summarizes the DFS on SEDAR
and on the Company’s website within 45 days.
Qualified Persons
The DFS was prepared in accordance with NI 43‐ 101 standards by Montgomery, Ausenco and ACSI in
conjunction with a team of globally recognized consult ants. The independent qualified persons who lead
the team of consultants are:
• Daniel Weber, PG, a United States professional geoscientist and hydrogeologist with Montgomery, and
is a registered member of the Society for Mining, Metallurgy & Exploration (SME). Mr. Weber is one of
the independent qualified persons signing the DFS.
• Ernie Burga, P.Eng., a Canadian Professional Engineer registered with the Professional Engineers of
Ontario is one of the independent qualified persons signing the DFS for ACSI.
• David Burga, P.Geo., a Canadian Professional Geoscientist registered with the Association of
Professional Geoscientists of Ontario is one of the independent qualified persons signing the DFS for
ACSI.
• Tony Sanford, a registered scientist of the South African Council for Natural Scientific Professions
(SACNASP) is the independent qualified person signing the report for Ausenco Perú S.A.C.
• Wayne Genck, a PhD Chemical Engineer and a member of the American Institute of Chemical
Engineers and the American Chemical Society. Dr. Genck has 40 years’ experience in the United
States and abroad and is an independent qualified person as defined under NI 43 -10 l.
Each of the qualified persons noted above has reviewed and approved the scientific and technical
information in this press release.
Further information about the Project, including a description of the key assumptions, parameters,
description of sampling methods, data verification and QA/QC programs, methods relating to resources
and reserves and factors that may affect those estimates will be contained in the technical report that
summarizes the DFS which will be available on SEDAR and on the Company’s website within 45 days of
the date of this news release.
Conference Call & Webcast
Lithium Americas will host a conference call and live webcast on Tuesday, October 1, 2019 at 9:00 am EST
to discuss the Company’s recent developments and results of the DFS.
The live webcast can be accessed through the following link:
https://event.on24.com/wcc/r/2099232/57153658E393C371DD436A5117EF9F8B
Analysts and investors are also invited to participate and ask questions using the dial -in numbers below:
Toronto: +1 416 764 8659
Vancouver: +1 778 383 7413
North American toll-free: +1 888 664 6392
The conference call and webcast will be available for playback on Lithium Americas’ website.