Lithium Americas Announces US$112 Million Strategic Investment by Bangchak Petroleum
January 19, 2017
Lithium Americas Announces US$112 Million Strategic Investment by Bangchak Petroleum
Vancouver, Canada: Lithium Americas Corp. (TSX: LAC) (OTCQX: LACDF) ("Lithium Americas" or the
"Company") is pleased to announce the investment by The Bangchak Petroleum Public Company Limited
(“Bangchak”) through its wholly-owned subsidiary, BCP Innovation Pte Ltd (“BCPI”). BCPI has signed an
investment agreement (the “Investment Agreement”) with Lithium Americas for funding to advance the
construction of the Cauchari-Olaroz lithium project in Jujuy, Argentina. Pursuant to the Investment
Agreement, BCPI has agreed to financing terms in an aggregate amount of US$112 million in exchange
for increasing its ownership stake to 16.4% of the outstanding common shares of Lithium Americas pro-
forma (the "Private Placement"); the right to buy a fixed portion of the lithium carbonate production from
the Cauchari-Olaroz project (the “Offtake Entitlement”); and a US$80 million project debt facility (the
“Project Debt Facility”).
Transaction Highlights
Private Placement: BCPI has agreed to purchase, by way of a private placement, 50,000,000
common shares at a price of C$0.85 per common share for gross proceeds of C$42.5 million (US$32
million). The Private Placement will be subject to Lithium Americas shareholder approval, with certain
pre-existing Lithium Americas shareholders, including Geologic Resource Partners, LAC
management and directors, and GFL Lithium Co., Ltd. (“Ganfeng”) delivering undertakings to vote in
favour of the deal. Following the close of the Private Placement, BCPI will own approximately 16.4%
of the Company’s issued and outstanding shares;
Project Debt Facility: BCPI and the Company have agreed to terms by which BCPI will provide to
Lithium Americas a US$80 million Project Debt Facility to be used for the funding of Lithium
Americas’ share of Cauchari-Olaroz construction costs. The Project Debt Facility has a term of six
years, with an interest rate of 8.0% for the first three years that increases to 8.5% in year four, 9.0%
in year five and 9.5% in year six;
Offtake Entitlement: BCPI and the Company have agreed to terms for an Offtake Entitlement in
favour of BCPI for the purchase of 15% of Lithium Americas’ share of Cauchari-Olaroz Stage 1
lithium carbonate production at market prices; and
Investor Rights: BCPI will be entitled to one nominee on Lithium Americas’ board of directors and
anti-dilution protection to maintain its proportionate interest in Lithium Americas for a two-year term.
John Kanellitsas, Vice Chairman and President of Lithium Americas, commented: "Upon the completion
of the Ganfeng transaction announced two days ago and this BCPI transaction announced today on
virtually identical terms, Lithium Americas will have raised US$286 million, which we believe will satisfy
the financing requirements for Lithium America’s 50% share of Stage 1 of the Cauchari-Olaroz joint
venture. The terms and size of the debt facilities provide Lithium Americas increased financial flexibility,
limit dilution to existing shareholders, and avoid onerous covenants, prepayment penalties or costs other
than interest on the amount drawn. BCPI has been a committed and supportive shareholder and we very
much welcome this additional investment."
Chaiwat Kovavisarach, President, Chief Executive Officer and Director of Bangchak commented:
“Bangchak is pleased to make this significant investment in Lithium Americas and deepen our partnership
with Lithium Americas. This is a landmark milestone for both Bangchak in extending its green initiative
and Lithium Americas to be a leading lithium producer. We look forward to working with Lithium Americas
management and supporting the construction of the Cauchari-Olaroz joint venture and the development
of Lithium Americas for the benefit of all stakeholders of both Lithium Americas and Bangchak.”
Bangchak is a global emerging leader in the green energy industry. The company is headquartered in
Bangkok and is publicly listed on the Thailand Stock Exchange (ticker: BCP) with a current equity market
capitalization of approximately THB 46.5 billion (US$ 1.3 billion). The company’s core business -
petroleum refining - spans procurement of crude oil from domestic and overseas sources and refining it
into various standard products. The company’s strategy is to grow its green energy business, including
solar power and biofuel production and distribution, and create value for investors in a manner that
enhances national energy security and promotes social and environmental stewardship.
Private Placement
BCPI has agreed to purchase, by way of a private placement, 50,000,000 common shares of the
Company at a price of C$0.85 per common share for gross proceeds of C$42.5 million (US$32 million).
Following the close of Private Placement and the private placement contemplated in the recently
announced transaction with Ganfeng, BCPI will own approximately 16.4% of the Company’s issued and
outstanding common shares. The common shares issued under the Private Placement will be subject to
Lithium Americas shareholder approval and a four month hold period from the closing date. Certain pre-
existing Lithium Americas shareholders, including Geologic Resource Partners (“Geologic”), LAC
management and directors, as well as Ganfeng, will be providing voting support agreements to vote in
favour of the transaction. Geologic and management and directors currently own or control approximately
17% of Lithium America’s common shares outstanding. The proceeds of the Private Placement will be
used to further advance the Company’s Cauchari-Olaroz lithium project and for general corporate and
working capital purposes.
Provided that BCPI holds not less than 15% of the Company, BCPI will also have the following rights:
the right to add a nominee to Lithium Americas’ board of directors; and
anti-dilution rights allowing it to maintain its equity ownership interest in Lithium Americas at 16.4%
until March 31, 2019.
Project Debt Facility
The parties have also agreed to terms by which BCPI will provide Lithium Americas the Project Debt
Facility of up to US$80 million, with security over 30% of Lithium Americas’ interest in the Cauchari-
Olaroz project, which will be used to fund a portion of the Cauchari-Olaroz construction costs.
The Project Debt Facility has a six-year term, and will carry an 8.0% interest rate for the first three years,
8.5% in year four, 9.0% in year five and 9.5% in year six. The facility will become available from the
transaction close date and funds will be released to Lithium Americas in instalments to cover Lithium
Americas’ capital development contributions on the Cauchari-Olaroz project. The terms contemplate that
during project construction and commissioning, there will be no repayments of principal, and Lithium
Americas is entitled to refinance the loan without penalty at any time after the first year. BCPI’s 15%
Offtake Entitlement is conditional on making available all required funding instalments under the Project
Debt Facility.
Offtake Entitlement
As disclosed in Lithium Americas’ press release dated November 3, 2016, Lithium Americas’ and
Sociedad Química y Minera de Chile S.A. (“SQM”) are proceeding with development planning for 50,000
tonnes per annum of lithium carbonate production from the Cauchari-Olaroz project, to be built in two
stages, with initial work modelling a first stage of production of 25,000 tonnes per annum of lithium
carbonate (“Stage I”) on a two-year construction and commissioning timeline. As part of the Investment
Agreement, the parties have agreed to terms of the Offtake Entitlement whereby BCPI has the right to
acquire 15% of Lithium Americas’ share of Stage I production from Cauchari-Olaroz for a period of 20
years following the commencement of commercial production.
Pricing and payment terms of the Offtake Entitlement will be the same as that applicable to SQM for its
purchase of lithium carbonate production from the Cauchari-Olaroz project, which is required to be
equivalent to market prices and terms.
Transaction Details & Timing
The Investment Agreement and the terms of the transactions contemplated thereunder has received
requisite Board approvals. Completion of the transaction remains subject to approval of TSX, completion
of definitive agreements for the Investor Rights, the Offtake Entitlement and Project Debt Facility, closing
of the previously announced equity investment by Ganfeng and other customary closing conditions. As
part of the TSX approval, Lithium Americas also expects that it will need to obtain shareholder approval
for the Private Placement. Closing is expected to occur on or about March 31, 2017.
About Lithium Americas
Lithium Americas, together with its joint venture partner SQM, is developing the Cauchari-Olaroz Lithium
project, located in Jujuy, Argentina, through its 50% interest in Minera Exar S.A. In addition, Lithium
Americas owns 100% of the Lithium Nevada project (formerly Kings Valley project), and RheoMinerals
Inc., a supplier of rheology modifiers for oil-based drilling fluids, coatings, and specialty chemicals.
For further information contact:
Lithium Americas Corp.
Investor Relations
Suite 1100 – 355 Burrard Street
Vancouver, BC, V6C 2G8
Telephone: 778-656-5820
Email: [email protected]
Website: www.lithiumamericas.com
Forward-looking statements
Statements in this release that are forward-looking information are subject to various risks and
uncertainties concerning the specific factors disclosed here and elsewhere in the Company's periodic
filings with Canadian securities regulators. Forward-looking information in this news release includes: (i)
the timing and completion of the Investment Agreement transaction; (ii) the ability of the parties to settle
definitive agreements for the Offtake Entitlement and the Project Debt Facility in accordance with the
terms agreed to in the Investment Agreement; (iii) approval of the Private Placement by the shareholders
of the Company and (iv) timing, completion and results of development studies on the Cauchari-Olaroz
Project. When used in this document, the words such as “intent”, “target”, “expect”, “estimated” and
“scheduled” and similar expressions represent forward-looking information. Information provided in this
document is necessarily summarized and may not contain all available material information.
All such forward-looking information and statements are based on certain assumptions and analyses
made by Lithium Americas management in light of their experience and perception of historical trends,
current conditions and expected future developments, as well as other factors management believes are
appropriate in the circumstances. These statements, however, are subject to a variety of risks and
uncertainties and other factors that could cause actual events or results to differ materially from those
projected in the forward-looking information or statements. Important factors that could cause actual
results to differ from these forward-looking statements include those described under the heading "Risks
Factors" in Lithium Americas’ most recently filed Annual Information Form and other continuous
disclosure filings. The Company does not intend, and expressly disclaims any obligation to, update or
revise the forward-looking information contained in this news release, except as required by
law. Readers are cautioned not to place undue reliance on forward-looking information or statements.