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LAC Lithium Americas

Filed: 7 May 21, 4:29pm

 

Exhibit 99.1

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 (Expressed in US Dollars)

 

 


 

 

LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)

(Expressed in thousands of US dollars)

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

Note

 

2021

 

 

2020

 

 

 

 

 

$

 

 

$

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

4

 

 

514,205

 

 

 

148,070

 

Receivables, prepaids and deposits

 

 

 

 

2,850

 

 

 

1,250

 

Deferred financing costs

 

 

 

 

972

 

 

 

1,094

 

 

 

 

 

 

518,027

 

 

 

150,414

 

Assets held for sale

 

 

 

 

-

 

 

 

3,926

 

 

 

 

 

 

518,027

 

 

 

154,340

 

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

Restricted cash

 

 

 

 

-

 

 

 

150

 

Loans to Exar Capital

 

5

 

 

43,822

 

 

 

34,562

 

Investment in Cauchari-Olaroz project

 

5

 

 

139,475

 

 

 

131,394

 

Property, plant and equipment

 

6

 

 

1,802

 

 

 

1,935

 

Exploration and evaluation assets

 

 

 

 

4,762

 

 

 

4,342

 

 

 

 

 

 

189,861

 

 

 

172,383

 

TOTAL ASSETS

 

 

 

 

707,888

 

 

 

326,723

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

 

 

3,727

 

 

 

5,204

 

Current portion of long-term liabilities

 

7

 

 

1,510

 

 

 

3,550

 

 

 

 

 

 

5,237

 

 

 

8,754

 

LONG-TERM LIABILITIES

 

 

 

 

 

 

 

 

 

 

Credit and loan facilities

 

7

 

 

134,961

 

 

 

121,221

 

Decommissioning provision

 

 

 

 

326

 

 

 

326

 

Other liabilities

 

7

 

 

5,509

 

 

 

5,719

 

 

 

 

 

 

140,796

 

 

 

127,266

 

TOTAL LIABILITIES

 

 

 

 

146,033

 

 

 

136,020

 

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

 

 

686,333

 

 

 

307,152

 

Contributed surplus

 

 

 

 

29,104

 

 

 

27,204

 

Accumulated other comprehensive loss

 

 

 

 

(3,487

)

 

 

(3,487

)

Deficit

 

 

 

 

(150,095

)

 

 

(140,166

)

TOTAL SHAREHOLDERS’ EQUITY

 

 

 

 

561,855

 

 

 

190,703

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

707,888

 

 

 

326,723

 

 

 

Subsequent events (Note 15)

Approved for issuance on May 5, 2021

On behalf of the Board of Directors:

“Fabiana Chubbs”

 

“George Ireland”

Director

 

Director

 

2

 

 


 

 

LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Unaudited)

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

 

 

 

 

 

Three Months Ended March 31,

 

 

 

Note

 

2021

 

 

2020

 

 

 

 

 

$

 

 

$

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

Exploration expenditures

 

11

 

 

(4,682

)

 

 

(5,405

)

General and administrative

 

10

 

 

(2,293

)

 

 

(2,089

)

Equity compensation

 

8

 

 

(1,284

)

 

 

(2,818

)

Share of loss of Cauchari-Olaroz project

 

 

 

 

(500

)

 

 

-

 

 

 

 

 

 

(8,759

)

 

 

(10,312

)

OTHER ITEMS

 

 

 

 

 

 

 

 

 

 

Transaction costs

 

 

 

 

(43

)

 

 

(646

)

Foreign exchange gain/ (loss)

 

 

 

 

114

 

 

 

(2,371

)

Finance costs

 

 

 

 

(2,496

)

 

 

-

 

Finance and other income

 

 

 

 

1,147

 

 

 

131

 

 

 

 

 

 

(1,278

)

 

 

(2,886

)

NET LOSS BEFORE TAX

 

 

 

 

(10,037

)

 

 

(13,198

)

Tax expense

 

 

 

 

-

 

 

 

(450

)

NET LOSS BEFORE DISCONTINUED OPERATIONS

 

 

 

 

(10,037

)

 

 

(13,648

)

 

 

 

 

 

 

 

 

 

 

 

INCOME/(LOSS) FROM DISCONTINUED OPERATIONS

 

 

 

 

108

 

 

 

(368

)

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

 

 

(9,929

)

 

 

(14,016

)

 

 

 

 

 

 

 

 

 

 

 

OTHER COMPREHENSIVE (LOSS)/INCOME

 

 

 

 

 

 

 

 

 

 

ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO NET (LOSS)/INCOME

 

 

 

 

 

 

 

 

 

 

Unrealized income on translation to reporting currency

 

 

 

 

-

 

 

 

2,180

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL COMPREHENSIVE LOSS

 

 

 

 

(9,929

)

 

 

(11,836

)

BASIC AND DILUTED LOSS PER SHARE FROM CONTINUING OPERATIONS

 

 

 

 

(0.09

)

 

 

(0.15

)

BASIC AND DILUTED LOSS PER SHARE

 

 

 

 

(0.09

)

 

 

(0.16

)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-

BASIC AND DILUTED

 

 

 

 

115,109

 

 

 

89,912

 

 

 

 

 

3

 

 


 

 

LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(Expressed in thousands of US dollars and shares in thousands)

 

 

 

Share capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number

 

 

Amount

 

 

Contributed

surplus

 

 

Accumulated

other

comprehensive

income/(loss)

 

 

Deficit

 

 

Shareholders’

equity

 

 

 

of Shares

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Authorized share capital:

  Unlimited common shares without par value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance December 31, 2019

 

 

89,843

 

 

 

200,913

 

 

 

28,404

 

 

 

(3,867

)

 

 

(65,829

)

 

 

159,621

 

Shares issued on conversion of RSUs and exercise of stock options

 

 

161

 

 

 

244

 

 

 

(199

)

 

 

-

 

 

 

-

 

 

 

45

 

Equity compensation (Note 8)

 

 

-

 

 

 

-

 

 

 

2,751

 

 

 

-

 

 

 

-

 

 

 

2,751

 

DSUs issued in lieu of directors' fees

 

 

-

 

 

 

-

 

 

 

123

 

 

 

-

 

 

 

-

 

 

 

123

 

Credit to equity as a result of the Project Investment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(14,016

)

 

 

(14,016

)

Other comprehensive income

 

 

-

 

 

-

 

 

 

-

 

 

 

2,180

 

 

 

-

 

 

 

2,180

 

Balance March 31, 2020

 

 

90,004

 

 

 

201,157

 

 

 

31,079

 

 

 

(1,687

)

 

 

(79,845

)

 

 

150,704

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020

 

 

101,103

 

 

 

307,152

 

 

 

27,204

 

 

 

(3,487

)

 

 

(140,166

)

 

 

190,703

 

Shares issued on conversion of RSUs, DSUs and exercise of stock options

 

 

579

 

 

 

1,790

 

 

 

(1,084

)

 

 

-

 

 

 

-

 

 

 

706

 

Shares issued pursuant to the underwritten public offering (Note 8)

 

 

18,182

 

 

 

400,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

400,000

 

Shares issuance costs (Note 8)

 

 

 

 

 

 

(22,609

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,609

)

Equity compensation (Note 8)

 

 

-

 

 

 

-

 

 

 

2,903

 

 

 

-

 

 

 

-

 

 

 

2,903

 

DSUs issued in lieu of directors' fees

 

 

-

 

 

 

-

 

 

 

81

 

 

 

-

 

 

 

-

 

 

 

81

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9,929

)

 

 

(9,929

)

Balance March 31, 2021

 

 

119,864

 

 

 

686,333

 

 

 

29,104

 

 

 

(3,487

)

 

 

(150,095

)

 

 

561,855

 

 

4

 

 


 

 

LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Expressed in thousands of US dollars)

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

 

 

$

 

 

$

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net loss

 

 

(9,929

)

 

 

(14,016

)

Items not affecting cash and other items:

 

 

 

 

 

 

 

 

Equity compensation

 

 

1,284

 

 

 

2,818

 

Depreciation

 

 

194

 

 

 

189

 

Foreign exchange (gain)/loss

 

 

(114

)

 

 

2,371

 

Share of loss of Cauchari-Olaroz project

 

 

500

 

 

 

-

 

Other items

 

 

(2,720

)

 

 

(2,436

)

Changes in non-cash working capital items:

 

 

 

 

 

 

 

 

(Increase)/decrease in receivables, prepaids and deposits

 

 

(1,614

)

 

 

107

 

Decrease in inventories

 

 

-

 

 

 

(189

)

(Decrease)/increase in accounts payable and accrued liabilities

 

 

983

 

 

 

2,942

 

Net cash used in operating activities

 

 

(11,416

)

 

 

(8,214

)

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Loans to Exar Capital (Note 5)

 

 

(16,170

)

 

 

-

 

Contribution to Investment in Cauchari-Olaroz project

 

 

(1,067

)

 

 

-

 

Proceeds from sale of assets held for sale

 

 

4,034

 

 

 

-

 

Additions to exploration and evaluation assets

 

 

(420

)

 

 

-

 

Release of restricted cash

 

 

150

 

 

 

-

 

Additions to property, plant and equipment

 

 

(61

)

 

 

(27,665

)

Net cash used in investing activities

 

 

(13,534

)

 

 

(27,665

)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from stock option exercises

 

 

706

 

 

 

45

 

Proceeds from the underwritten public offering (Note 8)

 

 

400,000

 

 

 

-

 

Equity offering issuance costs (Note 8)

 

 

(22,609

)

 

-

 

Drawdowns from the credit facilities (Note 7)

 

 

13,370

 

 

 

34,200

 

Finance lease repayments

 

 

(72

)

 

 

(65

)

Repayment of long-term borrowings

 

 

(424

)

 

 

(35

)

Other (Note 7)

 

 

-

 

 

 

500

 

Net cash provided by financing activities

 

 

390,971

 

 

 

34,645

 

EFFECT OF FOREIGN EXCHANGE ON CASH

 

 

114

 

 

 

(258

)

CHANGE IN CASH AND CASH EQUIVALENTS

 

 

366,135

 

 

 

(1,492

)

CASH AND CASH EQUIVALENTS - BEGINNING OF THE PERIOD

 

 

148,070

 

 

 

83,614

 

CASH AND CASH EQUIVALENTS - END OF THE PERIOD

 

 

514,205

 

 

 

82,122

 

 

Supplemental disclosure with respect to cash flows (Note 13).

 

 

 

5

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

1.

NATURE OF OPERATIONS

 

Lithium Americas Corp. (“Lithium Americas” or the “Company”) is a Canadian-based resource company focused on the advancement of two significant lithium projects: the Cauchari-Olaroz project (“Cauchari-Olaroz”), located in Jujuy Province of Argentina, and the Thacker Pass project (“Thacker Pass”), located in north-western Nevada, USA.  Cauchari-Olaroz is a lithium brine project and is owned by a legal entity in Argentina, Minera Exar S.A. (“Minera Exar”). Minera Exar is owned by the Company (49%) and Ganfeng Lithium Co. Ltd. (“Ganfeng”) (51%) and accounted for by the Company using the equity method. Thacker Pass is a sedimentary-based lithium property located in the McDermitt Caldera in Humboldt County, Nevada, and is 100% owned by the Company’s wholly owned subsidiary, Lithium Nevada Corp. (“Lithium Nevada”).

The Company’s common shares are listed on the Toronto Stock Exchange and the New York Stock Exchange under the symbol “LAC”.

The Company’s head office and principal address is Suite 300, 900 West Hastings Street, Vancouver, British Columbia, Canada, V6C 1E5.

 

To date, the Company has not generated significant revenues from operations and has relied on equity and other financings to fund operations. The underlying values of exploration and evaluation assets, property, plant and equipment and the investment in Cauchari-Olaroz project are dependent on the existence of economically recoverable reserves, securing and maintaining title and beneficial interest in the properties, and the ability of the Company to obtain the necessary financing to complete permitting, development, and to attain future profitable operations.

 

 

2.

BASIS OF PREPARATION AND PRESENTATION

 

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) applicable to the preparation of interim financial statements, including International Accounting Standard (“IAS”) 34, Interim Financial Reporting. These condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2020, which have been prepared in accordance with IFRS.

These condensed consolidated interim financial statements are expressed in US dollars, the Company’s presentation currency, and have been prepared on a historical cost basis. The Company has used the same accounting policies and methods of computation as in the consolidated financial statements for the year ended December 31, 2020.

 

 

 


 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

3.

SIGNIFICANT ACCOUNTING POLICIES

Critical Accounting Estimates and Judgments

The preparation of these condensed consolidated interim financial statements in conformity with IFRS applicable to the preparation of interim financial statements requires judgments, estimates, and assumptions that affect the amounts reported. Those estimates and assumptions concerning the future may differ from actual results. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The significant estimates and judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty are substantially the same as those that management applied to the consolidated financial statements for the year ended December 31, 2020 other than the judgment around functional currency as described below.

COVID-19 Uncertainty

In March 2020, the World Health Organization declared a global pandemic related to COVID-19. Many countries, including Canada, the United States and Argentina, where the Company operates, announced mandatory emergency measures and restrictions on businesses and individuals to mitigate the spread of the virus. The outbreak and the related mitigation measures have had and will continue to have an adverse impact on global economic conditions as well as on the Company’s activities. The effects of the pandemic will ultimately depend on many factors that are out of the Company’s control, including but not limited to, the severity, extent and duration of the pandemic or any resurgences in the future, the availability of approved vaccines and the timing for completion of vaccine distribution programs around the globe.

In Q1 2021 construction activities at the Caucharí-Olaroz lithium project advanced while strictly complying with COVID-19 protocol, as developed by Minera Exar and approved by authorities in Jujuy province where the project is located. Construction costs related to the Caucharí-Olaroz lithium project continue to be capitalized in accordance with the Company’s policy, including costs arising from construction of the project during the pandemic such as testing and quarantining of employees, rental of additional camp facilities in order to comply with distancing requirements, and other additional contractors’ costs as a result of COVID-19 restrictions.

Functional currency

Items included in the financial statements of the Company and each of the Company’s subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). Effective January 1, 2021, the functional currency of Lithium Americas changed from the Canadian dollar to the US dollar as a result of the significant US proceeds from equity offerings and increasing amounts of expenditures denominated in US dollars.   The change in functional currency was accounted for on a prospective basis, with no impact of this change on prior year comparative information.

Newly Adopted Accounting Standards and Amendments

The Company adopted Interest Rate Benchmark Reform - Phase 2: Amendments to IFRS 9, IAS 39, IFRS 4 and IFRS 16 (the "Phase 2 Amendments") effective on January 1, 2021. Interest rate benchmark reform ("Reform") refers to a global reform of interest rate benchmarks, which includes the replacement of some interbank offered rates with alternative benchmark rates.

 

7

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

3.

SIGNIFICANT ACCOUNTING POLICIES (continued)

The Phase 2 Amendments provide a practical expedient requiring the effective interest rate to be adjusted when accounting for changes in the basis for determining the contractual cash flows of financial assets and liabilities that relate directly to the Reform rather than applying modification accounting which might have resulted in a gain or loss. In addition, the Phase 2 Amendments require disclosures to assist users in understanding the effect of the Reform on the Company's financial instruments and risk management strategy. The Company’ senior Credit Facility and Limited Recourse Loan Facility as defined in Note 7 are indexed to London interbank offered rates ("LIBOR") that have not yet transitioned to alternative benchmark rates at the end of the current reporting period.

 

4.

CASH AND CASH EQUIVALENTS

 

 

 

March 31, 2021

 

 

December 31, 2020

 

 

 

$

 

 

$

 

Cash

 

 

47,480

 

 

 

148,070

 

Short-term bank deposits

 

 

466,725

 

 

 

-

 

 

 

 

514,205

 

 

 

148,070

 

As at March 31, 2021, $4,585 of cash and short-term deposits were held in Canadian dollars (2020– $3,165), $509,620 of cash and short-term deposits were held in US dollars (2020– $144,905). Cash and short-term deposits earn interest between 0.25%-1.3%.

 

5.  

INVESTMENT IN CAUCHARI-OLAROZ PROJECT

As at March 31, 2021, the Company and Ganfeng are 49% and 51% shareholders, respectively, in Minera Exar, the company that holds the Cauchari-Olaroz project located in the Jujuy province of Argentina. In addition, the Company and Ganfeng are 49% and 51% shareholders, respectively, in Exar Capital B.V. (“Exar Capital”), the company in the Netherlands that provides financing to Minera Exar for the purpose of advancing the construction of the Cauchari-Olaroz project (the investment in Minera Exar and Exar Capital together, the “Investment in Cauchari-Olaroz project”). Minera Exar and Exar Capital are accounted for using the equity method of accounting. The Company and Ganfeng manage the Cauchari-Olaroz project with a shareholders’ agreement in place regulating key aspects of governance of the project which provides the Company with significant influence over Minera Exar and strong minority shareholder protective rights.

2020 Cauchari Transaction

On August 27, 2020, the Company closed a transaction with Ganfeng whereby Ganfeng subscribed, through a wholly-owned subsidiary, for newly issued shares of Minera Exar, for cash consideration of $16,327, increasing its interest in the Cauchari-Olaroz project from 50% to 51%, with Lithium Americas holding the remaining 49% interest.


 

8

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

5.

INVESTMENT IN CAUCHARI-OLAROZ PROJECT (continued)

In addition, the Company and Ganfeng restructured Exar Capital to reflect the parties’ 51%/49% proportionate ownership of Minera Exar. As part of this restructuring, Ganfeng provided $40,000 to Exar Capital in non-interest-bearing loans, repayable in 2029 (with a right for an additional one-year extension by the Company or Ganfeng) and contributed $689 to Exar Capital’s equity to increase its interest from 37.5% to 51%. Proceeds of the loans from Ganfeng were used by Exar Capital to repay $40,000 of loans owed to Lithium Americas (the Minera Exar and Exar Capital transactions together, the “2020 Cauchari Transaction”).

Upon closing of the 2020 Cauchari Transaction, Ganfeng became the controlling shareholder of Minera Exar and Exar Capital while Lithium Americas received fulsome minority shareholder protective rights. The Company retains a 49% interest and significant influence over Minera Exar and Exar Capital and as a result, is equity accounting for these investments from closing of the 2020 Cauchari Transaction.

Loans to Minera Exar and Exar Capital B.V.

The Company has entered into the following loan agreements with Minera Exar and Exar Capital to fund construction of the Cauchari-Olaroz project. Changes in the loans’ balances are summarized below:

 

 

 

$

 

Loans from the Company to Exar Capital, as at December 31, 2019

 

 

37,959

 

Loans from the Company to Exar Capital at face value

 

 

14,500

 

Initial difference between the face value and the fair value of loans to Exar Capital

 

 

(7,746

)

Elimination of loans as a result of Joint Operation accounting

 

 

(3,377

)

Accrued interest

 

 

3,337

 

Loans from the Company to Exar Capital prior to the 2020 Cauchari Transaction

 

 

44,673

 

Loans from the Company to Exar Capital after the 2020 Cauchari Transaction at face value

 

 

14,700

 

Initial difference between the face value and the fair value of loans to Exar Capital

 

 

(7,265

)

Reversal of elimination of loans as a result of the 2020 Cauchari Transaction

 

 

28,132

 

Derecognition of share of loans from Exar Capital to Minera Exar as a result of the 2020 Cauchari Transaction

 

 

(26,368

)

Repayment of loans as a result of the 2020 Cauchari Transaction

 

 

(40,000

)

Gain on early repayment of the $40,000 loans

 

 

19,608

 

Accrued interest

 

 

1,082

 

Loans from the Company to Exar Capital, as at December 31, 2020

 

 

34,562

 

Loans from the Company to Exar Capital at face value

 

 

16,170

 

Initial difference between the face value and the fair value of loans to Exar Capital

 

 

(7,974

)

Accrued interest

 

 

1,064

 

Loans from the Company to Exar Capital, as at March 31, 2021

 

 

43,822

 

 

Loans by the Company and Ganfeng to Exar Capital are non-interest bearing.

 

During the three months ended March 31, 2021, the Company provided $16,170 and Ganfeng provided $16,830 non-interest bearing loans to Exar Capital to fund their respective 49% and 51% shares of the Cauchari-Olaroz construction costs. The Company accounts for loans initially at fair value and subsequently at amortized cost.

 

The fair value of the loans at inception was calculated using a discounted cash flow valuation method applying market interest rates. The difference between the face value and the fair value of the loans provided was recognized as part of Investment in Cauchari-Olaroz project.

 

9

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

5.

INVESTMENT IN CAUCHARI-OLAROZ PROJECT (continued)

Investment in Cauchari-Olaroz Project

 

Changes in the Investment in Cauchari-Olaroz Project are summarized below:

 

 

 

Minera Exar

S.A.

 

 

Exar Capital

B.V.

 

 

Total

 

 

 

$

 

 

$

 

 

$

 

Investment in Joint Venture, as at December 31, 2019

 

 

-

 

 

 

-

 

 

 

-

 

Recognition of Investment in Cauchari-Olaroz project

 

 

119,537

 

 

 

2,287

 

 

 

121,824

 

Contribution to Investment in Cauchari-Olaroz project

 

 

853

 

 

 

7,265

 

 

 

8,118

 

Share of income of Cauchari-Olaroz project

 

 

2,113

 

 

 

4,200

 

 

 

6,313

 

Elimination of unrealized gain on intercompany transactions

 

 

-

 

 

 

(4,861

)

 

 

(4,861

)

Investment in Cauchari-Olaroz project, as at December 31, 2020

 

 

122,503

 

 

 

8,891

 

 

 

131,394

 

Contribution to Investment in Cauchari-Olaroz project

 

 

855

 

 

 

7,974

 

 

 

8,829

 

Share of income of Cauchari-Olaroz project

 

 

-

 

 

 

3,523

 

 

 

3,523

 

Elimination of unrealized gain on intercompany transactions

 

 

-

 

 

 

(4,271

)

 

 

(4,271

)

Investment in Cauchari-Olaroz project, as at March 31, 2021

 

 

123,358

 

 

 

16,117

 

 

 

139,475

 

 

Minera Exar’s Commitments and Contingencies

 

As at March 31, 2021, Minera Exar has the following commitments (Company’s 49% share):

 

Annual royalty of $98 due in May of every year and expiring in 2041.

 

Aboriginal programs agreements with seven communities located in the Cauchari-Olaroz project area have terms from five to thirty years. The annual fees due are $127 in 2021, $172 in 2022 and $218 between 2023 and 2061, assuming that these agreements will be extended for the life of the project. The annual fees are subject to change. Minera Exar’s obligations to make the payments are subject to continued development of the project and commencement and continuation of production operations on the project.

 

Commitments related to contracts for construction of evaporation ponds and other construction contracts of $3,473.

Los Boros Option Agreement

On September 11, 2018, Minera Exar exercised a purchase option agreement (“Option Agreement”) with Grupo Minero Los Boros (“Los Boros”), entered into on March 28, 2016, for the transfer of title to Minera Exar of certain mining properties that comprised a portion of the Cauchari-Olaroz project.

Under the terms of the Option Agreement, Minera Exar paid $100 upon signing and exercised the purchase option for total consideration of $12,000 to be paid in sixty quarterly installments of $200. The first installment becomes due upon the earlier occurrence of the following two conditions: (i) the third anniversary of the purchase option exercise date, being September 11, 2021; or (ii) the beginning of commercial exploitation with a minimum production of 20,000 tons of lithium carbonate equivalent. As security for the transfer of title of the mining properties, Los Boros granted to Minera Exar a mortgage over those mining properties for $12,000. In accordance with the Option Agreement, on November 27, 2018, Minera Exar paid Los Boros a $300 royalty which was due within 10 days of the start date of construction of the commercial plant.

 

10

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

5.

INVESTMENT IN CAUCHARI-OLAROZ PROJECT (continued)

Pursuant to the Option Agreement, a 3% net profit interest royalty (the “Los Boros Royalty”) is payable to Los Boros by Minera Exar annually within 10 business days after calendar year end, in Argentinian pesos, for a period of 40 years.

Minera Exar has the right to cancel the first 20 years of the Los Boros Royalty in exchange for a one-time payment of $7,000 and the next 20 years for an additional payment of $7,000.  

JEMSE Arrangement

In 2012, to comply with Province of Jujuy regulations regarding government participation in mineral projects, Minera Exar entered into a letter of intent with and granted a conditional right to Jujuy Energia y Mineria Sociedad del Estado (“JEMSE”), a mining investment company owned by the government of Jujuy Province in Argentina, to acquire an 8.5% equity interest in Minera Exar (the “Acquisition Right”) for consideration of one US dollar and the provision of management services as required to develop the project.

Upon closing of the 2020 Cauchari Transaction, Minera Exar and JEMSE entered into a definitive agreement, which allows JEMSE to exercise its Acquisition Right and, among other items, provides for the reimbursement by JEMSE of its 8.5% pro rata share of the construction costs for the Cauchari-Olaroz project to the Company and Ganfeng through the assignment of one-third of the dividends otherwise payable to JEMSE in future periods.

The annual distribution of dividends by Minera Exar to all shareholders including JEMSE, will only be considered once all of Minera Exar’s annual commitments related to the project’s debt have been met.

On April 4, 2021, JEMSE exercised its Acquisition Right (Note 15).

 

6.

PROPERTY, PLANT AND EQUIPMENT

 

 

 

Cauchari-Olaroz1

 

 

Equipment

and machinery

 

 

Other2

 

 

Total

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2019

 

 

158,309

 

 

 

951

 

 

 

1,889

 

 

 

161,149

 

Additions

 

 

59,853

 

 

 

247

 

 

 

283

 

 

 

60,383

 

Capitalization of interest

 

 

5,132

 

 

 

-

 

 

 

-

 

 

 

5,132

 

Deconsolidation

 

 

(223,294

)

 

 

-

 

 

 

-

 

 

 

(223,294

)

Disposals

 

 

-

 

 

 

-

 

 

 

(83

)

 

 

(83

)

Foreign exchange

 

 

-

 

 

 

-

 

 

 

19

 

 

 

19

 

As at December 31, 2020

 

 

-

 

 

 

1,198

 

 

 

2,108

 

 

 

3,306

 

Additions

 

 

-

 

 

 

17

 

 

 

47

 

 

 

64

 

Foreign exchange

 

 

-

 

 

 

-

 

 

 

(3

)

 

 

(3

)

As at March 31, 2021

 

 

-

 

 

 

1,215

 

 

 

2,152

 

 

 

3,367

 

 

11

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

6.

PROPERTY, PLANT AND EQUIPMENT (continued)

 

 

 

Cauchari-Olaroz1

 

 

Equipment

and machinery

 

 

Other2

 

 

Total

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Accumulated depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2019

 

 

1,455

 

 

 

197

 

 

 

573

 

 

 

2,225

 

Depreciation for the period

 

 

279

 

 

 

274

 

 

 

380

 

 

 

933

 

Deconsolidation of Minera Exar fixed assets

 

 

(1,734

)

 

 

-

 

 

 

-

 

 

 

(1,734

)

Disposals

 

 

-

 

 

 

-

 

 

 

(53

)

 

 

(53

)

As at December 31, 2020

 

 

-

 

 

 

471

 

 

 

900

 

 

 

1,371

 

Depreciation for the period

 

 

-

 

 

 

82

 

 

 

112

 

 

 

194

 

As at March 31, 2021

 

 

-

 

 

 

553

 

 

 

1,012

 

 

 

1,565

 

 

 

 

Cauchari-Olaroz1

 

 

Equipment

and machinery

 

 

Other2

 

 

Total

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Net book value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at December 31, 2020

 

 

-

 

 

 

727

 

 

 

1,208

 

 

 

1,935

 

As at March 31, 2021

 

 

-

 

 

 

662

 

 

 

1,140

 

 

 

1,802

 

1 Prior to closing the 2020 Cauchari Transaction, this includes the Company’s 50% share of the Cauchari-Olaroz project construction costs and project-related costs incurred directly by the Company (Note 5).

2 Other category includes right of use assets with $1,369 cost and $590 accumulated depreciation as at March 31, 2021.

 

 

7.

LONG-TERM BORROWINGS

 

 

 

March 31, 2021

 

 

December 31 2020

 

 

 

$

 

 

$

 

Current portion of long-term borrowings

 

 

 

 

 

 

 

 

Accrued interest

 

 

1,184

 

 

 

3,056

 

Other liabilities

 

 

326

 

 

 

494

 

 

 

 

1,510

 

 

 

3,550

 

Long-term borrowings

 

 

 

 

 

 

 

 

Credit facility (net of financing costs)

 

 

108,374

 

 

 

95,068

 

Limited Recourse Loan Facility

 

 

26,587

 

 

 

26,153

 

Other liabilities

 

 

5,509

 

 

 

5,719

 

 

 

 

140,470

 

 

 

126,940

 

 

 

 

141,980

 

 

 

130,490

 

 

Credit Facility

During the three months ended March 31, 2021, the Company drew $13,370 on its $205,000 senior credit facility, comprised of $8,691 from Ganfeng and $4,679 from BCP Innovation Pte Ltd. (“Bangchak”). The total drawn under the facility as at March 31, 2021, was $109,120. The credit facility has a term of six years from August 8, 2018, 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. Repayments of borrowings made under the credit facility must start on August 8, 2022, being the fourth anniversary of the first drawdown date, in an amount equal to 75% of Minera Exar’s Free Cash Flow (as defined in the credit facility agreement).

As security for the facility, the Company granted to the lenders a first priority security interest in all assets except those that represent its ownership interest in the Cauchari-Olaroz project.


 

12

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

 

7.

LONG-TERM BORROWINGS (continued)

Limited Recourse Loan Facility

In October 2018, Ganfeng provided Lithium Americas with a $100,000 unsecured, limited recourse, subordinated loan facility (the “Limited Recourse Loan Facility”) bearing an interest rate of 6-month LIBOR plus 5.5% (subject to an aggregate maximum interest rate of 10% per annum). The loan facility is repayable in an amount of 50% of Minera Exar’s Free Cash Flows (as defined in the credit facility agreement).

Repayment will start once the Company’s obligations with respect to the repayments of the $205,000 senior credit facility are met. As at March 31, 2021, the Company had drawn $20,000 on the $100,000 Limited Recourse Loan Facility to fund the development expenditures on the Cauchari-Olaroz project and an additional $4,708 to fund the payment of interest under the $205,000 senior credit facility. Accrued interest under the facility, included in long-term liabilities, was $1,880 as at March 31, 2021.

The $205,000 senior credit facility and the Limited Recourse Loan Facility contain operating and reporting covenants, which the Company was in compliance with as at March 31, 2021.

Other Liabilities

Other liabilities consist of lease liabilities and the $4,948 mining contractor liability. During Q2 2019, Lithium Nevada entered into a mining design, consulting and mining operations agreement with a mining contractor for its Thacker Pass project. According to the agreement, Lithium Nevada received $3,500 from the mining contractor in seven consecutive equal quarterly instalments, of which $1,500 was received in 2019 and $2,000 was received in 2020 and included in the mining contractor liability balance. Lithium Nevada will pay a success fee to the mining contractor of $4,650 payable upon achieving commercial mining milestones or repay $3,500 without interest if a final project construction decision is not made by 2024.

The mining contractor has also been providing mining design and consulting services, which are accrued and included in the mining contractor liability and are payable on the earlier of December 31, 2024 or 90 days after the start of production at the Thacker Pass project.

 

8.

SHARE CAPITAL AND EQUITY COMPENSATION

Share Capital

On January 22, 2021, Lithium Americas closed an underwritten public offering of 18,182 shares, including 2,273 shares following the exercise in full by the underwriters of their over-allotment option. The shares were issued at a price of $22.00 per share for gross proceeds to the Company of approximately $400,000 ($377,391 proceeds net of $22,609 costs).

Equity Incentive Plan

Restricted Share Units (in thousands)

During the three months ended March 31, 2021, the Company granted 240 (2020 – 788) RSUs to its employees and consultants. The total estimated fair value of the RSUs was $3,166 (2020 - $2,018) based on the market value of the Company’s shares on the grant date. As at March 31, 2021, there was $1,611 (2020 - $1,198) of total unamortized compensation cost relating to unvested RSUs. During the three months ended March 31, 2021, stock-based compensation expense related to RSUs of $604 was charged to operating expenses (2020 - $2,384).  

 

13

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

8.

SHARE CAPITAL AND EQUITY COMPENSATION (continued)

A summary of changes to the number of outstanding RSUs is as follows:

 

 

 

Number of RSUs

(in 000's)

 

Balance, RSUs outstanding as at December 31, 2019

 

 

2,388

 

Converted into shares

 

 

(886

)

Granted

 

 

810

 

Forfeited

 

 

(22

)

Balance, RSUs outstanding as at December 31, 2020

 

 

2,290

 

Converted into shares

 

 

(44

)

Granted

 

 

240

 

Balance, RSUs outstanding as at March 31, 2021

 

 

2,486

 

Deferred Share Units (in thousands)

During the three months ended March 31, 2021, the Company granted 7 DSUs (2020 – 38) as compensation to independent directors with the total estimated fair value of $81 (2020 – $123).

 

 

 

Number of DSUs

(in 000's)

 

Balance, DSUs outstanding as at December 31, 2019

 

 

228

 

Granted

 

 

121

 

Converted into shares

 

 

(131

)

Balance, DSUs outstanding as at December 31, 2020

 

 

218

 

Granted

 

 

7

 

Balance, DSUs outstanding as at March 31, 2021

 

 

225

 

Stock Options (in thousands)

No stock options were granted by the Company during the three months ended March 31, 2021 and 2020. Stock options outstanding and exercisable as at March 31, 2021 are as follows:

 

Range of Exercise Prices

CDN$

 

Number

outstanding and exercisable

as at March 31, 2021 (in 000's)

 

 

Weighted

Average

Remaining

Contractual

Life (years)

 

 

Weighted

Average

Exercise

Price CDN$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$4.55 - $5.00

 

 

609

 

 

 

1.3

 

 

 

4.90

 

$8.05 - $11.07

 

 

1,103

 

 

 

1.7

 

 

 

8.19

 

 

 

 

1,712

 

 

 

1.6

 

 

 

7.02

 

 

14

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

8.

SHARE CAPITAL AND EQUITY COMPENSATION (continued)

 

A summary of changes to stock options outstanding is as follows:

 

 

 

Number

of Options

(in 000's)

 

 

Weighted Average

Exercise Price,

(CDN$)

 

Balance, stock options outstanding as at  December 31, 2019

 

 

3,731

 

 

 

5.94

 

Exercised

 

 

(1,233

)

 

 

(5.19

)

Expired

 

 

(195

)

 

 

(8.99

)

Balance, stock options outstanding as at December 31, 2020

 

 

2,303

 

 

 

6.05

 

Exercised

 

 

(582

)

 

 

(3.21

)

Expired

 

 

(9

)

 

 

(6.30

)

Balance, stock options outstanding as at March 31, 2021

 

 

1,712

 

 

 

7.02

 

The weighted average share price at the time of exercise of options during the three months ended March 31, 2021 was CDN$20 (2020 – CDN$6.88). During the quarter ended March 31, 2021, 280 (quarter ended March 31, 2020 – 111) options were exercised under the cashless exercise provision of the Company’s stock option plan, resulting in the issuance of 233 (quarter ended March 31, 2020 – 82) shares of the Company.

 

Performance Share Units (“PSUs”) (in thousands)

 

162 PSUs were granted by the Company during the three months ended March 31, 2021 and none in 2020. As at March 31, 2021, there was $3,830 (2020 - $2,900) of total unamortized compensation cost relating to unvested PSUs.  

 

The fair value of the PSUs are estimated on the date of grant using a valuation model based on Monte Carlo simulation with the following assumptions used for the grants made during the period.

 

 

 

January 4,

 

 

 

2021

 

Number of PSUs granted

 

 

162

 

Risk-free interest rate

 

 

0.17%

 

Dividend rate

 

 

0%

 

Annualized volatility

 

 

76.0%

 

Peer Group average volatility

 

 

72.2%

 

Estimated forfeiture rate

 

 

10%

 

Fair value per PSU granted

 

 

19.72

 

Total fair value of PSUs granted, prior to forfeiture rate adjustment

 

 

3,200

 


 

15

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

8.

SHARE CAPITAL AND EQUITY COMPENSATION (continued)

 

During the three months ended March 31, 2021, equity compensation expense related to PSUs of $680 was charged to operating expenses (2020 - $434).

 

A summary of changes to the number of outstanding PSUs is as follows:

 

 

 

Number of PSUs

(in 000's)

 

Balance, PSUs outstanding as at December 31, 2019

 

 

1,010

 

Cancelled

 

 

(11

)

Balance, PSUs outstanding as at  December 31, 2020

 

 

999

 

Granted

 

 

162

 

Balance, PSUs outstanding as at March 31, 2021

 

 

1,161

 

 

9.

RELATED PARTY TRANSACTIONS

Minera Exar, the Company’s equity-accounted investee, has entered into the following transactions with companies controlled by the family of its President, who is also a director of Lithium Americas:

 

-

Los Boros Option Agreement, entered into with Grupo Minero Los Boros on March 28, 2016, for the transfer to Minera Exar of title to certain mining properties that comprised a portion of the Cauchari-Olaroz project (refer to Note 5).

 

-

Construction services contract for Cauchari-Olaroz project with Magna Construcciones S.R.L., the Company’s 49% share of which was $668 paid during the three months ended March 31, 2021.

During the three months ended March 31, 2021, the Company’s 49% share of director’s fees paid by Minera Exar to its President, who is also a director of Lithium Americas, was $9 (2020 - $9).

During the three months ended March 31, 2021, the Company paid $646, of which $300 was paid in cash and $346 in RSUs, to its former President, South American operations, who is also a director of Lithium Americas, in accordance with his employment agreement. Concurrently, the parties entered into a 12-month advisory consulting agreement with a monthly fee of $14 and agreed that no director fees will be paid for the duration of this agreement.

The amounts due to related parties arising from such transactions are unsecured, non-interest bearing and have no specific terms of payment. Transactions with Ganfeng, a related party of the Company by virtue of its position as a shareholder and a lender to the Company, are disclosed in Notes 5, 7 and 15.


 

16

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

9.

RELATED PARTY TRANSACTIONS (continued)

 

Compensation of Key Management

Key management includes the directors of the Company and the executive management team. The remuneration of directors and members of the executive management team was as follows:

 

 

 

March 31, 2021

 

 

March 31, 2020

 

 

 

$

 

 

$

 

Equity compensation

 

 

780

 

 

 

517

 

Salaries, bonuses, benefits and directors' fees included in general and administrative expenses

 

 

444

 

 

 

2,474

 

Salaries, bonuses and benefits included in exploration expenditures

 

 

88

 

 

 

154

 

Salaries and benefits capitalized to Investment in Cauchari-Olaroz project

 

 

421

 

 

 

401

 

 

 

 

1,733

 

 

 

3,546

 

 

 

 

March 31, 2021

 

 

December 31, 2020

 

 

 

$

 

 

$

 

Total due from executive team

 

 

50

 

 

 

-

 

Total due to directors and executive team

 

 

146

 

 

 

1,676

 

 

 

10.

GENERAL AND ADMINISTRATIVE EXPENSES

The following table summarizes the Company’s general and administrative expenses:  

 

 

March 31, 2021

 

March 31, 2020

 

 

$

 

$

 

Salaries, benefits and directors' fees

 

837

 

 

1,315

 

Office and administration

 

782

 

 

292

 

Professional fees

 

562

 

 

335

 

Regulatory and filing fees

 

39

 

 

21

 

Travel

 

1

 

 

19

 

Investor relations

 

15

 

 

56

 

Depreciation

 

57

 

 

51

 

 

 

2,293

 

 

2,089

 

 


 

17

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

11.

EXPLORATION EXPENDITURES

The following table summarizes the Company’s exploration expenditures related to Thacker Pass and other project expenditures:

 

 

 

March 31, 2021

 

 

March 31, 2020

 

 

 

$

 

 

$

 

Engineering

 

 

2,665

 

 

 

3,122

 

Consulting and salaries

 

 

1,252

 

 

 

1,133

 

Permitting and environmental

 

 

427

 

 

 

859

 

Field supplies and other

 

 

193

 

 

 

178

 

Depreciation

 

 

138

 

 

 

104

 

Drilling and geological expenses

 

 

7

 

 

 

9

 

Total exploration expenditures

 

 

4,682

 

 

 

5,405

 

 

 

 

12.

SEGMENTED INFORMATION

The Company operates in three operating segments and three geographical areas. The Thacker Pass project is in the exploration stage and the Cauchari-Olaroz project is in the development stage. From August 16, 2019 to August 27, 2020, the Cauchari-Olaroz project was accounted for as a joint operation. Upon closing of the 2020 Cauchari Transaction, the project is accounted for using the equity method (Note 5). The Organoclay segment, classified as a discontinued operation, was wound up in 2019 and its assets were sold in Q1 2021.

The Company’s reportable segments are summarized in the following tables:

 

 

 

Organoclay

$

 

 

Thacker

Pass

$

 

 

Cauchari-

Olaroz

$

 

 

Corporate

$

 

 

Total

$

 

As at March 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

-

 

 

 

1,087

 

 

 

-

 

 

 

715

 

 

 

1,802

 

Exploration and evaluation assets

 

-

 

 

 

4,762

 

 

-

 

 

-

 

 

 

4,762

 

Total assets

 

-

 

 

 

7,303

 

 

 

139,475

 

 

 

561,110

 

 

 

707,888

 

Total liabilities

 

-

 

 

 

(7,760

)

 

 

-

 

 

 

(138,273

)

 

 

(146,033

)

For three months ended March 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment additions

 

 

 

 

 

 

62

 

 

 

-

 

 

 

2

 

 

 

64

 

Income from discontinued operations

 

 

108

 

 

-

 

 

 

-

 

 

 

-

 

 

 

108

 

Net loss

 

 

108

 

 

 

(5,457

)

 

 

(500

)

 

 

(4,080

)

 

 

(9,929

)

Exploration expenditures

 

-

 

 

 

(4,682

)

 

 

-

 

 

 

-

 

 

 

(4,682

)

Depreciation

 

 

-

 

 

 

(150

)

 

 

-

 

 

 

(44

)

 

 

(194

)

 

18

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

12.

SEGMENTED INFORMATION (continued)

 

 

 

Organoclay

$

 

 

Thacker

Pass

$

 

 

Cauchari-

Olaroz

$

 

 

Corporate

$

 

 

Total

$

 

As at December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

-

 

 

 

1,175

 

 

-

 

 

 

760

 

 

 

1,935

 

Assets held for sale

 

 

3,926

 

 

-

 

 

-

 

 

-

 

 

 

3,926

 

Exploration and evaluation assets

 

-

 

 

 

4,432

 

 

-

 

 

-

 

 

 

4,432

 

Total assets

 

 

4,169

 

 

 

6,437

 

 

 

131,394

 

 

 

184,723

 

 

 

326,723

 

Total liabilities

 

 

(552

)

 

 

(7,000

)

 

 

-

 

 

 

(128,468

)

 

 

(136,020

)

For three months ended March 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment additions

 

 

-

 

 

 

66

 

 

 

28,311

 

 

 

4

 

 

 

28,381

 

Loss from discontinued operations

 

 

(368

)

 

-

 

 

-

 

 

-

 

 

 

(368

)

Net loss

 

 

(368

)

 

 

(6,078

)

 

 

(458

)

 

 

(7,112

)

 

 

(14,016

)

Exploration expenditures

 

-

 

 

 

5,405

 

 

-

 

 

-

 

 

 

5,405

 

Depreciation

 

 

-

 

 

 

111

 

 

 

123

 

 

 

45

 

 

 

279

 

 

The Company’s non-current assets and revenues of the discontinued operation are segmented geographically as follows:

 

 

 

Canada

$

 

 

United States

$

 

 

Argentina

$

 

 

Total

$

 

Non-current assets (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at March 31, 2021

 

 

715

 

 

 

5,850

 

 

 

139,475

 

 

 

146,039

 

As at December 31, 2020

 

 

760

 

 

 

5,517

 

 

 

131,394

 

 

 

137,671

 

Revenue of the discontinued operation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For three months ended March 31, 2021

 

-

 

 

-

 

 

-

 

 

-

 

For three months ended March 31, 2020

 

-

 

 

 

644

 

 

-

 

 

 

644

 

 

1Non-current assets attributed to geographical locations exclude deferred income tax assets and financial and other assets.

 

 

13.

SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

Supplementary disclosure of the Company’s non-cash transactions is provided in the table below.

 

 

 

March 31, 2021

 

 

December 31, 2020

 

 

 

$

 

 

$

 

Accounts payable related to financings

 

 

81

 

 

 

80

 

 

 

 

March 31, 2021

 

 

March 31, 2020

 

 

 

$

 

 

$

 

Interest paid

 

 

3,902

 

 

 

3,460

 

Income taxes paid

 

-

 

 

-

 

 

 


 

19

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

 

14.

FINANCIAL INSTRUMENTS

Financial instruments recorded at fair value on the consolidated statements of financial position and presented in fair value disclosures are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.  The fair value hierarchy has the following levels:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for assets or liabilities, either directly or indirectly; and

Level 3 – Inputs for assets and liabilities that are not based on observable market data.

The fair value hierarchy requires the use of observable market inputs whenever such inputs exist.  A financial instrument is classified in the lowest level of the hierarchy for which a significant input has been considered in measuring fair value. The Company did not have any financial instruments measured at fair value on the statement of financial position. As at March 31, 2021, the fair value of financial instruments not measured at fair value approximate their carrying value.

The Company may be exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives. The Company manages risks to minimize potential losses. The main objective of the Company’s risk management process is to ensure that the risks are properly identified and that the capital base is adequate in relation to those risks.  The principal risks which impact the Company’s financial instruments are described below.

Credit Risk

Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, receivables, and loans to Exar Capital. The Company’s maximum exposure to credit risk for cash, cash equivalents, receivables, and loans to Exar Capital is the amount disclosed in the consolidated statements of financial position. The Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions and invests only in short-term obligations that are guaranteed by the Canadian government or by Canadian and US chartered banks with expected credit losses estimated to be de minimis. The Company and its subsidiaries, including its investee Minera Exar, may from time to time make short-term investments into Argentinian government securities, financial instruments guaranteed by Argentinian banks and other Argentine securities. These investments may or may not realize short term gains or losses.

Management believes that the credit risk concentration with respect to financial instruments included in cash, cash equivalents, receivables and loans to Exar Capital is minimal.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.  The Company’s approach to managing liquidity is to evaluate current and expected liquidity requirements under both normal and stressed conditions to estimate and maintain sufficient reserves of cash and cash equivalents to meet its liquidity requirements in the short and long term. As the industry in which the Company operates is very capital intensive, the majority of the Company’s spending or that of its investees is related to its capital programs. The Company prepares annual budgets, which are regularly monitored and updated as considered necessary.  

 

As at March 31, 2021, the Company had a cash and cash equivalents balance of $514,205 to settle current liabilities of $5,237.

 

20

 

 


LITHIUM AMERICAS CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021

(Expressed in thousands of US dollars, except for per share amounts; shares and equity instruments in thousands)

 

14.

FINANCIAL INSTRUMENTS (continued)

The following table summarizes the contractual maturities of the Company’s financial liabilities on an undiscounted basis:

 

 

 

 

 

 

 

Years ending December 31,

 

 

 

 

 

 

 

2021

 

 

2022

 

 

2023

 

 

2024 and later

 

 

Total

 

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Credit facility¹

 

 

4,269

 

 

 

9,275

 

 

 

9,820

 

 

 

154,466

 

 

 

177,830

 

Accounts payable and accrued liabilities

 

 

3,727

 

 

-

 

 

-

 

 

-

 

 

 

3,727

 

Obligations under office leases¹

 

 

241

 

 

 

238

 

 

 

191

 

 

 

222

 

 

 

892

 

Other obligations¹

 

 

46

 

 

 

25

 

 

 

4

 

 

 

5,026

 

 

 

5,101

 

Total

 

 

8,283

 

 

 

9,538

 

 

 

10,015

 

 

 

159,714

 

 

 

187,550

 

 

¹Credit facility, Obligations under office leases and Other obligations include principal and interest/finance charges.

Market Risk

Market risk incorporates a range of risks.  Movement in risk factors, such as market price risk and currency risk, affect the fair values of financial assets and liabilities. The Company is exposed to a foreign currency risk as disclosed below.  

Foreign Currency Risk

The Company’s operations in foreign countries are subject to currency fluctuations and such fluctuations may affect the Company’s financial results. The Company reports its financial results in United States dollars (“US$”) and incurs expenditures in Canadian dollars (“CDN$”) and US$ with the majority of the expenditures being incurred in US$ by the Company’s subsidiaries and investees. The Company and its subsidiaries and associates have a US$ functional currency. As at March 31, 2021, the Company held $4,584 in CDN$ denominated cash and cash equivalents. Strengthening/(weakening) of a US$ exchange rate versus CDN$ by 10% would have resulted in a foreign exchange (loss)/gain for the Company of $458 at March 31, 2021.

 

 

15.

SUBSEQUENT EVENTS

 

On April 4, 2021, JEMSE exercised its ownership right to an 8.5% interest in Minera Exar. JEMSE will reimburse its $23,496 pro rata (8.5%) share of the equity financing for the construction of the Cauchari-Olaroz project to the Company and Ganfeng through the assignment of one-third of the dividends otherwise payable to JEMSE in future periods.

 

Subsequent to the quarter end, the Company received a $7,350 drawdown from its Credit Facility to fund development expenditures on the Cauchari-Olaroz project.

 

 

 

21