Sociedad Quimica y Minera de Chile SA, or SQM, agreed to sell all of its interest in Minera Exar SA, the holding company for the Caucharí-Olaroz lithium brine project in Argentina, to a Jiangxi Ganfeng Lithium Co. Ltd. unit, according to Aug. 13 statements.

Under the deal, SQM unit SQM Potasio SA will sell its stake in the project to Ganfeng Lithium unit GFL International Co. Ltd. for US$87.5 million in cash, including the repayment of outstanding debt owing from Minera Exar plus a deferred US$50 million in cash, payable upon the project reaching certain production milestones.

Ganfeng Lithium also agreed to provide a loan to Minera Exar, allowing the latter to repay US$25 million of its outstanding debt to Lithium Americas Corp. Ganfeng Lithium also agreed to provide Lithium Americas with a US$100 million subordinated loan facility, which will fully support its CapEx spending obligations for the project's stage-one development.

Following the transaction, Lithium Americas' interest in the project will increase from 50% to 62.5%, and Ganfeng Lithium will hold the remaining 37.5% stake. The companies agreed to collaborate on finding and developing lithium resource projects in the Americas.

Subject to approvals, the deal is expected to close in the fourth quarter. Construction of Caucharí-Olaroz remains on track to begin first production of battery-grade lithium carbonate in 2020. The project owners will team up to find efficiencies in its design.