LithiumAmericas Corp., formerly Western Lithium USA Corp. said March 28 that ithas entered into a 50/50 joint venture on the Cauchari-Olaroz lithium project in Argentina,with Sociedad Quimica y Minera deChile SA, or SQM.
The definitive joint venture deal will be effectivefollowing SQM's US$25 million investment in Lithium Americas unit in exchange for a50% ownership stake in the unit. Some US$15 million of the amount will be usedto repay intercompany loans while the remaining US$10 million will be put toproject development.
The partners intend to immediately advance a work andengineering plan targeting to update the Cauchari project's definitivefeasibility study that was completed in 2012. The updated study will evaluate economicfeasibility for a project with a nameplate annual production capacity of about40,000 tonnes of lithium carbonate equivalent.
Lithium Americas CEO Tom Hodgson said, "One of theprincipal objectives of the joint venture is to leverage the technicalexperience of SQM to materially de-risk the development of Cauchari-Olaroz andto successfully advance the project to bring new supply to the market on atimely basis."
So far, the company has spent more than C$80 million on aresource exploration and project development program which included resourcedefinition, advanced modeling, approximately 10,000 meters of drilling, testingand pumping wells and 43-101 technical studies, including a definitivefeasibility study on the project.
The Cauchari project feasibility study — which was based ona production capacity of 20,000 tonnes per annum of lithium carbonate —calculated a posttax net present value of US$464 million with average annualnet cash flows of US$117 million, assuming forecast average prices of aboutUS$5,900.