LAC - Lithium Americas reports smaller loss board OK's split into two companies
2023-05-16 11:57:39 ET
Lithium Americas ( NYSE: LAC ) +4.4% in Tuesday's trading after reporting a smaller than expected Q1 GAAP loss and its board approved the separation of the company's North American and Argentina units into two independent public companies; shareholders will vote on the split at the July 31 annual meeting.
Q1 net loss totaled $6.4M, or $0.04/share, down from a loss of $46.1M, or $0.35/share, in the year-earlier quarter, with the smaller loss due mostly to gain on change in fair value of the GM agreements derivative liability.
The Argentina-focused lithium company, Lithium Argentina, would ramp up the Cauchari-Olaroz project construction decision and advance the Pastos Grandes project to a construction decision, while the North America-focused lithium company, Lithium Americas, would focus on construction and production of Thacker Pass Phase 2 in Nevada.
Lithium Argentina head John Kanellitsas said recently that the decision to split the company came down to U.S.-China relations , as Lithium Americas ( LAC ) needed to cut ties with Chinese producer Ganfeng Lithium to build the Thacker Pass mine.
"What makes it problematic, optics wise - and optics matter - is when the beneficial owners of those Department of Energy funds are Chinese shareholders,” Kanellitsas reportedly said.
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Lithium Americas reports smaller loss, board OK's split into two companies