New investment deal with GM Lithium Americas (LAC.US) soars 21% ahead of market

The Zhitong Finance App learned that the pre-market stock price of Lithium Americas (LAC.US) rose 21.72% after announcing a new investment agreement with General Motors (GM.US). Under the agreement, the two parties will establish a joint venture to be jointly responsible for the construction and operation of the Thacker Pass lithium mine in Nevada. GM will invest $625 million, including $430 million in cash and $195 million in letter of credit financing, to acquire 38% asset-level ownership of the project and support the first phase of construction. In addition, GM also signed a 20-year underwriting agreement, promising to purchase up to 38% of the production volume of the second phase of the Thacker Pass, and has priority purchasing rights for the remaining production. The joint venture transaction replaced GM's previous commitment of $330 million in common stock investment under the original investment agreement announced in January.

It is understood that the partnership between Lithium Americas and GM marks further investment by automakers in the electric vehicle supply chain to ensure a stable supply of critical battery materials. GM's investments include direct cash injections and letter of credit financing, which will provide the necessary financial support for the Thacker Pass project, while letter of credit financing can be used as collateral to meet the reserve account requirements for Department of Energy loans. The establishment of this joint venture not only brought financial and credit support to Lithium Americas, but also provided a strong partner for its long-term development in the lithium ore market.

Additionally, GM has secured a future supply of lithium resources through an underwriting agreement, which is critical to its electric vehicle production plans. This long-term agreement not only covers the production volume of the first phase, but also covers most of the production in the second phase, while retaining priority purchasing rights for the remaining production, thus ensuring GM's demand for lithium resources for many years to come.

The conclusion of this joint venture deal also means that GM will no longer invest 330 million US dollars in common stock in accordance with the original investment agreement announced in January. This transformation shows the adjustment of the cooperation model between the two sides to participate more directly in the investment and operation of the project, thereby promoting project progress and resource development more effectively. The conclusion of this strategic partnership not only brought capital and market confidence to Lithium Americas, but also secured the supply of key raw materials for GM in the global electric vehicle competition.