Definitive Capital Estimate Targets H2/26; Thacker Pass Construction On Track

Research evidence excerpt

Definitive Capital Estimate Targets H2/26; Thacker Pass Construction On Track

able, or at an acceptable cost.

Environmental Risk – Risks assessed include water and waste recycle rates, electricity and

energy from renewables, emissions and energy intensity, scope 1 & 2 & 3 emissions, greenhouse

emission targets, reclamation and tailings targets, environmental incident counts and

environmental certifications, and preventative practices and monitoring.

Social Risk – Both national and local community support are critical to successfully building

and operating a mine. Some of the key elements to assess include workplace safety metrics,

community investment, economic value generated and distributed, procurement from local

vendors, percentage of costs spent with local suppliers and good stewardship of the local

environment.

Risks To The Price Target

Lithium Pricing. Lithium pricing continues to be rather opaque as spot prices quoted from

around the world, notably in China, as well as recently added futures pricing, are not entirely

indicative of actual realized pricing of lithium producers. Lithium spot prices have been

exceptionally volatile over the last several years. Prices increased 4-5x in 2021 and 1-2x in 2022,

peaking at around $80,000/tonne in late 2022, and have since precipitously declined. In the

November 2022 DFS for Thacker Pass, the economic model for the project, was based on long-

term lithium carbonate pricing of $24,000/tonne. The company has all of Thacker Pass’s Phase

I volumes under offtake agreements linked to market pricing. If prices were to remain low due

to a destructive supply/demand environment, Lithium Americas could receive lower LCE pricing

and face additional headwinds in Thacker Pass development, particularly for Phase II.

Execution.