Deterra Royalties (ASX:DRR) announced that Lithium Americas (NYSE/TSX: LAC) has closed a US$2.26 billion loan from the U.S Department of Energy’s (DOE) Loan Programs Office under the Advanced Technology Vehicles Manufacturing Loan Program to fund construction of the Thacker Pass lithium project in Nevada, US.
LAC is the project operator of North America’s largest lithium deposit – the Thacker Pass lithium project in Nevada, US.
The loan in conjunction with the recently announced US$625 million investment agreement with General Motors (NYSE: GM) would see phase one of Thacker Pass largely funded.
Deterra holds a 4.8% gross revenue royalty over Thacker Pass (reducing to 1.05% gross revenue royalty, after expected exercise of a partial royalty buyback, which would see US$13.2 million paid to Deterra).
HIGHLIGHTS
- The DOE Loan will help finance the construction of Thacker Pass, targeted to produce an initial 40,000 tonnes per year of battery-quality lithium carbonate (“Phase 1”)
- The DOE Loan will be supplemented by the US$625 million investment agreement with General Motors (NYSE: GM) to establish a joint venture for the purpose of funding, developing, constructing and operating Thacker Pass
- General Motors will acquire a 38% asset-level ownership stake in Thacker Pass for US$625 million in total cash and letters of credit
- LAC is targeting to make the final investment decision and issue full notice to proceed by the end of the year
Deterra MD and CEO, Julian Andrews said:
“We are delighted with today’s update regarding Thacker Pass.
“The completion of the U.S. DOE Loan is a substantial derisking event which, when coupled with the JV Agreement with General Motors, will see capex for Phase 1 largely secured.
“Royalties over multi-billion-dollar development projects in Tier 1 jurisdictions are rare. We believe the support of General Motors and the U.S. Department of Energy highlights the strategic importance of Thacker Pass in meeting growing domestic requirements in the U.S., and we look forward to further updates as Lithium Americas advances toward becoming North America’s largest lithium operator.”
