Deterra Royalties (ASX: DRR) notes the strong endorsement from the US government for the Thacker Pass lithium project in Nevada following the announcement from project JV partners Lithium Americas Corp (LAC) and General Motors (GM) of a non-binding agreement in-principle with the US Department of Energy (DOE) to advance the first draw of US$435 million on the previously announced US$2.26 billion DOE loan.
Deterra holds an effective 4.8% gross revenue royalty over Thacker Pass (reducing to an effective 1.05% gross revenue royalty after expected exercise of a partial royalty buyback, which would see US$13.2 million paid to Deterra).
HIGHLIGHTS
- DOE has agreed to defer US$182 million of debt service over the first five years of the DOE Loan.
- The DOE will receive:
- 5% equity stake in LAC through warrants to purchase common shares of LAC, at an exercise price of US$0.01 per share; and
- 5% economic stake in the JV through warrants to purchase non-voting, non-transferable equity interest of the JV with an exercise price of US$0.01 per unit.
- LAC will post an additional US$120 million to DOE Loan reserve accounts, to be funded within 12 months of the DOE advancing First Draw.
- GM will provide additional support to the Project by amending its lithium offtake agreement with the JV to permit the JV to enter into additional third-party offtake agreements for certain remaining production volumes not forecasted to be purchased by GM.
The First Draw terms remain subject to negotiation and completion of definitive agreements, corporate approvals and other customary conditions.
PROJECT HIGHLIGHTS
- Thacker Pass contains the largest measured lithium reserve and resource in the world, with a non-JORC Proven and Probable mineral reserve estimate of 14.3 million tonnes lithium carbonate equivalent (“LCE”) and non-JORC Measured and Indicated mineral resource estimate of 44.5 million tonnes LCE.
- LAC is targeting 160,000 tonnes-per-year of battery-quality lithium carbonate production to be developed in four phases, with Phase 1 targeting LCE production of 40,000 tonnes-per-year.
- Project economics outline an 85-year life of mine and optimized production scenario for years 1-25 with C1 operating costs of US$6,238/tonne LCE, making Thacker Pass one of the lowest-cost expected producers.
Julian Andrews, Managing Director and Chief Executive Officer of Deterra commented:
“This update further demonstrates the support of the U.S. Administration and GM in advancing this world class asset. Construction of Phase 1 is well underway with detailed engineering currently over 70% complete, first steel installation at the processing plant completed in late August 2025 and first occupancy at the workplace hub commenced in September 2025.
As a long-life, low-cost project located in a Tier 1 jurisdiction and with strong government and customer support, Thacker Pass ideally compliments our foundational asset, the world class royalty over BHP’s Mining Area C. We look forward to further updates as Lithium Americas advances toward becoming one of the world’s largest lithium producers.”
