Business Context and Reporting Period
This Form 20-F is the annual report for Lithium Argentina AG (formerly Lithium Americas (Argentina) Corp.) for the fiscal year ended December 31, 2024. The Company is a Swiss-domiciled resource company focused on lithium projects in Argentina. Key operational milestones in 2024 included achieving commercial production at the Cauchari-Olaroz operation in October 2024 and completing a transaction where Ganfeng Lithium acquired a 14.9% interest in the Pastos Grandes project subsidiary for $70 million. On January 23, 2025, the Company completed a corporate continuation from British Columbia, Canada, to Zug, Switzerland.
Key Financial Metrics
- Revenue: The Company acted as an agent for lithium carbonate sales in 2024, purchasing and simultaneously selling approximately $94.8 million of product. Due to the agency nature of these transactions, there was no net revenue impact on the statement of comprehensive loss.
- Net Loss: The Company reported a net loss attributable to shareholders of $15.2 million for the year ended December 31, 2024. This compares to a net income of $1.29 billion in 2023, which was driven by a one-time gain on the distribution of assets during the Separation Transaction.
- Cash Flow: Net cash used in operating activities was $21.8 million. Net cash used in investing activities was $85.9 million, primarily due to loans advanced to Exar Capital and Minera Exar. Net cash provided by financing activities was $68.8 million, largely from the Pastos Grandes transaction proceeds.
- Liquidity: Cash and cash equivalents totaled $85.5 million as of December 31, 2024. The Company holds an undrawn limited recourse loan facility of $75 million with Ganfeng.
- Debt: The Company has $208.4 million in equity-settleable convertible notes (classified as current liabilities). Additionally, the Company has advanced loans totaling $448 million (including accrued interest) to its equity investees, Exar Capital and Minera Exar, to fund the Cauchari-Olaroz project.
- Production: Cauchari-Olaroz produced approximately 25,400 tonnes of lithium carbonate in 2024, meeting production guidance.
Material Changes vs. Prior Period
- Profitability Shift: The 2023 net income was anomalously high due to a $1.27 billion gain on the distribution of assets (Thacker Pass project) to shareholders during the Separation Transaction. The 2024 results reflect the standalone operations of the Argentine assets, resulting in a net loss.
- Production Ramp-up: Production at Cauchari-Olaroz increased significantly from 6,000 tonnes in 2023 to 25,400 tonnes in 2024, culminating in the achievement of commercial production status in October 2024.
- Capital Structure: The Company raised $70 million in August 2024 via the Pastos Grandes Transaction, issuing shares to Ganfeng. This reduced the Company's ownership in the Pastos Grandes subsidiary to 85.1% and created a non-controlling interest of $62.7 million.
- Accounting Changes: Following the adoption of amendments to IAS 1, equity-settleable convertible notes were reclassified from non-current to current liabilities as the Company does not have the unconditional right to defer settlement for more than 12 months.
Outlook, Risks, and Management Commentary
- Outlook: Management expects to continue to have negative cash flow from operating activities until profitable commercial production is fully sustained at Cauchari-Olaroz. The Company is focused on ramping up production to full capacity (40,000 tonnes per annum) and advancing the Pastos Grandes project.
- Key Risks:
- Argentina Economic Environment: High inflation (117.8% in 2024), currency devaluation, and foreign exchange controls pose significant risks to cost estimates and the ability to repatriate profits.
- Joint Venture Dynamics: The Company holds a 44.8% interest in Cauchari-Olaroz, co-owned with Ganfeng (46.7%). Disagreements or funding failures by partners could materially impact operations.
- Commodity Prices: Lithium prices have been volatile and decreased significantly in 2023 and 2024. Depressed pricing could adversely affect future revenues and project economics.
- Regulatory and Political: Changes in Argentine government policies, including the new administration under President Milei, could impact tax regimes, royalties, and capital controls.
- Unusual Items: The 2024 financial statements include a $12.5 million gain on the change in fair value of the embedded derivative in the convertible notes. The Company also recognized a $28.2 million share of loss from the Cauchari-Olaroz project, which exceeded the carrying value of the investment in Minera Exar, resulting in the investment being written down to zero.
Investor Verification Checklist
- Verify the recoverability of the $448 million in loans advanced to Exar Capital and Minera Exar, given the project's early commercial production stage and the write-down of the equity investment in Minera Exar.
- Confirm the impact of Argentine foreign exchange controls on the Company's ability to service its USD-denominated debt and repatriate cash flows from operations.
- Review the convertible note terms ($258.8 million principal), specifically the conditions under which holders can force conversion or redemption, and the associated dilution risk.
- Assess the production ramp-up trajectory at Cauchari-Olaroz against the 40,000 tpa design capacity and the associated operating cost estimates ($6,543/tonne).
- Monitor the regional development plan for the Pastos Grandes basin involving Ganfeng, including the potential for Direct Lithium Extraction (DLE) technology implementation.