General Motors to contribute $625M in cash, credit to new JV with Lithium Americas

Lithium Americas (NYSE:LAC) +19.4% pre-market Wednesday after announcing a new investment agreement with General Motors (GM) to establish a joint venture for the construction and operation of Thacker Pass in Nevada.

GM (GM) will acquire a 38% asset-level ownership stake in Thacker Pass for $625M in total cash and letters of credit, including $430M of direct cash funding to the JV to support the construction of Phase 1 and a $195M letter of credit facility that can be used as collateral to support reserve account requirements under the DoE Loan.

GM (GM) also will enter into an additional 20-year offtake agreement for up to 38% of production volumes from Thacker Pass Phase 2 and will retain its right of first offer on the remaining balance of Phase 2 volumes.

Lithium Americas (LAC) said the JV transaction replaces the $330M Tranche 2 common equity investment commitment from GM (GM) under its original investment agreement announced in January.