Lithium Argentina forms joint venture with Ganfeng for Argentina brine projects

ZUG, Switzerland - Lithium Argentina AG (TSX:LAR) (NYSE:LAR), whose stock has surged over 35% in the past week and maintains a market capitalization of approximately $594 million, announced Tuesday it has signed a framework agreement with Ganfeng Lithium Group to create a joint venture combining three contiguous lithium brine projects in Salta, Argentina. According to InvestingPro data, the company’s shares are currently trading near overbought levels after a remarkable 55% gain over the past year.

Under the agreement, Ganfeng will hold 67% and Lithium Argentina 33% of the new venture, which will consolidate Ganfeng’s Pozuelos-Pastos Grandes project with Lithium Argentina’s Pastos Grandes project (85% owned) and Sal de la Puna project (65% owned). InvestingPro analysis indicates the company maintains a GOOD financial health score of 2.62, suggesting a solid foundation for this strategic expansion.

The joint venture aims to develop a production capacity of up to 150,000 tonnes per annum of lithium carbonate equivalent in three phases. The operation will utilize a hybrid of direct lithium extraction technology and solar evaporation methods.

A feasibility study is expected to be completed by year-end 2025, with results incorporated into an application under Argentina’s Incentive Regime for Large Investments targeted for submission in the first half of 2026.

As part of the agreement, Ganfeng will provide Lithium Argentina with a six-year, $130 million debt facility at SOFR plus 2.5%. This will give the company capacity to refinance corporate debt. In exchange, Lithium Argentina has agreed to allocate up to 50% of its offtake from the initial development phase to Ganfeng at market prices, capped at 6,000 tonnes per annum.

"This transaction builds on our successful partnership with Ganfeng at Cauchari-Olaroz, Argentina’s largest lithium operation," said Sam Pigott, President and CEO of Lithium Argentina, according to the company’s statement.

The parties have invested approximately $1.8 billion in acquisition and development costs across the combined assets. The joint venture is expected to close by the first quarter of 2026, subject to completion of definitive agreements and regulatory approvals.

The announcement was made in a press release issued by Lithium Argentina. While the company is not currently profitable, InvestingPro analysts project positive earnings this year, potentially boosted by this strategic partnership. For investors seeking deeper insights, InvestingPro offers 13 additional exclusive tips and comprehensive financial metrics for Lithium Argentina.

In other recent news, Lithium Argentina AG has filed a Form 6-K with the United States Securities and Exchange Commission (SEC). This filing, dated May 2025, pertains to foreign private issuers and indicates that the company will continue to file annual reports under Form 20-F. The document also includes the company’s North American mailing address in Vancouver, British Columbia, Canada. Additionally, the filing references exhibits that are incorporated by reference into the company’s Registration Statement on Form S-8, which is related to its stock offering plan. These exhibits include a notice of meeting, proxy materials, information circular, forms of proxy, voting instruction form, and a return card. These developments reflect the company’s ongoing compliance with regulatory requirements and its efforts to maintain transparent communication with its investors.

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