Lithium Argentina Q1 2025 slides: production ramp-up continues amid price pressures

Introduction & Market Context

Lithium Argentina (NYSE:LAR) presented its corporate overview on May 15, 2025, highlighting operational progress at its flagship Cauchari-Olaroz project amid challenging market conditions for lithium producers. The company’s shares fell 6.05% to $2.81 on the day of the presentation, continuing to trade near the lower end of its 52-week range of $2.48-$6.90, reflecting broader market concerns about lithium prices despite the company’s operational improvements.

The presentation comes as global lithium markets continue to face downward price pressure, with the company noting a significant -$2,100/tonne adjustment from December 2023 prices to current market levels. Despite these headwinds, Lithium Argentina maintained its production guidance and emphasized its growth strategy through partnerships and technological innovation.

Quarterly Performance Highlights

Lithium Argentina reported production of 7,200 tonnes of lithium carbonate equivalent (LCE) in Q1 2025, generating revenue of $58 million with an average sales price of $8,085 per tonne. This represents a slight price improvement from Q4 2024’s $7,800 per tonne, though production volumes decreased from the previous quarter’s 9,398 tonnes.

The company maintained relatively stable cash costs at $6,634 per tonne in Q1 2025 compared to $6,630 in Q4 2024, but the challenging price environment continues to pressure margins. Operating rates reached 85% capacity in April 2025, suggesting potential for stronger performance in the second quarter.

As shown in the following production progression chart, Lithium Argentina has demonstrated consistent output growth since early 2024, building toward its full-year 2025 guidance of 30,000-35,000 tonnes:

The financial results reveal the challenging balance between production ramp-up and market conditions, with cost of sales at $54 million against $58 million in revenue for Q1 2025:

Growth Strategy & Partnerships

Central to Lithium Argentina’s long-term vision is an ambitious growth pipeline targeting over 200,000 tonnes per annum (tpa) of production capacity. The strategy leverages the company’s partnership with Ganfeng Lithium (HK:1772), with whom it recently executed a Letter of Intent to jointly develop regional projects targeting 150,000 tpa capacity.

The company’s growth roadmap shows a clear progression from current operations to expanded capacity through phased development:

These expansion plans are built on a strong resource base across multiple assets in Argentina. The company’s portfolio includes its flagship Cauchari-Olaroz operation (Stages 1 and 2) along with development projects at Pastos Grandes and Sal de la Puna:

Strategic partnerships remain fundamental to Lithium Argentina’s development approach. The ownership structure across key assets demonstrates the importance of its relationship with Ganfeng Lithium and local partner JEMSE:

Innovation & Sustainability Initiatives

Lithium Argentina is advancing technological innovation through a 5,000 tpa demonstration plant that received permits in Q1 2025. The facility will showcase new extraction technologies developed with Ganfeng using solvent extraction-based direct lithium extraction (DLE) methods, which the company claims will increase efficiency while maintaining the benefits of solar evaporation.

The company also highlighted its sustainability achievements in its May 2025 ESG report. Key metrics include a 59% reduction in lost time injury frequency rate (LTIFR) in 2024 and a 53% reduction in carbon footprint at Cauchari-Olaroz compared to 2023. Additionally, 29% of employees come from neighboring communities, with 47% from Jujuy Province overall.

Forward-Looking Statements

Looking ahead, Lithium Argentina outlined four key priorities for 2025 and beyond: maintaining cost discipline in a challenging market environment, continuing operational execution with stronger performance expected in the second half of 2025, progressing growth plans and strategic initiatives, and strengthening its financial position.

The company also highlighted Argentina’s improving investment climate through the RIGI (Large Investments’ Incentive Regime), which provides benefits including accelerated depreciation, VAT amendments, and foreign exchange market access that could support the company’s expansion plans.

While Lithium Argentina presents an optimistic outlook for production growth and technological advancement, investors appear cautious given current market conditions and the company’s stock performance. The success of the company’s ambitious growth strategy will depend on its ability to control costs while navigating volatile lithium markets and executing on its expansion projects with Ganfeng.

Full presentation:

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