Earnings call transcript: Lithium Americas Q3 2025 sees EPS miss, stock rises

Lithium Americas (LAR) reported a significant earnings per share (EPS) miss for Q3 2025, with an actual EPS of -0.4 compared to the forecast of -0.0102. Despite this, the company’s stock price rose by 2.19%, closing at $5.47, reflecting investor optimism about future prospects and strategic initiatives.

Key Takeaways

• Lithium Americas missed EPS expectations by a wide margin.
• Stock price increased by 2.19% despite the earnings miss.
• Strong demand in the lithium market for EVs and energy storage.
• Secured a new $130 million debt facility, boosting financial stability.
• Record production levels achieved in October.

Company Performance

Lithium Americas experienced slight production variability in Q3 2025, producing 200 tons less than in Q2. However, the company achieved 90% capacity utilization in three of the last four months. The company’s strategic partnership with Ganfeng and its significant resource base position it as a leading player in the lithium market, despite facing increased cash costs.

Financial Highlights

• Revenue forecast: $54.38 million
• Earnings per share: -0.4 (missed forecast by a significant margin)
• Cash costs increased to $6,300 per ton

Earnings vs. Forecast

Lithium Americas reported an EPS of -0.4, significantly below the forecasted -0.0102, resulting in an EPS surprise of 3821.57%. This substantial miss highlights potential operational challenges or market pressures affecting the company’s financial performance.

Market Reaction

Despite the earnings miss, the stock price rose by 2.19% to $5.47. This increase suggests investor confidence in the company’s long-term strategy and market position. The stock remains closer to its 52-week low, indicating potential for future growth.

Outlook & Guidance

The company is targeting battery-grade product production by 2026-2027 and exploring third-party capital for project financing. With a strong demand forecast in the lithium market, particularly for EVs and energy storage, Lithium Americas is well-positioned for future growth.

Executive Commentary

Sam Pigott, CEO of Lithium Americas, emphasized the sustained demand in the lithium market, stating, "The lithium market continues to evolve, but one constant remains strong sustained demand." Wang Xiaoxin, CEO of Ganfeng Group, highlighted the potential of energy storage to overtake EV demand within the next decade.

Risks and Challenges

• Increased cash costs may impact profitability.
• Production variability could affect output consistency.
• Market saturation and macroeconomic pressures pose potential risks.
• Dependence on strategic partnerships for financial stability.
• Regulatory changes in key markets could affect operations.

Q&A

During the earnings call, analysts focused on the company’s disciplined approach to project development and technology readiness. Questions also addressed the absence of provincial equity stake requirements and market conditions affecting the lithium sector.

Full transcript - Lithium Americas Corp (LAR) Q3 2025:

Conference Operator: Thank you for standing by. My name is JL, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Lithium Argentina Third Quarter twenty twenty five Earnings Call and Scoping Study Results. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.

I would now like to turn the conference over to Kelly O’Brien, Vice President, Investor Relations. You may begin.

Kelly O’Brien, Vice President, Investor Relations, Lithium Argentina: Thank you for the introduction. I want to welcome everyone to our conference call this morning. Joining me on the call today to discuss TPG scoping study and the Q3 results is Sam Pigott, President and CEO of Lithium Argentina. We are also happy to welcome to the call Wang Xiaoxin, Chief Executive Officer of Gunfen Group Carlos Ghali, Vice President of Growth and Innovation at Lithium Argentina and Jason Luopp, President of Ganfeng South America to discuss the Pasuelos Pastos Granges or PPG consolidated project. Alex Shoga, Vice President and CFO of Lithium Argentina will also be available for Q and A.

Before we begin, I would like to cover a few items. Our third quarter twenty twenty five earnings and the PPG scoping study results were press release earlier this morning, and the corresponding documents are available on Lithium Argentina’s website. I remind you that some of the statements made during this call, including any production guidance, expected company performance, update on the PPG development plans, the timing of our projects and market conditions may be considered forward looking statements. Please note the cautionary language about forward looking statements in our presentation, MD and A and news releases. I will now turn the call over to Sam Pigott.

Sam Pigott, President and CEO, Lithium Argentina: Good morning, everyone. We have a lot to discuss today. I will start quickly with third quarter results and want to recognize the incredible work of the global team that continues to collaborate and contribute to the success of the XTRAI Oloraz operation. The third quarter saw continued execution and the impact from our ongoing efforts to optimize our production plan, increase efficiencies in our process and make improvements designed to bring down costs long term. We remain confident in meeting our targets for 2025.

While there is still work to do to complete these optimization efforts, we are very pleased with the plant’s performance, where we are seeing production rates of 90% capacity sustained over extended periods of time. In October, we achieved a new record monthly production volume, reaching close to full capacity. As we look towards 2026, our goal is to continue to sustain higher production levels, while also taking long term actions to best position the business for the years to come. On the balance sheet, we were pleased to announce the new $130,000,000 six year debt facility from Ganfeng. This new facility gives us added flexibility to enhance our debt profile at the corporate level, while preserving shareholder value.

Finally, and what matters most is that the operation continues to perform safely and reliably with a committed team driving continuous improvements. I want to pause on what’s been one of the most important drivers of our progress, the strong performance at Cauchari Olaroz, and that’s our collaborative partnership. Together, Lithium Argentina and Ganfeng have built a highly successful joint venture in Argentina. With just under $1,000,000,000 in capital investment, we have established one of the largest and most efficient new lithium operations globally with a shared goal of supplying lithium chemicals to a diversified global customer base. If you look at the production profile on this slide, you can see the strength of our execution.

Within twelve months, following the completion of the lithium chemical plant, we were able to steadily increase production reaching close to our targeted capacity. That reflects the quality of our resources, team and collaborative partnership with Ganseng. With that, I would like to turn it over to Ganfeng’s CEO, Wang Shao Shen, to provide his perspective on our partnership and shared vision for Argentina.

Wang Xiaoxin, Chief Executive Officer, Ganfeng Group: Thank you, Sam. We are proud of our eight years partnership with Jason Argentina and look forward to growing with PBG. The new joint venture will build on our existing relationship and new technologies to bring low cost growth in Argentina. We continue to expand in Argentina, reflecting our confidence in its high quality resources, experienced local workforces and improved investment framework with Rigi. We expect Kochari Ola Lus to continue to lower costs and use new technologies to grow, while PBG will be one of the largest and the lowest cost lithium operations globally.

We’ve seen an important opportunity for brines where we can apply mature technologies from China to high quality resources in Argentina to reduce costs and minimize environmental impact. Our plan in Argentina is to grow from our existing 60,000 tons of capacity today from Cochari, Ola Luz and Mariana to over 250,000 tons.

Sam Pigott, President and CEO, Lithium Argentina: Following the receipt of the environmental permits at PPG last week and as we begin to prepare our RIGI filings for Stage two and PPG, we expect these growth plans to become a bigger focus for the company. Turning to PPG, we are excited to share the results of our scoping study. The project is located in Salta Province in Northern Argentina and benefits from access to infrastructure, energy and local talent and is located approximately 100 kilometers from Quchari Olaroz. While we agreed to consolidate these three projects in August, the scoping study builds off approximately three years of collaborative partnership with Ganfeng. What makes this project especially compelling is that it combines scale, a proven partnership and technological innovation.

These are essential components for successful project execution. Turning to the details of the PPG scoping study. We reiterate the project scale and economics, which all support PPG becoming one of the most competitive lithium operations globally. The study outlines a Stage one LCE capacity of 50,000 tons per year, expanding to 150,000 tons per year in three phases. Initial capital investment is estimated at $1,100,000,000 and total life of mine capital is estimated at 3,300,000,000.0 These results confirm the benefits of an integrated PPG as a scalable low cost long life operation.

PPG produces a strong after tax NPV of $8,200,000,000 at an 8% discount rate and an IRR of 33% based on a long term price of $18,000 per ton, a level well supported by long term market fundamentals. It’s important to note that even at a very conservative price estimate of $12,000 per ton, close to market prices today, the IRR of the project is still over 20%. The lithium market continues to evolve, but one constant remains strong sustained demand driving the need for new high quality supply. Benchmark estimates that over the next decade, roughly 1,000,000 tons of new LTE capacity will be required to meet global demand. This sustained demand supports long term pricing levels necessary to incentivize new project development.

Based on the current project pipeline, a price of approximately $18,000 per ton of lithium carbonate would be required to achieve a 15% return for this new supply. For PPG, as with Quchari, the combination of attractive capital intensity and low operating costs provides additional flexibility, ensuring that projects remain well positioned across a range of market scenarios. I’ll now turn it over to Xiaoxuan to comment further on market conditions.

Wang Xiaoxin, Chief Executive Officer, Ganfeng Group: At Ganfeng, we see shifts in the lithium market, driven by demand for LFP from ESS. Ganfeng’s battery business is running at full capacity. We think the industry is in the early phases of ESS and believe that this could become as big as or bigger market than the EV market in the future. At Ganfeng, we are well positioned with low cost lithium resources as well as battery production. We are the largest fully vertically integrated lithium producer and as a result has established a long term relationship with leading industry players across the EV battery supply chain, which gives helpful insights and competitive advantage.

We have always taken the long term view of the market. And for this reason, we have been focused on low cost resources in Argentina.

Sam Pigott, President and CEO, Lithium Argentina: Lithium Argentina brings more than two decades of experience in Argentina, advancing projects from exploration through to production. In 2024, the Argentine government implemented the RIGI program to attract long term investment by offering a predictable and competitive fiscal framework. To date, more than $33,000,000,000 in new projects have applied under Riggy, with roughly 40% already approved. For PPG, this framework represents a meaningful value driver, providing competitive incentives and importantly, greater clarity on foreign exchange regulations that are critical to securing lower cost capital. Following the receipt of the Stage one environmental permit last week, we plan to formally submit our rig application for PPG during the 2026.

I’ll now turn it over to Jason Wu, President of Ganfank South America to discuss PPG’s targeted cost profile in more detail.

Jason Wu, President of Ganfeng South America, Ganfeng: Thanks, Sam. Sam’s comments described the competitiveness of PPG. We combine a good buying asset, consisting expertise and experience in Argentina to deliver both low capital intensity and competitive operating cost. On the left, you can see the breakdown of Stage one capital cost. The total investment is about $1,100,000,000 for 50,000 ton operation.

Roughly 41% of that is tied to the process plant, including DLE. Here, we are able to build in modules of 10,000 tons and leverage our supply chain and expertise in China. Next, around 30 goes into wells and evaporation pumps. Here, both Ganfeng and NAR have significant experience building and operating pumps from Mariana in Salta and at the nearby Torjalli, Olaroz. Finally, 22% is for the infrastructure, power, roads and the tailing facilities.

For comparison, stage one at Kocheli Gallo Los was completed for just under $1,000,000,000 So this represents a comparable scale up of an operation with similar brand and the benefits of new processing technologies to reduce the overall size of pumps and processing needs. For all three stages, it’s estimated that the total 150,000 tons will require a total capital investment of approximately $3,300,000,000 faced over several years. On the operating cost structure, PPG is expected to be similar to where Calcari Allalos is today at around $5,000 per ton. We continue to look for ways to optimize and lower this cost further by leveraging synergies with our existing operations in Argentina, processing efficiencies and scale. What’s important here is that those numbers aren’t just competitive.

They are based on proving operating experience, new technology, optimized funds to plan, integrate integration and efficient reagent use. All this keeps both capital and operating cost competitive. We are maintaining flexibility across different lithium price environment. Carlos Garten, VP of Growth and Innovation from Nissan Argentina, will now discuss the PPG resource.

Carlos Ghali, Vice President of Growth and Innovation, Lithium Argentina: Thank you, Jason. What makes PPG truly unique is it’s part of a connected system spread from two adjacent basins, Pozuelos and Pato Grande, each with similar geology, hydrology, and brine chemistry. By combining them, we created a single project with both grade and scale. Over the past three years, our teams have completed one of the most comprehensive exploration programs in the Puna region of Argentina. This combines with experience from previous owners and collaboration with GAMSAN.

We have been able to take advantage of different work and methodologies, including that of the oil and gas industry, which is different from typical mining approach to Salaz, and our studies incorporate these sophisticated and modern techniques. From this data, we now understand how these two systems evolved and why they complement each other so well. Pato Grande is a large deep basin that formed around 3,000,000 ago with substantial and real potential depth and along its margins, while Pozuelos, on the other hand, is shallower and wider Salar, which has led to higher lithium grades and good brine availability. Together, these two systems host an exceptionally large and well defined resource, over 15,000,000 tons of measured and indicated LC resources, an additional 6,700,000 inferred tons. Along with these works done to explore the lithium resources, Lithium Argentinian Gamping has deployed significant efforts to gain a unique understanding of the water system in the basin using innovative and sophisticated methodologies and techniques.

This also brings confidence to the possibility of developing in a sustainable way a large scale production system. The key takeaway here is that PPG stands on its own as a remarkably strong geological foundation. This level of technical confidence combined with basin control positions us to move rapidly and ultimately to derisk product execution during development. This chart really puts the scale of the combined PPG project into perspective. It compares the major lithium brine resources by basins across South America, and you can see how Cauquel De La Rose and now PPG, both compare here in green, firmly position our JV projects among the largest brine resources globally.

It is also one of the few basins that has been largely consolidated. This kind of scale and brand chemistry is what underpins the strong project economics, including low operating costs and low CapEx and long term growth potential that was highlighted earlier by Jason. It’s what enables us to plan for meaningful stage development with significant expansion potential over time. It is also worth emphasizing that while Pozuelos and Pato Grande appear as morphologically separate basins, our upstream geological work has shown that they are remarkably similar geological histories and branch chemistry. Both were shared by the said tectonic and hydrological processes, meaning that they effectively evolved as part of a single connected geological system.

The shared origin is what makes combining the three projects across these two Salars into one integrated development such a logical and value driven step, maximizing capital efficiency, enhancing scalability and derisking development on a basin wide scale. We continue to focus on innovation and process improvement, building on the success of Cauciel de la Ross, while incorporating new technologies for further improving efficiency and sustainability. The new hybrid technology that we are advancing for PPG as well as for Cauchari Stage two removes the requirement for several processing components that are currently used at Stage one operation. The new design maintains the core advantage of solar evaporation, but it integrates lithium solvent extraction technology to enhance recoveries, reduce water and energy use and simplify the downstream processing needs. The process as PPG will eliminate several intermediate steps from the Cauchera de Arras flowsheet, including liming and post liming pumps and multiple purification stages.

Instead, it introduces a series of closed loop solvent tanks where lithium is selectively extracted and purified in a more controlled environment. This approach utilizes new BLE technology developed by Ganfeng in China that has been tested on our brands. While this processing technology for Argentina, they are mature for China and integrate well given our specific brand characteristics and hybrid approach leveraging benefits of our abundant solar radiation. In short, the proposed hybrid DLE process combines the proven benefits of evaporation where it works best with more extraction techniques, improving efficiency, reducing environmental impact, and positioning PPG as a next generation lithium operation.

Jason Wu, President of Ganfeng South America, Ganfeng: Over the course of three distinct phases, we expect DPG to become one of the largest Nissan operations globally. We are taking a disciplined stage approach, starting with 50,000 pounds per year in phase one and ultimately expanding to one fifty thousand tons of lithium carbonate equivalent as phase two and three come online. Each phase will build on the next, capitalizing on the synergies of the Salar’s and original projects to achieve significant scale with a target of lowering unit cost and optimizing capital efficiency. The processing plant for all three phases is designed to be built at hospitals, leveraging shared infrastructure. The first phase will use brine from hospitals, which is slightly higher grade and advanced in terms of both production wells and permitting.

The following phases will bring in concentrated brine from the larger as a groundless resource as well as water necessary to support our larger scale plants. Together, by consolidating and integrating these three projects, this provides significant synergies and allow us to optimize for much larger and efficient production scale. As we transition towards execution, our focus is on maintaining a disciplined task towards construction, leveraging our learning from Kajaleoa North and Mariana. We are very pleased to have received environmental approval for stage one of PPG on Friday. This is a critical milestone that will require a rigorous fourteen months review and proves that the PPG project meets the highest environmental and social standards required in Argentina.

We engaged early with provincial regulators in Salta and communities in PPG, ensuring that our studies and designs and new technology meet or accept both Argentina and international standards. All of those steps put us in a strong position to be able to start stage one construction in the 2026 and allows allow us to achieve first production before 2030.

Sam Pigott, President and CEO, Lithium Argentina: Thanks, Jason. As we wrap up, we’re excited to begin sharing more details and increasing our focus on long term growth. This does not change our near term priorities, disciplined execution at stage one and prudent management of our balance sheet. But as we advance our RIGI filings, we see this as a critical step in outlining Lithium Argentina and Ganseng’s shared vision and long term value proposition in Argentina. On PPG, with the receipt of environmental approvals, we will now work closely to further optimize our plans, derisk our execution strategy and finalize an updated hydrogeological model, integrating resources across both basins.

In parallel, Lithium Argentina and Ganfeng are advancing a coordinated financing strategy designed to support the next phase of growth. As we move forward, we’ll maintain the same disciplined approach, prioritizing shareholder value, prudent capital allocation and strong alignment between partners. This is a pivotal moment for our company. It marks the beginning of a new chapter of disciplined growth built on this same focus, collaboration and execution that delivered success at Kachari Olaroz.

Conference Operator: Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the Your first question comes from the line of Joel Jackson of BMO Capital Markets. I

Joel Jackson, Analyst, BMO Capital Markets: had a question about PPG. So the capital intensity, $22,000 a ton CapEx is very low. It’s like half the capital intensity when you look at public project estimates out of other projects in Argentina, let’s say Rio Tinto Rincon or stuff in The States. I was wondering why is the capital intensity half the CapEx of other greenfield projects in Zhaoqian? How would you compare the economics of this project, PPG, versus Neriana?

Sam Pigott, President and CEO, Lithium Argentina: Thanks for the question, Joel. Maybe I’ll start and then pass it over to Xiaoxuan. So yes, the CapEx intensity is much lower than recent examples of chemical processing outside of China. I think part of the explanation here is driven by the quality of the resource. So the first phase of Venezuela is benefiting from considerably higher grades, upwards of high five hundred milligrams per liter lithium, so most similar to Kachari Olaroz.

The CapEx also reflects the use of new processing technologies, which Xiaoxuan can elaborate on, including SX based DLE, which is designed and built in modular units, engineered and constructed in China with the support, obviously, of Ganfeng. So this technology is designed to help reduce corn footprint and simplify purification requirements. So I think those are the two major drivers towards the CapEx intensity. But Shaoqian, maybe you can elaborate on that and then also share your experience with Marianne and Kuchari.

Wang Xiaoxin, Chief Executive Officer, Ganfeng Group: Yes. Thank you, Zhen. Yes, you’re right. Actually, if you look at our projects in everywhere in the world, actually, we have a relatively lower CapEx density compared with other Western companies’ projects. So that’s because of the Ganfeng’s.

We have our own in house engineering team, and we have in house process. So that’s probably one of the reasons. And also, we have built two projects in Argentina, which is not easy place. They have lots of challenges, especially you don’t have the existing human resources for these lithium projects in the region. So we are bringing some of the talents from China and together with our local teams successfully to project this.

Joel Jackson, Analyst, BMO Capital Markets: Okay.

Wang Xiaoxin, Chief Executive Officer, Ganfeng Group: Yes. And to your question about comparison between Mariana and the PPG, I would say PPG has higher concentration of the lithium. Mariana has lower, but Mariana has a much higher pumping rate. So each one has their own advantage. And so both both projects are good projects.

Joel Jackson, Analyst, BMO Capital Markets: Okay. And then following up from that, and I would like to share all those as well, I believe at some point in 2026, you’re going to test this hybrid, PON plus DLE system with a small plant at Kosher Olaroz. I think it’s twenty twenty six. And can you talk about as you progress PPG here, will you wait for results on that pilot or demo plant at Castello Rose to learn what it looks like in Argentine brine, before you move out of PPG so you get more refined estimates, for PPG and see how it affects Castello as well?

Wang Xiaoxin, Chief Executive Officer, Ganfeng Group: Yeah. I don’t think we have to wait. We we we don’t need to wait. Yeah. Sorry.

Sorry, Sam. Go ahead, please.

Sam Pigott, President and CEO, Lithium Argentina: No. No. I I was just gonna I was gonna say, you know, the demo plan is obviously a really important derisking step for this new technology being incorporated into our production process, both at Stage two and PPG. But clearly, we expect this to be done in a way that will integrate with the broader construction timeline. But Xueqian, maybe go ahead and you can share on the confidence Ganpeng has in this technology and what’s been done in China.

Wang Xiaoxin, Chief Executive Officer, Ganfeng Group: Yes. We have a commercial project in China using this DLE technologies already, many times test on the PBG brines. So we think PBG brines, we don’t have to wait until the final results from the Cochari projects, the DLE projects. And maybe, Jason, you have anything to add?

Jason Wu, President of Ganfeng South America, Ganfeng: Yes, Justin. Just as you said, these are proven technologies, and so we don’t have to wait for the demonstration time from Kochali. And actually, the this is a hybrid. This is a hybrid process combined with pounds and the so called extraction. So the so called extraction process is proven in China in commercial scale And also, like, it’s, like, more simplified process.

And I will say, like, technically, technically, it’s, like, a even, like, a simpler and straightforward. So yes, we are going to just like a go ahead to like start the construction once like we have the permitting financing and other things ready on Kochari on PPG project.

Joel Jackson, Analyst, BMO Capital Markets: Okay. Thank you. I’ll go back in the queue.

Conference Operator: Your next question comes from the line of Katie Le Chapelle of Canaccord Genuity. Your line is open.

Kelly O’Brien, Vice President, Investor Relations, Lithium Argentina: Hi, all. Thanks for taking

Katie Le Chapelle, Analyst, Canaccord Genuity: my questions. First off, congrats on the release of the scoping study and the environmental approval. I was just wondering if you could provide a more detailed overview of the permitting of the asset, what additional permits, if any, are required? And then maybe with having Jason on the call, I’d love to hear his vision about the progression of the PPG project and how you guys balance priorities going forward in PPG versus Contarion Olaroz Phase two?

Sam Pigott, President and CEO, Lithium Argentina: Thanks, Katie. Maybe I’ll take the second part of that question, then turn it over to Jason to comment on permitting. I think from a sequencing perspective, the fact is both these projects market needs, low cost, being driven forward by a proven operating team in Argentina. And so for both, we’re advancing similar review application timelines, which is the first half of next year. From a development standpoint, we expect these projects to be broadly comparable, each with distinct advantages.

So for PPG, obviously, it’s further ahead. The permit was secured last Friday. And also benefits from very significant historical investments that Gantt Bank’s carried out on wellfields infrastructure and then further benefits from the advantages of Venezuela’s being considerably higher grade. I’d say for XR, we’re obviously also advancing a rig application. We expect to have a development plan similar to that for PPG first half of next year.

And we’ll provide more visibility on the sequencing into 2026. But as a general statement, we’re confident both assets provide meaningful flexibility and optionality to both Lithium Argentina and Ganfeng. The how and the when of this growth is underpinned by responsibility to our shareholders and maximizing shareholder value. So maybe Jason answering the first part of the question, which was related to permitting and what else is required push ahead with the PPG project?

Jason Wu, President of Ganfeng South America, Ganfeng: Yes, Sam. For starting construction of PPG, of course, the most important in Sao Paulo is to obtain the approval of the DIA, which is the environmental permit. As Sam said, we obtained that approval last Friday, and we submit the the DIA application in 09/02/1974. It takes us, like, fourteen months to walk through the technical approval and environmental approval and also the community consultation and the finally public hearing. So fourteen months, you can see it’s like a record, like fast approval procedure and we have achieved compared with other peers in this region.

So we can see this project is technically technically sound and we are like received and supported by the local government and the communities. So looking forward, what else like, what other permits do we need? And actually, we with this, we can start the construction immediately. But there are two more things that important we need to, like, obtain. One is as Sam said, we need, like, to apply for the region, and we are working on that.

We started, like, the communication with the national government already. So the region application will be submitted in q one next year, and we anticipate it will, like, it won’t take long to be approved, maybe a few months, like, by estimation. That is one thing. With that, like, we can start the construction of the project. And one more thing is, like, we are we need, like, also to obtain the water permit.

And so that’s like we are already working on the water balance and we just need like to drill more water wells. And because this so many extraction process will require much less water consumption. So we don’t see the problem. Compared with other process, the water consumption is the lowest. So that’s like a two more things we need for PPG project on the permit side.

Kelly O’Brien, Vice President, Investor Relations, Lithium Argentina: Okay. Great. Very clear, guys. Thank you.

Conference Operator: Your next question comes from the line of Ben Isaacson of Scotiabank. Your line is open.

Ben Isaacson, Analyst, Scotiabank: Thank you very much and good morning. I have a few quick ones, if that’s okay. So the first question is the overall CapEx for PPG is 3,300,000,000.0 for all three phases, exactly one third of that to the first phase. I I would have thought there would be some economies of scale and phase one would be a little more expensive and two and three would be a little lower. Can you just talk about that?

Sam Pigott, President and CEO, Lithium Argentina: Thanks, Ben. Yes, the CapEx for the entire project in each phase represents the benefits of scale, but the brine characteristics do change over time. So the CapEx for Phase one does incorporate infrastructure expenditures that will extend across all three phases. But then go to Phase two and Phase three, which will be sourcing brine from Pasos Grondes, it comes at a lower concentration. And therefore, the number of wells and the size of the ponds increase.

So there is a bit of a trade off there and that explains the. Great, that makes sense. Sorry, second point is on the SX plant itself. This is done in like a modular unit, so you don’t see the same kind of economies of scale you would see in other projects. That’s helpful.

Thanks, Sam, for

Ben Isaacson, Analyst, Scotiabank: that one. Moving on, Kawachari,

Jason Wu, President of Ganfeng South America, Ganfeng: I believe Gemstar has what an

Ben Isaacson, Analyst, Scotiabank: 8.5% interest. What is the likelihood that Salta would somehow require some stake? And is there a negotiation on that? And how should we think about the dilution impact of that?

Sam Pigott, President and CEO, Lithium Argentina: Maybe Jason, if you want to take that one.

Jason Wu, President of Ganfeng South America, Ganfeng: Yes. So, yeah, we know that our province like, no, they have no intention at all to negotiate a stake, and we don’t we didn’t, like, even touch that point, and we didn’t like a we have, like, a a good communication with the provincial government, and we didn’t see the provincial government of SATA wanted to bring that up to any recent projects or, like, mining projects with SATA so far.

Ben Isaacson, Analyst, Scotiabank: Great. And then if I can just switch quickly to q three. So your cash costs were just a touch higher, about 3% higher to about $6,300 Production was a couple of 100 tonnes lower. Can you just talk about was the reason had production been stable, with the cash costs that have been flat, why did the cash costs increase and why did production take a

Jason Wu, President of Ganfeng South America, Ganfeng: little dip down? Thank you.

Sam Pigott, President and CEO, Lithium Argentina: Yes, I mean, two are very much related. So we had slightly lower 200 tons less production than Q2. So that does increase unit cost. So I think from a production standpoint, we’re still making optimization changes. These are small, but from a month to month basis do increase some variability.

I’d say the optimization efforts that we’ve made in Q3 sorry, Q2 have delivered. So three in the last four months, we’ve been operating above 90% capacity. And obviously, when we’re pushing volumes up, we see a kind of relation to cost coming down. So on the

Conference Operator: comp side, yes, slightly higher than

Sam Pigott, President and CEO, Lithium Argentina: Q2 due to largely due to the slightly less volume, but we’re seeing costs continue to trend down. Great. And if I

Ben Isaacson, Analyst, Scotiabank: can just throw one last one in there. Just back to the PPG project. You just talk about, Sam, how do you envision minimizing equity dilution risk for large shareholders in terms of the capital structure and funding your onethree portion of Phase I of PPG? Yes.

Sam Pigott, President and CEO, Lithium Argentina: I would highlight that Lithium Argentina has a pretty strong track record of executing strategic and disciplined financings. And so if look at, for example, how we funded the $1,000,000,000 investment in Stage one, we did this thoughtfully. We leveraged partnerships, offtakes, project level debt to minimize shareholder dilution. We’re certainly going to take the same disciplined approach here as we advance our growth plans. One of the differences today, obviously, is we’re doing so from a much stronger position.

Having successfully brought on Stage one into operation, having Argentina’s rig investment framework, a more mature lithium market, and more specifically at PPG, under our agreement to consolidate these three PPG assets, Ganfeng and LAR have committed to working together to secure third party capital to finance Stage one development costs. And we’ll do this by leveraging Ganfeng’s global customer relations and access to low cost financing. So we’re obviously going to be very responsible in terms of how we do this. We see a tremendous amount of value in the projects that we have and we’ll be very disciplined and careful to ensure that shareholders are rewarded and avoid dilution.

Conference Operator: Your next question comes from the line of Corrine Blanchard of Deutsche Bank. Your line is open.

Corrine Blanchard, Analyst, Deutsche Bank: Hey, good morning. Thank you for taking my question. Sorry if I missed it, but could you talk about what would be the IRR, like the return if you were to be using market price another $18,000 per kilo or per ton? And maybe if you can talk also about the rationale of using the $18,000 given where the market is trading at? Thank you.

Sam Pigott, President and CEO, Lithium Argentina: So yes, the sensitivity is around that. At today’s well, at $12,000 per ton. I think we’re close to that today in the spot market in China. The project would have a 20 over 20% IRR. I think that the rationale for choosing 18% is one, it’s aligned with third party forecasts and street consensus.

And it seems to be a level that would seem to be required to incentivize enough production over the next decade. So it’s a price level at which would result in a 15% IRR for kind of the last marginal project contributing to that 1,000,000 tons. But seeing that we have Shao Shen on the line, maybe I can turn it over to you Shao Shen and just comment on the use of $18,000 per ton as a long term price and how that squares with how you’re seeing the market today and how you’re seeing the lithium market evolving over the next five to ten years. I know it’s a difficult question, but I think you’re pretty well positioned to provide some perspective.

Wang Xiaoxin, Chief Executive Officer, Ganfeng Group: Yes. Thank you, Sam. Yes, I think if you look at it from the demand side and also the supply side, the demand side is still a very strong growth. And not only the EV, but also energy storage. This is where we see probably in the future even bigger than EV demand for lithium.

So that’s one thing from demand side. From supply side, we see lots of uncertainty for those projects on the pipeline. And we know that the lead time for development of those projects takes some quite longer time. I also talked to some of the people from Chile. In Chile, to get environmental permits for new projects, at least it takes five years.

So that’s the reason we think $18,000 is I think is reasonable, is reasonable for long term pricing. Even today, it’s still tough. But if you look at China today, the price has been increased 77% already for the lithium carbonate. So that’s we believe 2018 is reasonable. If you also consider there’s other companies for new projects on the pipeline, in for instance, in Australia and for some other projects in The U.

S. Or Canada. All those projects, we believe that they probably will require much even higher price to incentive them to build those projects. Thank you.

Corrine Blanchard, Analyst, Deutsche Bank: Thank you. Maybe if I can ask a second one just more on the quarter. What about an update on the material quality? So I know that you still have that discount for like purity removal. Can you just talk again what the expectation are in terms of timings to come to like a battery grade here?

Thank you.

Conference Operator: Yes, I mean, this year was about operating stability.

Sam Pigott, President and CEO, Lithium Argentina: So we’re very pleased with what we’re seeing at the plant. There has been some gradual improvement in the quality of the product. And based on the current pricing and reprocessing arrangement we have with Ganseng, the reprocessing costs are quite low. I think longer term looking out to 2627, Ganfeng and LAR are very much aligned in the ability to be able to supply global customers directly. So obviously, would mean that we would need to deliver battery grade product.

So it’s still in the vision. We’re not there yet, but we’re making gradual improvements towards that goal.

Corrine Blanchard, Analyst, Deutsche Bank: Thank you. That’s it for me.

Conference Operator: Your next question comes from the line of David Deckelbaum of TD Cowen. Your line is open.

Kelly O’Brien, Vice President, Investor Relations, Lithium Argentina0: Congrats to everyone. Thanks for taking my questions today. Just curious just with the PPG phase development approach. Looks like every phase is between four and five years apart from each other. Is that flow sheet constrained?

Or is that theoretically market and finance constrained? How are you thinking about the timing of Phases one, two and three? It doesn’t seem like necessarily there’s a change in the assumptions around cadence of bringing projects online post permitting.

Sam Pigott, President and CEO, Lithium Argentina: Thanks for the question. I think it is theoretical and finance constrained. But Jason, feel free to provide your view.

Jason Wu, President of Ganfeng South America, Ganfeng: Yeah. Yeah. Sam, you you made a very good point. And just add a few more is particularly and particularly, we think it’s like it’s like a we have one team that can continue work on one project, finish it, and bring that line and check everything and ramp it up. And then we move to phase two.

That’s, more let’s say, it’s more like a smooth. So that that’s just one thing. Another thing is, like, each phase for each phase, phase two, phase three, we also need, like, to obtain the construction permit, and the the provincial government would like to see we construct the phase one first and then move to phase two and then phase three. Yes. Thank you.

Kelly O’Brien, Vice President, Investor Relations, Lithium Argentina0: Appreciate that. And then Xiaoxuan, if I could ask you a question, you remarked earlier that perhaps you could see that we’re in the early stages of ESS that you think could be larger than the EV market. Could you provide some more color around that? When do you think that the market is going to see this grand inflection on demand for energy storage, particularly on the lithium side? Is that something that you anticipate in the next decade?

Or is that something that you think is going to be more impactful sooner?

Wang Xiaoxin, Chief Executive Officer, Ganfeng Group: Yes, probably will be sooner. But even for the EV, today, people only focus on the passenger cars. But actually, China, not only the passenger cars, but the old kind of transportation now is becoming electrified or going to be electrified in the next several years. If you look at the heavy duty trucks, this year, the electrical heavy duty trucks grows more than 100% compared with the same time last year. So we know and of course, energy storage will have a higher much higher growth rate.

But even for the motors, batteries are also growing. And in China, the next seven years later will be also another new demand for the boats, for the vessels will be also electrified. So it’s difficult to predict which year energy storage will be take over the month, but we see probably within ten years, we believe that will come.

Conference Operator: Appreciate the color. Next question comes from the line of Mohamed Siddiqui of National Bank. Congrats

Kelly O’Brien, Vice President, Investor Relations, Lithium Argentina1: on the good scoping study here. Just a question in terms of timing, I guess, you’re targeting construction by the 2026. Are there anything on the detailed engineering front that we should be thinking about that are on the critical path that would further derisk that 1,100,000,000.0 CapEx over the next call it six to twelve months?

Sam Pigott, President and CEO, Lithium Argentina: Thanks for the question. Maybe I’ll turn this one over to Jason.

Jason Wu, President of Ganfeng South America, Ganfeng: Yes. So few factors are very critical on the on the construction timeline. And one is like a way the engineering and right now, like, they pretty much like a finish all the detailed engineering for the pump and well filled area. So that has, like, a we will have all the joints by end of this year. So and meanwhile, we are working on the process detailed process.

The in the internal in house engineering team is working on that, and we will have that ready early next year. So you will see, like, on the engineering side, we are good. And also, like, another important is, like, the idea, the construction permit, the environment permit. We already have it last week. And the next two factors, one is, like, a financing.

We’re hopefully, like, we will have it, like, the first half next year and also really as we discussed, and then we will we may have that approval by Q2, end of Q2 or early Q3 next year. Then with all those like key points, key milestones, we are ready to start. And that’s why we see we’re going to start the construction in second half next year.

Kelly O’Brien, Vice President, Investor Relations, Lithium Argentina1: Great. Thanks for that. And then maybe a question for both Sam and Wang here. Just in terms of the sequencing of projects, how should we think about Culture Real or Stage two, maybe Mariana Stage two and TPG Stage one in terms of sequencing of projects? Could this be undertaken at the same time or it’s more of a phasing approach for each of them?

I want to comment coming after the other.

Sam Pigott, President and CEO, Lithium Argentina: Sure. I’ll answer first, but won’t comment on Mariana. That’s a Ganfeng, 100% owned project. Yeah, I mean, for XLR Stage two, Kacharya and L’Oreal Stage two, the plan right now is to prepare a rig application and development plan to align with that rig application, which will be submitted in the 2026. I think obviously coming back to one of the questions earlier about just how we’re going to finance this.

It’s important to note that for PPG, we’re both looking at third party capital. Likewise for stage two, I think there are different set of circumstances around options to finance that given that we have an existing operation for stage one. But underlying it at all is like the how and the when of growing this. We’re going to be extremely responsible for our shareholders. So that’s from a financing perspective.

From a team’s perspective, I mean, Jason down in Salta, he’s built up an incredible team who just completed, Mariana, and it’s a separate team to XR. So I think from a personnel standpoint, we do have a good chance of advancing them in parallel, but obviously, we’re going to be able to share a lot more early next year around our defining our development plan for XR and be able to share a lot more in terms of visibility on specific sequencing steps for both projects. I don’t know if Jason, you want to share on Mary Anne. I think there’s a question about stage two.

Jason Wu, President of Ganfeng South America, Ganfeng: Yes, right now Mariana is still working on the ramp up stage for the stage one And it’s it’s going good. It’s been good. And regarding stage two, the first thing we wanna share is, like, Mariana recently, we just updated the resource estimation. And the resource increased from $80,000,000 to $13,000,000 up for more than 60%. And we still have a big potential in the deeper horizon because, like, we didn’t drill deep enough.

Right now, most of the wheels just reached to 350 meters, and actually, we we can see, like, a much deeper. And the Mariana is unique because they pumping rate is very big. So the resource is not a bottleneck for Mariana. So yes, indeed, we plan we are planning for the expansions phase two and phase three and we plan to put a package and and apply for really. We will present that early next year.

And then we were like looking at the the market condition and also like the construction, like, progress of other projects, such as PPG and Kochari. And then we were, like, analyze and finally decide, what will be the what will be the the timeline for the expansion of Stage two and Stage three for Mariana.

Conference Operator: Thank you. With no further questions, this concludes our Q and A session. We thank you for your participation. This concludes today’s conference call. You may now disconnect.

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