Lithium Argentina has announced the closing of a strategic $180-million investment from Ganfeng Lithium Group through the issue of a six-year unsecured convertible note.
Lithium Argentina (44.8%) and Ganfeng (46.7%) jointly own the Cauchari-Olaroz project, in Argentina.
“With the funds from the strategic investment and cash distributions from Cauchari-Olaroz, Lithium Argentina now has a materially stronger balance sheet, with lower net debt, a six-year maturity profile and a low cost of capital,” says Lithium Argentina CEO Sam Pigott.
He adds that the combination gives the company the flexibility to advance Stage 2 at Cauchari-Olaroz and support the Pozuelos-Pastos Grandes (PPG) project, which is also in Argentina, in a disciplined, phased approach that limits equity dilution and unlocks the value of both assets for shareholders.
Ganfeng holds 67% ownership of PPG and Lithium Argentina the balance. PPG combines Ganfeng’s Pozuelos-Pastos Grandes project with Lithium Argentina‘s Pastos Grandes and Sal de la Puna projects. The consolidation of all the projects remains on track for the end of September.
Assuming full conversion of the note issued to Ganfeng, its ownership in Lithium Argentina will increase from 9.6% to 16.1% on a fully diluted basis.