Lithium Americas: Shares Rally on US Department of Energy Loan Conditional Commitment

Lithium Americas announced that it received a conditional commitment from the US Department of Energy for a $2.26 billion loan to fund the majority of capital expenditures related to the company's Thacker Pass lithium project in the US state of Nevada. Separately, the company announced an updated project phase 1 capex estimate of $2.9 billion, up from the prior estimate of $2.3 billion and a delayed timeline to start production in 2027 versus 2026. We had previously assumed Lithium Americas would be able to secure the loan. Having updated our model to incorporate the higher capex cost and delayed production start, we trimmed our Lithium Americas fair value estimate to USD 18 (CAD 24) from USD 20 (CAD 28). Our Morningstar Economic Moat Rating of none is unchanged.