• Lithium Carbonate Production: Approximately 6,800 tonnes in Q3, a 21% increase from Q2.
• Operating Capacity: Plant operating at 75% to 80% of nameplate capacity.
• Production Guidance: Targeting 20,000 to 25,000 tonnes of lithium carbonate for the year.
• Processing Cost: Reduced from $2,000 to $1,500 per tonne for battery quality lithium carbonate.
• Realized Prices: Approximately $7,000 per tonne for Cauchari-Olaroz lithium carbonate.

• Warning! GuruFocus has detected 4 Warning Signs with LAAC.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lithium Americas (Argentina) Corp (NYSE:LAAC) reported a 21% increase in lithium carbonate production at Cauchari-Olaroz, reaching approximately 6,800 tonnes in the third quarter.
• The company successfully reduced additional processing costs for battery-quality lithium carbonate from $2,000 to $1,500 per tonne, positively impacting margins.
• Operations at Cauchari-Olaroz are running at 75% to 80% of nameplate capacity, with expectations to maintain this level into 2025 and a long-term target of 40,000 tonnes.
• The newly passed RIGI regime in Argentina is expected to provide attractive fiscal incentives, supporting large-scale investments and the company's growth pipeline.
• Lithium Americas (Argentina) Corp (NYSE:LAAC) is actively working on a regional development plan around Pastos Grandes Basin, with more information expected in early 2025.

Negative Points

• Lithium market prices have seen downward pressure, with realized prices for Cauchari-Olaroz falling to approximately $7,000 per tonne.
• Despite production increases, the company expects to be around break-even in the fourth quarter at current lithium prices.
• There is uncertainty regarding the optimal product mix and quality to address evolving customer needs, which could impact future margins.
• The company faces challenges in sustaining quality at higher production levels, requiring ongoing collaboration with partner Ganfeng.
• Lithium Americas (Argentina) Corp (NYSE:LAAC) has not yet finalized plans for Cauchari Phase 2, with market conditions and financing options still under evaluation.

Q & A Highlights

Q: Is Cauchari still expected to be cash flow positive given the decline in lithium prices and reduced processing costs? A: Sam Pigott, President and CEO, stated that while prices have declined, costs have also decreased due to higher production levels. For the fourth quarter, they expect to be around break-even at current prices. They are working with Ganfeng on the production plan for next year and will provide more details early in the new year.

Q: When in 2025 do you expect production levels to increase significantly, and are there challenges in maintaining quality at higher production levels? A: Sam Pigott mentioned they are pleased with the current production levels, operating at 75% to 80% capacity. They expect to maintain these levels into early 2025 and are working with Ganfeng on next year's production plan, which will be shared with investors early in the new year.

Q: Can you explain the pricing details, given the difference between the realized price and the average price in China? A: Sam Pigott clarified that the China price includes VAT, which needs to be removed, along with the additional processing fee. The current processing fee is $1,500, and they are evaluating if it can be reduced further in 2025.

Q: What are the plans for refinancing the convertible debt due in January 2027? A: Sam Pigott and Alex Shulga, CFO, indicated that the convertible debt has an attractive interest rate of 1.75%. They are in contact with convert holders and are confident about refinancing closer to maturity, focusing on refinancing Exar's short-term debt first.

Q: What should investors expect from the regional development plan update, and what are the capital needs for next year? A: Sam Pigott explained that the regional development plan will incorporate new technologies to enhance recoveries and improve environmental impact. They are cautious about advancing projects only when beneficial for shareholders and are focused on finalizing and delivering the plan to the market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.