Trident Royalties has noted the receipt by Lithium Americas Corp (TSX:LAC, NYSE:LAC) of a letter of Substantial Completion from the US Department of Energy for the Thacker Pass lithium project in Nevada.
The Letter of Substantial Completion determines that LAC's application for the DOE's Advanced Technology Vehicles Manufacturing Loan Program contains all the information necessary to conduct an eligibility assessment and can commence the process to engage in confirmatory due diligence and term sheet negotiation.
If LAC is offered a loan by DOE, it expects funding from the ATVM Loan Program to provide up to 75% of Thacker Pass' total capital costs for construction.
Relevant development costs incurred by the project may qualify as eligible costs under the ATVM Loan Program as of 31 January 2023.
On 31 January 2023, LAC entered into a binding supply agreement with General Motors where the carmaker will receive exclusive access to production for 10 years from the commencement of Phase 1 operations as part of a US$650mln equity investment.
“With the expected funding from the ATVM Loan Program, in combination with GM's $650mln equity investment and cash on hand, LAC expects to have secured the necessary funding to substantially de-risk Thacker Pass Phase 1 construction,” Trident said.
The UK company has a 60% interest in a gross revenue royalty over the entirety of Thacker Pass, worth US$45mln per year currently.
Adam Davidson, Trident’s chief executive, said: "This is another very positive step forward for Thacker Pass.
“The news from LAC in recent weeks of General Motor's strategic $650 million equity investment, followed in quick succession with the ruling from the Federal Court that there is no impediment to commencing construction, are critical milestones for the Project.
“This recent support from DOE further endorses the potential of Thacker Pass as a long life mine with significant strategic importance in the context of the United States' transition to net zero."