Lithium Americas and POSCO Execute HOA for Joint Venture

Ahead of its merger with Western Lithium (TSX:WLC), Lithium Americas has executed a heads of agreement (HOA) with POSCO regarding the commercialization of its Cauchari-Olaroz lithium project. The companies have agreed that POSCO will contribute the right to use its proprietary lithium extraction technologies to the joint venture. POSCO will also finance capital expenditures for the initial phase of production.
As quoted in the press release:

The HOA, legally non-binding and non-exclusive, provides the basic framework and conditions to establish a Joint Venture Company, which the parties expect to negotiate after completion of due diligence, and during the fourth quarter of 2015. Both parties will now commence detailed due diligence with the objective of establishing a financial model and business plan. Further details on terms such as capital investment, operating costs, product mix, economic ownership and financing responsibilities will be finalized within a Joint Venture Agreement.
At this time the parties have agreed that POSCO will contribute to the joint venture the right to use its proprietary lithium extraction technologies for the production of lithium carbonate and lithium hydroxide, while LAC will contribute the right to use brine from its Cauchari-Olaroz salar properties. The plant is expected to be producing up to 2,500 tonnes per annum by year-end 2016, and anticipates ramping up to 20,000 tonnes by year-end 2017.
POSCO has agreed to finance the capital expenditures required for the initial phase of 2,500 tonnes commercial production, ahead of the Joint Venture Company raising project financing for 20,000 tonnes.

Lithium Americas executive chairman, Tom Hodgson, said:

We are very pleased to execute this agreement on the eve of our merger with Western Lithium. This memorializes our joint commitment to develop a lithium project in Jujuy, Argentina and is the culmination of over two years of working together with POSCO. We would like to congratulate the many people whose hard efforts made this achievement possible including the strong support from our local partners in Jujuy, Argentina.

Click here for the full press release.