Lithium Americas on Track for Production at Cauchari-Olaroz in 2020

Battery Metals

Despite the unusually heavy rainfall in recent weeks, there have been minimal disruptions to current construction activities.

Vancouver-based Lithium Americas (TSX:LAC,NYSE:LAC) said on Monday (February 25) that its Cauchari-Olaroz project in Argentina remains on track for production in 2020, despite heavy rains in the region.

The company, which is developing the project together with Chinese top lithium producer Ganfeng Lithium (SZSE:002460), said that although the site has received unusually heavy rainfall during recent weeks, there were minimum disruption to the current construction activities.

“Heavy rainfall in January and February has not had a material impact to our construction activities and schedule,” Jon Evans, president and COO said.

“We note the temporary disruptions to the international paved highway in Jujuy were quickly corrected and the dilution impact to the ponds was minor at this stage of development,” he added.

The company also said two evaporation ponds are now completed, with the first pond currently being filled with brine from the production wells. There are another four ponds under construction.

Additionally, there are seven wells in production and three more under construction, while work associated with roads and platforms continues as planned and contracts for earthworks, concrete supply and other key items have already been awarded.

Aside from Cauchari Olaroz, Lithium Americas owns 100-percent of the Thacker Pass lithium claystone project in Nevada.

After releasing a preliminary feasibility study for the project in August last year, the company is considering “the production of lithium hydroxide directly from lithium sulphate to provide added flexibility.”

Commissioning of the pilot plant in Reno is underway, with testing and optimization expected to start in the near term.

“While we see potential to be amongst the lowest cost lithium carbonate producers, pilot testing at Thacker Pass in Nevada might ultimately show that Lithium Americas has potential to be amongst the lowest cost lithium hydroxide producers as well, as the company eyes a possible switch to lithium hydroxide production,” analysts at Eight Capital said in a note to clients.

Looking ahead, Lithium Americas is expected to provide an update on its USA project later this year.

On Monday, shares of Lithium Americas were up 1.22 percent in Toronto, trading at C$4.96. The company’s share price has increased more than 11 percent year-to-date.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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