Lithium Argentina, Ganfeng to enter joint venture

Mr. Sam Pigott reports LITHIUM ARGENTINA AND GANFENG TO FORM NEW JOINT VENTURE TO CONSOLIDATE THE POZUELOS AND PASTOS GRANDES BASINS Lithium Argentina AG has executed a framework agreement with Ganfeng Lithium Group Co. Ltd. to establish a new joint venture consolidating Ganfeng's solely owned Pozuelos-Pastos Grandes project with Lithium Argentina's Pastos Grandes project (85 per cent owned) and the Sal de la Puna project (65 per cent owned). Upon closing, Ganfeng will hold 67 per cent, and Lithium Argentina 33 per cent of PPG, with ownership based on resources, capital contributions and technology inputs. Highlights: Regional growth consolidation: combining three contiguous lithium brine projects in Salta, Argentina, into a newly formed joint venture, creating unified development platform; Global-scale operation: targeting up to 150,000 tonnes per annum of lithium carbonate equivalent production capacity in three phases, positioning new JV among largest operations globally; Advanced processing technologies: utilizing a hybrid of direct lithium extraction and solar evaporation to enhance scalability and improve efficiency; Proven partnership model: structured on the existing partnership between Ganfeng and Lithium Argentina used to develop the Cauchari-Olaroz Stage 1, leveraging the parties' local expertise, operational teams and proximity in northern Argentina; Feasibility study nearing completion: results expected to be released by year-end, to be incorporated into an application under Argentina's incentive regime for large investments targeted for submission in first half 2026; Combined financing effort: both parties are jointly pursuing financing options to finance development costs, including collaboration with strategic partners and potential customers for offtake and minority equity interests and project financing; Derisked balance sheet: Ganfeng to provide Lithium Argentina with a six-year, $130-million debt facility at secured overnight financing rate plus 2.5 per cent, providing capacity to refinance corporate debt and further strengthen the company's balance sheet. "This transaction builds on our successful partnership with Ganfeng at Cauchari-Olaroz, Argentina's largest lithium operation," said Sam Pigott, president and chief executive officer of Lithium Argentina. "With this transformative step forward, we are increasing our ownership into the Pozuelos basin and aligning our interests around a substantially larger-scale operation. The new JV will provide access to advanced technologies, increased financial flexibility and meaningful operating synergies. It represents an important milestone in our strategy to develop a diversified, scalable and sustainable global lithium supply chain while strengthening our balance sheet and creating lasting value for our shareholders." Project details Since acquiring the Pastos Grandes project through its purchase of Millennial Lithium in 2022 and its 65-per-cent interest in Sal de la Puna through the acquisition of Arena Minerals in 2023, Lithium Argentina has advanced a hydrogeological model, completed environmental baseline studies, update resource estimates and constructed a pilot evaporation pond system. Ganfeng acquired the Pozuelos-Pastos Grandes project in 2022 from Pluspetrol Resources for $1.0-billion and has since invested an additional $200-million to advance development, including infrastructure, a production well field and an over 2,000-person construction camp. In total, Lithium Argentina and Ganfeng have invested approximately $1.8-billion in acquisition and development costs across the combined PPG assets. The current development plan, with a feasibility study under way, targets a phased production capacity of up to 150,000 tonnes per annum of LCE in three phases of 50,000 tpa each. The feasibility study will evaluate both lithium carbonate and lithium chloride production to provide added flexibility for use in battery markets and will use a hybrid flow sheet combining DLE and solar evaporation to optimize scalability and efficiency. Results of the feasibility study are expected to be released by the end of 2025 and will be used to support an RIGI application, which is expected to be formally submitted in the first half of 2026. The partners are jointly pursuing financing options to finance further development, including collaboration with potential customers and strategic partners for offtake agreements, minority equity interests and project financing. Debt facility In connection with the new JV, Ganfeng has agreed to provide Lithium Argentina with a $130-million, six-year debt facility bearing interest at SOFR plus 2.5 per cent. The debt facility enhances Lithium Argentina's financial flexibility, providing capacity to refinance corporate debt and further strengthen the company's balance sheet. As part of the debt facility, Lithium Argentina has agreed to allocate up to 50 per cent of its offtake from the initial development phase of PPG -- capped at 6,000 tpa of LCE -- to Ganfeng at market prices. The debt facility will be prepayable without penalties and secured by Lithium Argentina's equity interest in PPG, which may be released and subordinated to new corporate debt financings. Implementation of the debt facility remains subject to finalization of the new JV and customary approvals. New JV details Pursuant to the framework agreement, the parties have committed to immediately undertake a series of steps that will serve as the legal and business foundation for the new JV, including: (i) settlement of definitive agreements covering key commercial terms of the new JV, including a shareholder agreement or equivalent, operating agreement, offtake agreement, and technology licence agreement; (ii) completion of a development plan; and (iii) completion of the definitive loan agreement for the debt facility. Each of these steps constitutes a condition to formation of the new JV, along with other customary conditions, including regulatory approvals and applicable stock exchange approvals. The new JV is expected to close by first quarter 2026. About Lithium Argentina AG Lithium Argentina is an emerging producer of lithium carbonate for use primarily in lithium-ion batteries and electric vehicles. The company, in partnership with Ganfeng, operates the Cauchari-Olaroz lithium brine operation in the Jujuy province of Argentina and advances PPG in the Salta province of Argentina. Lithium Argentina currently trades on the Toronto Stock Exchange and on the New York Stock Exchange under the ticker LAR. We seek Safe Harbor.