MANAGEMENT’S DISCUSSION AND ANALYSIS
(Expressed in US dollars, unless stated otherwise)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis (“MD&A”) provides information concerning the financial condition and results of operations of the Company and should be read in conjunction with the Company’s unaudited condensed consolidated interim financial statements and notes thereto for the three months ended March 31, 2026 and audited consolidated financial statements for the years ended December 31, 2025 and 2024 (“FY 2025” and “FY 2024,” respectively), together with the notes thereto. The financial information contained in this MD&A is derived from the unaudited condensed consolidated interim financial statements prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses certain non-GAAP financial measures. For a detailed description of each of the non-GAAP measures used, please refer to the discussion under “Use of Non-GAAP Financial Measures and Reconciliations.” This item should be read in conjunction with the Company’s unaudited condensed consolidated interim financial statements and the notes thereto included in this Form 10-Q.
The Company’s fiscal year is the 12-month period ending December 31. All references to “Q1 2026” and “Q1 2025” are to the fiscal quarters for the three-month periods ended March 31, 2026 and March 31, 2025, respectively. Amounts stated in this MD&A are in United States dollars, unless otherwise indicated.
COMPANY BACKGROUND
Lithium Americas Corp. (the “Company”) is principally focused on development of Thacker Pass (“Thacker Pass” or the “Project”) a sedimentary-based lithium deposit located in the McDermitt Caldera in Humboldt County in north-western Nevada, U.S. Thacker Pass is owned by Lithium Nevada LLC (“LN”), a wholly owned subsidiary of Lithium Nevada Ventures LLC (“Lithium Nevada Ventures”), the joint venture (“JV”) between General Motors Holdings LLC (“GM”) and the Company (together, the “JV Partners”). As of May 13, 2026, the Company owns a 62% interest in Thacker Pass and manages the Project, GM owns a 38% interest in Thacker Pass, and the DOE owns the JV Warrant (as defined below). The JV is consolidated in the unaudited condensed consolidated interim financial statements of the Company.
The Company was incorporated on January 23, 2023 under the Business Corporations Act (British Columbia). The Company’s common shares are listed on the New York Stock Exchange (“NYSE”) and on the Toronto Stock Exchange (“TSX”) under the symbol “LAC.” The Company accounts for the business in one segment and one geographical area.
The Company’s head office and principal address is Suite 3260, 666 Burrard Street, Vancouver, British Columbia, Canada, V6C 2X8.
Q1 2026 AND SUBSEQUENT TO Q1 2026 HIGHLIGHTS
•As of March 31, 2026, the Company had approximately $1.2 billion total cash and restricted cash, including $529 million at the Thacker Pass JV level.
oOn January 26, 2026, the Company completed an at-the-market (“ATM”) equity program established on November 13, 2025 (the “November 2025 ATM Program”). The Company issued and sold an aggregate total of 43.3 million common shares at an average price of $5.78 per share pursuant to the November 2025 ATM Program, for aggregate net proceeds of $246.7 million after sales agent’s commission and other expenses. Of these amounts, during Q1 2026, the Company issued and sold 32.5 million common shares at an average price of $5.92 per share, for aggregate net proceeds of $189.7 million after sales agent commission and other expenses.
oOn February 24, 2026, the Company received its second advance on the U.S. Department of Energy (the “DOE”) loan (“DOE Loan”) of $432 million.
oOn March 19, 2026, the Company entered into an ATM equity program, pursuant to which the Company may sell its common shares, no par value, up to a maximum aggregate offering price of $250 million (the “March 2026 ATM Program”). Use of net proceeds for the March 2026 ATM Program includes general corporate purposes, which may include funding of corporate and project overhead expenses, financing of
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Expressed in US dollars, unless stated otherwise)
capital expenditures, repayment of indebtedness and additions to working capital. As of March 31, 2026, the Company did not issue or sell any common shares nor receive any net proceeds pursuant to the March 2026 ATM Program. Subsequent to March 31, 2026, the Company issued and sold an aggregate total of 2.3 million common shares at an average price of $5.20 per share pursuant to the March 2026 ATM Program, for aggregate net proceeds of $11.2 million after sales agent commission and other expenses.
oAs of May 13, 2026, the Company had 351,062,478 shares issued and outstanding.
•On January 30, 2026 (the “Issuance Date”), pursuant to the omnibus waiver, consent and amendment (as amended, the “OWCA”) entered into by the Company and the DOE on October 7, 2025, the Company issued to the DOE a warrant to purchase up to 18,268,687 common shares, which was equal to 5% of the Company’s outstanding total shares as of the Issuance Date, at an exercise price of $0.01 per share (the “LAC Warrant”), exercisable for ten years from the Issuance Date, subject to customary anti-dilution adjustments and other terms set forth in the LAC Warrant. Additionally, the JV issued to the DOE a warrant to purchase 8,656,509,695 non-voting units of the JV, which was equal to a 5% economic interest in the JV as of the Issuance Date, at an exercise price of $0.0001 per unit (the “JV Warrant”), exercisable for ten years from the Issuance Date, subject to customary anti-dilution adjustments and other terms set forth in the JV Warrant.
•The Company continues to progress major construction of the processing plant at Thacker Pass Phase 1, targeting mechanical completion in late 2027. As of March 31, 2026:
oA total of 2.43 million workhours completed at Thacker Pass without a serious injury or lost-time incident, and a total recordable incident frequency rate of 0.25.
oA total of $1.3 billion of construction capital costs and other project-related costs have been capitalized, of which $1.1 billion is part of the total capital expenditure (“Capex”) estimate of $2.93 billion per the Company’s Technical Report entitled “NI 43-101 Technical Report on the Thacker Pass Project Humboldt County, Nevada, USA,” effective December 31, 2024 (“Technical Report”). The Company continues to target a total capex range of $1.3 billion to $1.6 billion for Thacker Pass Phase 1 for fiscal year 2026. See the Capital Expenditure and 2026 Capex Guidance section below for more details.
oDetailed engineering design completed surpassed 95%, while procurement was over 70% complete, including the shipment of major plant materials and equipment.
oThere were approximately 1,065 personnel on site, expected to increase to over 2,000 in the second half of 2026.
oThere were over 1,000 workers residing at the Company’s all-inclusive housing facility for construction workers in Winnemucca (the “Workforce Hub” or “WFH”).
•Long-lead equipment has been arriving to either Thacker Pass or the fabrication yard in Winnemucca, including the 115KV Main Transformer, Auxiliary Boiler, Air Cooled Heat Exchangers, Fin Fan Cooler, Duplex Stack and Bicarbonate Reactors. Additional long-lead items that have started their delivery to site include the Thickener Steel and Shell Plates, Filter Presses, Steam Turbine Generator and SS Converter. Outstanding long-lead items are expected to be delivered throughout 2026, along with other equipment and construction materials.
oOver 75% of the structural steel for Thacker Pass, which is sourced from the United Arab Emirates, is in transit or has arrived on site at Thacker Pass or the laydown yard in Winnemucca. The Company and Bechtel have worked with the steel supplier to attempt to limit the effects of the Middle East conflict, including the closure of the Strait of Hormuz, to minimize impacts on the fabrication and shipment of steel to Thacker Pass. Predominantly, the Company has successfully re-routed steel through the Port of Jeddah.
•Development milestones achieved to date at Thacker Pass include:
oThe first cable pulls on the module pipe racks commenced in March 2026.
oStructural steel at the Filter Building progresses, with the second floor being installed.
oInstallation of key equipment commenced at the following facilities: Bicarbonate Reactors for the Lithium Carbonate Crystallizer, Pillers for Magnesium Sulfate, Air Compressors and Conveyor Tail Pulley’s for the
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Expressed in US dollars, unless stated otherwise)
Filter Building, Thickener Steel and Shell Plants in the Countercurrent Decantation and Run-of-Mine areas, and Fin Fan Coolers and SS Converter for the Sulfuric Acid Plant.
oGiven the advanced level of detailed engineering, the Company has commenced a definitive capital estimate, targeting completion in the second half of 2026. Advanced levels of engineering and procurement is expected to enable the team to estimate remaining quantities and materials with higher confidence. The Company will use current data to assess remaining labor needs and productivity rates for the estimate and will incorporate recent unexpected developments including the implications of tariffs, the Middle East conflict impacts, fuel price increases and other inflationary increases that were not included in the total Capex estimate of $2.93 billion per the Company’s Technical Report. The total Capex estimate of $2.93 billion did not include any exposure to tariffs. The Company estimates the total potential exposure to tariffs for Thacker Pass Phase 1 construction costs to be approximately $80 million to $120 million, the majority of which is expected to be incurred during 2026.
oWork to enhance reliability for grid power from the local electric utility cooperative, by upgrading six regional substations and switching stations, was completed in March 2026, ahead of schedule.
•Construction at the Company’s Transload Terminal (“TLT”) west of Winnemucca commenced in March 2026, with completion targeted in 2027 to align with start up at Thacker Pass. The TLT is approximately 60 miles from Thacker Pass, adjacent to the rail line, and is intended to support operations by serving as a critical logistics hub for the Project’s reagents.
CAPITAL EXPENDITURE AND 2026 CAPEX GUIDANCE
As of March 31, 2026, a total of $1.3 billion of construction capital costs and other project-related costs have been capitalized, of which $1.1 billion is part of the total Capex estimate of $2.93 billion per the Company’s Technical Report. The Company continues to target a total Capex range of $1.3 billion to $1.6 billion for Thacker Pass Phase 1 for fiscal year 2026.
The table below summarizes Capex during the quarter ended March 31, 2026, cumulative Capex to March 31, 2026, as well as the Company’s 2026 Capex guidance.
|
|
|
|
(US$) |
For the quarter ended March 31, 2026 |
Cumulative to March 31, 2026 |
Fiscal Year 2026 Capex Guidance |
Thacker Pass Phase 1 construction costs included in the total $2.93 billion Capex estimate(1)(2) |
$275.5 million |
$1,138.1 million |
$1.2 - $1.5 billion |
Other capitalized development costs for Thacker Pass(3) |
$8.3 million |
$101.4 million |
$30 - $40 million |
Capitalized interest, including the Orion Note and DOE Loan |
$10.7 million |
$37.7 million |
$45 - $55 million |
Total |
$294.5 million |
$1,277.2 million |
$1.3 - $1.6 billion |
Capex Notes:
(1)Thacker Pass Phase 1 construction costs cumulative to March 31, 2026 and those estimated for fiscal year 2026 do not include $14.1 million and $8.0 million, respectively, of community contributions that are required to be expensed under U.S. GAAP, though these were included in the $2.93 billion Capex estimate per the Company’s Technical Report.
(2)Thacker Pass Phase 1 construction costs as of March 31, 2026, and those estimated for 2026, include actual tariffs incurred (through March 31, 2026) and estimated tariff exposure, primarily for equipment and construction materials sourced from Canada, China, India, UAE, Turkey and the European Union. The Company has been working toward limiting the effect of any potential tariffs on its construction supply chain, with approximately 75% of the total capital project cost structure related to labor, contractors and other services not expected to be directly affected by any potential tariffs. The Company continues to closely monitor potential tariff exposure; however, changes in tariffs and trade restrictions can be announced with little or no advance notice.
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Expressed in US dollars, unless stated otherwise)
(3)Other capitalized development costs are required to be capitalized under U.S. GAAP, though these were not included in $2.93 billion Capex estimate per the Company’s Technical Report.
MATERIAL RELATIONSHIPS AND RELATED AGREEMENTS
DOE ATVM Loan Program
The DOE and the Company’s subsidiary, LN, executed the DOE Loan on October 28, 2024 for a construction facility with a maximum borrowing of $1.97 billion plus up to $289.6 million of capitalized interest for a total of $2.26 billion, provided under the Advanced Technology Vehicles Manufacturing (“ATVM”) Loan Program, to fund eligible construction costs of Thacker Pass, over the period from the first advance through no later than November 30, 2028. The DOE Loan agreement was amended on December 20, 2024 to accommodate the formation of Lithium Nevada Ventures, a JV with GM to own a 100% interest in LN, which owns Thacker Pass.
On October 7, 2025, the Company and the DOE entered into an omnibus waiver, consent and amendment (as amended the “OWCA”) for certain amendments to the Company’s DOE Loan. As part of the OWCA, the DOE Loan’s expected total loan amount decreased to $2.23 billion due to estimated capitalized interest during construction decreasing to $256 million, while the DOE Loan’s principal remained the same at $1.97 billion.
On January 30, 2026, as required under the OWCA:
•The Company issued to the DOE the LAC Warrant to purchase up to 18,268,687 common shares, which was equal to 5% of the Company’s outstanding total shares as of the Issuance Date, at an exercise price of $0.01 per share, exercisable for ten years from the Issuance Date, subject to customary anti-dilution adjustments and other terms set forth in the LAC Warrant.
•The JV issued to the DOE the JV Warrant to purchase 8,656,509,695 non-voting units of the JV, which was equal to a 5% economic interest in the JV as of the Issuance Date, at an exercise price of $0.0001 per unit, exercisable for ten years from the Issuance Date, subject to customary anti-dilution adjustments and other terms set forth in the JV Warrant.
•The JV, the Company, 1339480 B.C. Ltd., LAC US Corp. (the “LAC JV Member”), GM and the DOE, entered into a Put, Call and Exchange Agreement (the “Put, Call and Exchange Agreement”), under which the DOE has the right to require GM to either purchase the JV Warrant (or cause the JV to do so) at a mutually agreed price or, failing agreement, exchange the JV Warrant for the Company’s common shares based on a defined warrant conversion rate. In addition, following substantial completion of Thacker Pass, GM has a call right to trigger the same sale or exchange mechanics if pricing cannot be agreed within specified timeframes.
As of May 13, 2026, the LAC Warrant and the JV Warrant have not been exercised.
Periodic repayments of principal and interest commence January 20, 2029. The DOE Loan has a maturity date of July 20, 2048. The Company may prepay the loan at any time, subject to certain conditions, by paying principal plus accrued interest on outstanding advances.
The Company received its first advance on the DOE Loan of $435.0 million on October 20, 2025 and its second advance on the DOE Loan of $432.0 million on February 24, 2026.
General Motors Equity Investment, Joint Venture and Offtake
On October 15, 2024, the Company entered into an investment agreement (the “Investment Agreement”) with GM to establish a JV for the purpose of funding, developing, constructing and operating Thacker Pass (“JV Transaction”). Prior to closing the JV Transaction on December 23, 2024, the Company transferred its interest and certain other assets into Lithium Nevada Ventures. In connection with the JV Transaction, the Company also closed an amendment to the DOE Loan on December 20, 2024 to accommodate changes relating to the JV Transaction.
Under the terms of the Investment Agreement, GM acquired a 38% asset-level ownership stake in Thacker Pass for $625.0 million in total cash and letters of credit, including $430.0 million of direct cash funding to the JV to support the construction
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Expressed in US dollars, unless stated otherwise)
of Phase 1 and a $195.0 million letter of credit facility (“LC Facility”) that can be used as collateral to support reserve account requirements under the DOE Loan. On August 5, 2025, the $195.0 million LC Facility was released by GM to LN.
Pursuant to an offtake agreement, GM is required to purchase lithium production from Thacker Pass Phase 1, equal to 20% of GM’s specific lithium requirements, up to 100% of Phase 1 production volume (“Phase 1 Offtake Agreement”). Concurrently with closing of the DOE Loan, the Phase 1 Offtake Agreement was extended to 20 years. As part of the JV Transaction, GM also entered into an additional 20-year offtake agreement for up to 38% of production volumes from Phase 2 of Thacker Pass and retained its right of first offer on the remaining balance of Phase 2 volumes (“Phase 2 Offtake Agreement” and, together with the Phase 1 Offtake Agreement, the “Offtake Agreements”).
On October 7, 2025, in connection with the entry into the OWCA, the Company and GM agreed to amend the Offtake Agreement as follows: (i) the delivery dates for the “Annual Purchase Forecast” and “Annual Production Forecast” were accelerated by two months; (ii) the forecast period for the first five years of Phase 1 was extended from two years to three years, with the second and third years remaining non-binding; (iii) the JV is required to prioritize GM’s volume requirements; (iv) for the first five years of Phase 1, the JV may enter into firm volume commitments with third parties, subject to a cap based on the difference between the Annual Production Forecast and GM’s Annual Purchase Forecast, and the cap will be 100% of the difference in the first year, 80% in the second year, and 60% in the third year, (v) GM’s Annual Purchase Forecast was capped at 20% year-over-year growth during the aforementioned period; (vi) after the first five years, (a) the forecast period reverts to two years, with the second year being non-binding and including no cap on GM’s Annual Purchase Forecast, and (b) third-party commitments are capped at 100% of the difference between forecasts in the first year and 50% in the second year of such forecasts; and (vii) if GM relinquishes volumes in non-binding forecast periods but later demonstrates a need for those volumes and incurs higher costs as a result of third-party purchases, GM would be entitled to a “profit true-up” equal to the volume procured multiplied by the difference between the third-party pricing and the implied JV pricing.
In the event that the DOE exercises the JV Warrant in full, the JV economic interests will be (prior to funding of the additional $120 million DOE Loan reserve accounts as required within 12 months of the OWCA) 59% held by Lithium Americas, which will continue to be the manager of the Project, 36% held by GM and 5% held by the DOE, with voting interest in the JV remaining 62% for Lithium Americas and 38% for GM. The DOE has been granted the right to have an appointed representative as an observer at the JV Board meetings for so long as the DOE holds the JV Warrant or non-voting units in the JV. The DOE and GM have certain rights under the Put, Call and Exchange Agreement, which may result in an adjustment to the ownership of the JV.
Orion Resource Partners
On April 1, 2025 (the “Orion Closing Date”), the Company closed the strategic investment of $250.0 million from fund entities managed by Orion Resource Partners LP (collectively, “Orion”), for the development and construction of Thacker Pass.
Orion purchased senior unsecured convertible notes with an aggregate principal amount of $195.0 million (the “Notes”) and entered into a production payment agreement (“PPA”) whereby Orion paid the Company $25.0 million in exchange for payments corresponding to the minerals processed and gross revenue generated by Thacker Pass (together, the Notes and PPA represent an aggregate initial investment of $220.0 million). Orion has committed to purchase an additional $30.0 million in aggregate principal amount of Notes within two years of the Orion Closing Date (the “Delayed Draw Notes”), subject to the satisfaction of certain conditions precedent, upon request by the Company.
The Notes will mature on April 1, 2030 and accrue interest payable quarterly in arrears at an annual rate of 9.875%. Interest is payable in cash or by inclusion of such interest in the principal amount at the option of the Company. The Notes are convertible at the option of the holder at any time into the Company’s common shares prior to the maturity at an initial conversion price of $3.78 per share, subject to certain adjustments. In October 2025, Orion elected to convert a total of $97.5 million in accordance with the terms of the Notes. As a result, the Company issued an aggregate total of 25.8 million common shares of the Company to Orion. Following the conversions, total future interest payable under the Notes has been reduced pro rata.
Under the PPA, Orion is entitled to fixed and variable production payments with respect to the first 41,500 tonnes of lithium processed at Thacker Pass each year, subject to certain adjustments.
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Expressed in US dollars, unless stated otherwise)
Common Shares Offering
On January 26, 2026, the Company completed the November 2025 ATM Program. The Company issued and sold an aggregate total 43.3 million common shares at an average price of $5.78 per share pursuant to the November 2025 ATM Program, for aggregate net proceeds of $246.7 million after sales agent’s commission and other expenses.
On March 19, 2026, the Company entered into an ATM equity program, pursuant to which the Company may sell its common shares, no par value, up to a maximum aggregate offering price of $250 million (the “March 2026 ATM Program”). As of March 31, 2026, the Company did not issue or sell any common shares nor receive any net proceeds pursuant to the March 2026 ATM Program. Subsequent to March 31, 2026, the Company issued and sold an aggregate total of 2.3 million common shares at an average price of $5.20 per share pursuant to the March 2026 ATM Program, for aggregate net proceeds of $11.2 million after sales agent commission and other expenses.
Department of War Grant
In August 2024, the Company received approval for an $11.8 million grant from the U.S. Department of War (previously known as the Department of Defense) to support an upgrade of the local power infrastructure and to help build a transloading facility. At March 31, 2026, $6.2 million of the grant remained available and cumulative eligible costs of $5.6 million had been incurred.
RESULTS OF OPERATIONS
The selected consolidated financial information set out below has been derived from the Company's audited consolidated annual financial statements for FY 2025 and unaudited condensed consolidated interim financial statements for Q1 2026 and should be read in conjunction with those consolidated financial statements and the related notes thereto.
The Three Months Ended March 31, 2026 compared with the Three Months Ended March 31, 2025
The following table provides a summary of the Company’s unaudited condensed consolidated interim results of operations for Q1 2026 compared with Q1 2025.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended March 31, |
|
|
Increase/ |
|
(in US$ millions except for share amounts) |
|
2026 |
|
|
2025 |
|
|
(decrease) |
|
Net income (loss) |
|
|
4.6 |
|
|
|
(11.5 |
) |
|
|
16.1 |
|
Net loss attributable to LAC stockholders |
|
|
(0.4 |
) |
|
|
(10.7 |
) |
|
|
10.3 |
|
Net loss per share – basic and diluted - attributable to common stockholders |
|
|
(0.00 |
) |
|
|
(0.05 |
) |
|
|
(0.05 |
) |
|
|
|
|
|
|
|
|
|
|
Net income (loss) comprised of: |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
$ |
(11.1 |
) |
|
$ |
(6.5 |
) |
|
$ |
(4.6 |
) |
Transaction costs |
|
|
(1.0 |
) |
|
|
(4.3 |
) |
|
|
3.3 |
|
Gain/ (loss) on financial instruments measured at fair value: |
|
|
|
|
|
|
|
|
|
Gain on LAC Warrant and JV Warrant obligations |
|
|
0.4 |
|
|
|
0.0 |
|
|
|
0.4 |
|
Gain on convertible debt and conversion feature |
|
|
14.3 |
|
|
|
0.0 |
|
|
|
14.3 |
|
Loss on financial instruments measured at fair value |
|
|
(4.6 |
) |
|
|
(2.0 |
) |
|
|
(2.6 |
) |
Other income |
|
|
6.6 |
|
|
|
1.3 |
|
|
|
5.3 |
|
General and administrative expenses for Q1 2026 increased to $11.1 million (Q1 2025 - $6.5 million) due to increased hiring, share-based compensation, community investment and regulatory and professional fees to support increased activities related to the Company’s operations.
Transaction costs in Q1 2026 decreased to $1.0 million (Q1 2025 - $4.3 million). Transaction costs in Q1 2026 primarily related to advisory and professional fees associated with the issuance of the LAC Warrant and JV Warrant on January 30, 2026. Transaction costs in Q1 2025 primarily related to costs associated with the Orion Investment.
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Expressed in US dollars, unless stated otherwise)
A loss on change in the fair value of the LAC Warrant of $5.0 million was recognized during Q1 2026 (Q1 2025 - $nil), mainly reflecting the impact of the increase in the Company’s share price from $4.36 on December 31, 2025 to $4.87 on January 30, 2026, the date upon which the LAC Warrant was issued and reclassified to equity. A gain on change in the fair value of the JV Warrant, including obligations associated with the Put, Call and Exchange Agreement, of $5.4 million was recognized during Q1 2026 (Q1 2025 - $nil), mainly reflecting the impact of the decrease in the Company’s share price from $4.36 on December 31, 2025 to $3.95 on March 31, 2026.
A gain on the fair value of the embedded derivative associated with the Notes (the “Embedded Derivative”) of $14.3 million was recognized in Q1 2026 (Q1 2025 - $nil). This non-cash fair value gain on the Embedded Derivative primarily reflects the impact of the decrease in the Company’s share price from $4.36 at December 31, 2025 to $3.95 at March 31, 2026.
A loss on financial instruments measured at fair value of $4.6 million was recognized for Q1 2026 (Q1 2025 - $2.0 million), which mainly consisted of a $4.5 million loss on change in fair value of the Company’s investment in Ascend Elements, Inc. (“Ascend Elements”) (Q1 2025 - loss of $1.7 million). As of March 31, 2026, the Company determined the fair value of the investment in Ascend Elements was $nil based on a review of Ascend Elements’ public disclosures, which indicated there was significant uncertainty regarding the recovery of the Company’s investment. For Q1 2025, the loss reflected the overall downturn of the battery recycling market.
Other income for Q1 2026 increased to $6.6 million (Q1 2025 - $1.3 million), primarily driven by higher interest income due to higher balances in interest generating bank accounts, driven largely by proceeds from the ATM programs executed during the year ended December 31, 2025 as well as the quarter ended March 31, 2026.
Selected financial position information
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ millions) |
|
March 31,
2026 |
|
|
December 31,
2025 |
|
|
Increase/
(decrease) |
|
Cash and restricted cash |
|
$ |
1,207.6 |
|
|
$ |
905.6 |
|
|
$ |
302.0 |
|
Mineral properties, plant and equipment, net |
|
|
1,667.3 |
|
|
|
1,344.0 |
|
|
|
323.3 |
|
Total assets |
|
|
3,112.7 |
|
|
|
2,579.0 |
|
|
|
533.7 |
|
Total liabilities |
|
|
1,235.8 |
|
|
|
992.4 |
|
|
|
243.4 |
|
At March 31, 2026, total assets increased by $533.7 million from December 31, 2025, driven primarily by a $302.0 million increase in cash and restricted cash and a $323.3 million net increase in mineral properties, plant and equipment, partially offset by a $87.4 million decrease in deferred financing costs.
•Cash and restricted cash increased primarily from the receipt of funds drawn under the DOE Loan and proceeds received from the November 2025 ATM Program, offset primarily by construction costs, general and administrative expenses and transaction costs. Funds received from advances on the DOE Loan are held in restricted bank accounts owned by LN and managed by a collateral agent.
•Mineral properties, plant and equipment, net increased mainly due to continued development of Thacker Pass, including costs associated with completion of the WFH, on-going engineering and procurement activities, payments towards long-lead equipment as well as continued on-site construction works. In addition, finance costs related to Thacker Pass totaling $13.7 million, including interest associated with the Orion Investment and DOE Loan advances, were capitalized in Q1 2026.
•Deferred financing costs decreased due to the reclassification of $87.8 million unamortized costs related to the second advance under the DOE Loan. Upon signing the OWCA, $400.2 million in transaction costs were recorded as an asset. As funds are drawn, deferred financing costs are allocated to the DOE Loan liability in proportion to the amounts borrowed in relation to total borrowings expected under the facility. These costs are amortized as interest over the loan term using the effective interest rate method and capitalized to Thacker Pass.
At March 31, 2026, total liabilities increased by $243.5 million compared to December 31, 2025. This change was mainly attributable to a $351.9 million increase in the DOE Loan ($432.0 million related to the second advance and interest costs of $6.6 million, net of $86.7 million amortized deferred financing costs). This was partly offset by a $10.6 million reduction in the Orion Notes ($14.3 million fair value gain on the Embedded Derivative which reduced the carrying value of the Orion Notes, partly offset by interest of $3.7 million), an $83.8 million decrease in the LAC Warrant obligation ($88.8 million fair
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Expressed in US dollars, unless stated otherwise)
value of the LAC Warrant reclassified to equity on January 30, 2026 partly offset by $5.0 million loss recognized for the fair value increase in the LAC Warrant from December 31, 2026 to January 30, 2026), as well as a $17.7 million decrease in accounts payable.
LIQUIDITY AND CAPITAL RESOURCES
The Company has recurring net losses and negative operating cash flows and expects to continue to operate at a loss for the foreseeable future, which includes the period that Thacker Pass Phase 1 is under development. As the Company develops Thacker Pass, it will not generate revenues from operations and there is no expectation it will generate any revenue from operations until after Thacker Pass begins production. Thacker Pass is targeting mechanical completion in late 2027 with production ramp up during 2028.
The Company believes that it will have sufficient available liquidity to carry out its business plans, including the currently planned development activities at Thacker Pass, for at least the next 12 months. Liquidity includes cash and restricted cash and available borrowing capacity under the DOE Loan. Beyond the next 12 months, until the Company is able to generate sufficient operating cash flows, the Company expects to meet its obligations and fund the development of Thacker Pass through any available cash and restricted cash as well as the financings it has secured; however, due to the conditions associated with such financings, there can be no assurance that the Company will successfully complete all of its contemplated financing plans. Additionally, the Company may, from time to time, and on an opportunistic basis as market conditions permit, engage in capital markets transactions to provide additional financing to support its capital and operating needs. The Company does not engage in currency hedging activities to offset the risk of currency fluctuations.
At March 31, 2026, the Company had cash of $758.5 million (December 31, 2025 - $568.2 million), restricted cash of $449.1 million (December 31, 2025 - $337.4 million) and working capital (non-GAAP) of $1.0 billion (December 31, 2025 - $734.8 million). Advances under the DOE Loan, cash flows from Thacker Pass and other amounts received by LN are required to be held in restricted cash accounts owned by LN and managed by a collateral agent, pursuant to a Collateral Agency and Accounts Agreement (as amended, the “Accounts Agreement”) entered into by and among LN, DOE and Citibank, N.A., in its capacity as collateral agent (“Collateral Agent”) and Depositary Bank (“Depositary Bank”). Pursuant to the Accounts Agreement, LN must comply with certain reporting and notice requirements to draw upon or deposit amounts in the restricted cash accounts. Advances under the DOE Loan typically happen quarterly and the Company draws upon those funds on a monthly basis.
The Company has the following sources of liquidity or capital resources, which are also described above in sections Q1 2026 and Subsequent to Q1 2026 Highlights and Material Relationships and Related Agreements.
Debt
On April 1, 2025, the Company closed the Orion Investment for gross proceeds of $220.0 million. In addition, subject to certain conditions precedent, Orion agreed to purchase an additional $30.0 million in Delayed Draw Notes within two years of the Orion Closing Date upon request by the Company. In October 2025, Orion exercised its option to convert $97.5 million of the principal of the convertible debt and associated accrued interest into equity of the Company, and, as a result 25.8 million common shares were issued to Orion. At March 31, 2026, the convertible debt principal balance was $113.2 million (December 31, 2025 - $110.5 million). The remaining principal and deferred interest is due in April 2030, unless redeemed or converted early.
On October 28, 2024, the Company closed the $2.26 billion DOE Loan under the ATVM Loan Program, for financing the construction of Phase 1 processing facilities at Thacker Pass. On October 7, 2025, the Company and the DOE entered into the OWCA for certain amendments to the DOE Loan. Pursuant to the OWCA, the DOE Loan’s expected total loan amount decreased to $2.23 billion due to estimated capitalized interest during construction decreasing to $256.0 million, while the DOE Loan’s principal remained the same at $1.97 billion. On October 20, 2025, the Company received its initial advance of $435.0 million under the DOE Loan, followed by its second advance of $432.0 million on February 24, 2026. Subject to the terms and conditions of the DOE Loan, the Company expects subsequent advances to occur approximately quarterly. The Company agreed to contribute an additional $120 million to the DOE Loan reserve accounts, to be funded within 12 months of the OWCA. Periodic payments of principal and interest do not commence until January 2029.
Joint Venture with GM
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Expressed in US dollars, unless stated otherwise)
On October 15, 2024, the Company and GM entered into the Investment Agreement to establish the JV for the purpose of funding, developing, constructing and operating Thacker Pass. As of March 31, 2026, GM has contributed a total of $430.0 million in cash to the JV. In addition, as of August 2025, GM provided a $195 million letter of credit facility, which attracts no interest and matures at the same time as the DOE Loan, unless otherwise withdrawn under the Investment Agreement.
At March 31, 2026, the Company's net assets of $1.9 billion included $1.4 billion held in the JV (inclusive of GM's non-controlling interest), of which $1.4 billion was held by LN. The DOE Loan imposes certain restrictions on the transfer of assets from LN to the Company, including prohibitions on dividend payments and loans from LN to the Company, the making of other payments to the Company, and transfers of any assets comprising part of the collateral package. Exceptions to such restrictions are possible upon the satisfaction of certain conditions, including attainment of certain construction milestones. The DOE Loan also requires LN to maintain a certain amount of working capital (non-GAAP) sufficient to cover project-related costs. Under the terms of the JV Transaction Documents, there are certain additional restrictions on asset transfers from LN to the Company, including transfers of material assets outside of the ordinary course of business or transfers involving assets with a value of greater than $5.0 million (subject to certain exceptions, including for sales of lithium in the ordinary course of business or sales of non-productive assets with a value of less than $10.0 million).
Equity Offerings
On November 13, 2025, the Company established the November 2025 ATM Program, which was completed on January 26, 2026. During Q1 2026, the Company sold 32.5 million common shares at an average price of $5.92 per share, for aggregate net proceeds of $189.7 million after sales agent’s commission and other expenses.
On March 19, 2026, the Company established the March 2026 ATM Program as described under section Common Shares Offering above. Under this program, subsequent to March 31, 2026, the Company issued and sold an aggregate total of 2.3 million common shares at an average price of $5.20 per share, for aggregate net proceeds of $11.2 million after sales agent commission and other expenses.
Cash Flow Summary
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
(in US$ millions) |
|
2026 |
|
|
2025 |
|
Net cash used in operating activities |
|
$ |
(18.3 |
) |
|
$ |
(18.9 |
) |
Net cash used in investing activities |
|
|
(299.3 |
) |
|
|
(117.9 |
) |
Net cash provided by (used in) financing activities |
|
|
619.6 |
|
|
|
(10.5 |
) |
Change in cash and restricted cash |
|
|
302.0 |
|
|
|
(147.3 |
) |
Cash and restricted cash – beginning of period |
|
|
905.6 |
|
|
|
594.2 |
|
Cash and restricted cash – end of period |
|
$ |
1,207.6 |
|
|
$ |
446.9 |
|
Operating Activities
Net cash used in operating activities during Q1 2026 was $18.3 million, a decrease of $0.6 million versus Q1 2025, primarily due to higher interest income partly offset by increased net working capital use (non-GAAP) and higher general and administrative expenses.
Investing Activities
Net cash used in investing activities during Q1 2026 was $299.3 million, an increase of $181.4 million from Q1 2025, primarily attributable to a higher level of construction activity and associated expenditures at Thacker Pass.
Financing Activities
Net cash provided by financing activities during Q1 2026 was $619.6 million compared to net cash used in financing activities of $10.5 million during Q1 2025. During Q1 2026, net proceeds received from financing transactions included $189.7 million in net proceeds from the November 2025 ATM Program and $432.0 million from the second advance under the DOE Loan. These inflows were partially offset by principal payments for finance lease obligations as well as financing fees. During Q1
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Expressed in US dollars, unless stated otherwise)
2025, the Company did not receive proceeds from financing transactions but did make principal payments on finance lease obligations and paid financing fees of $9.3 million associated with the DOE Loan.
Contractual Obligations
The Company’s contractual obligations, commitments under long-term purchase agreements and other commitments as at March 31, 2026 are disclosed in Notes 4, 7, 8 and 15 to the unaudited condensed consolidated interim financial statements for the three months ended March 31, 2026.
OFF-BALANCE SHEET ARRANGEMENTS
As at March 31, 2026, the Company had no off-balance sheet arrangements that have or are reasonably likely to have a material effect on its financial condition, results of operations, or liquidity.
DECOMMISSIONING PROVISION AND RECLAMATION BOND
The carrying value of the liability for decommissioning arisen as a result of exploration and development activities at Thacker Pass was $0.5 million as of March 31, 2026 (December 31, 2025 - $0.5 million). The Company has a $1.7 million reclamation bond payable to the Bureau of Land Management (“BLM”) guaranteed by a third-party insurance company with $0.3 million accepted and obligated for exploration projects. In February 2025, a $73 million reclamation bond payable to the BLM was put in place for Thacker Pass, which was accepted and obligated in March 2025.
CRITICAL ACCOUNTING ESTIMATES
The March 31, 2026, unaudited condensed consolidated interim financial statements have been prepared in accordance with U.S. GAAP. The preparation of unaudited condensed consolidated interim financial statements requires management to make estimates that affect the reported amounts of assets, liabilities and expenses. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. While significant accounting policies are more fully described in Note 2 to the audited consolidated financial statements for the year ended December 31, 2025, the Company has provided below the accounting policies and estimates critical to its business operations and understanding of its financial results.
Also included below are the key judgments and sources of estimation uncertainty that management has determined could have the most significant impact on the amounts recognized in the unaudited condensed consolidated interim financial statements for the three months ended March 31, 2026.
Assessment of Impairment of Thacker Pass
The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Once it is determined that impairment exists, an impairment loss is measured as the amount by which the asset carrying value exceeds its fair value. For asset groups where an impairment loss is determined using the discounted future net cash flows method, future cash flows are estimated based on quantities of recoverable mineralized material, expected lithium prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. The term “recoverable mineralized material” refers to the estimated amount of lithium or other commodities that will be obtained after considering losses during processing and treatment. The Company’s estimates of future cash flows are based on numerous assumptions and uncertainties. It is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, lithium and other commodity prices, production levels and costs of capital are each subject to significant risks and uncertainties.
Accounting for Joint Venture with GM
The Company determined that the JV is a variable interest entity due to its reliance on additional financing to complete Phase 1 of the development of Thacker Pass. The Company has determined it is the primary beneficiary of the JV due to the relative decision-making power of the parties over the most significant activities of the JV. As a result, the Company has consolidated Lithium Nevada Ventures in its unaudited condensed consolidated interim financial statements.
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Expressed in US dollars, unless stated otherwise)
Accounting and Valuation for Debt and Debt Facilities
The Company accounts for debt instruments, including convertible debt and the DOE Loan, as financial liabilities recorded at amortized cost unless a fair value election is applied. Interest cost is capitalized where the proceeds are used to fund the development of qualifying assets. Initial proceeds received are allocated between the debt host and any embedded derivative and other instruments in the same transaction. Any resulting discount is accreted over the term of the debt instrument using the effective interest rate method.
Embedded derivative features required to be separated by U.S. GAAP are carried at fair value with changes in fair value recognized through income or loss. The fair value of embedded derivative features require significant estimates and judgments to be made by management.
Direct and incremental costs incurred to obtain a debt facility, including fees paid to the lender and third-party transaction costs, are deferred once the facility is considered probable and are recorded as deferred financing costs associated with the loan commitment and are reclassified as a discount on debt once drawn, in proportion to amounts borrowed in relation to total borrowings expected under the facility.
Accounting and Valuation for Contracts on Own Equity
Contracts or embedded derivative features to issue common shares, other than through share-based payments issued in connection with goods or services, are evaluated to determine whether they are classified as financial liabilities or equity. Contracts on the Company's own equity include the conversion feature in the convertible debt and the warrants and exchange obligations issued to the DOE. Contracts that may be settled net in cash outside the control of the Company or are not indexed to equity are treated as financial liabilities, recorded at fair value with changes recorded through income or loss. To the extent an instrument subsequently becomes indexed to own equity and is eligible to be classified as equity, it is reclassified to equity at its fair value on the date of reclassification. The Company’s obligations under the LAC Warrant to January 30, 2026 and the Company’s obligations under a JV Warrant Exchange are subject to estimation which includes, along with the price of the underlying equity, estimates of future share issuances through sale of shares or conversion of convertible debt. The value of the JV Warrant and LAC’s obligation in the event of a JV Warrant Exchange are also affected by future issuance of units.
Royalties and Production Payments
Royalties on future production or sales are reported based on their underlying characteristics. When indicated by their terms, royalties and production payments are treated as financial liabilities, such as those subject to call options for a specified price or those sold on proven properties and settleable with cash flows in which the Company has significant continuing involvement.
Accounting Developments
For a discussion of Recently Adopted and Recently Issued Accounting Pronouncements, refer to Note 2 to the audited consolidated financial statements for the year ended December 31, 2025 and Note 1 in the unaudited condensed consolidated interim financial statements for the three months ended March 31, 2026.
USE OF NON-GAAP FINANCIAL MEASURES AND RECONCILIATION
The Company makes reference to certain non-GAAP measures. These measures are not recognized measures under U.S. GAAP, do not have a standardized meaning prescribed by U.S. GAAP and, therefore, may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those U.S. GAAP measures by providing further understanding of the Company's liquidity from management’s perspective. Accordingly, these measures are not intended to represent, and should not be considered as alternatives to other performance measures derived in accordance with U.S. GAAP as measures of liquidity. In addition to results determined in accordance with U.S. GAAP, the Company uses “working capital”, a non-GAAP measure. This non-U.S. GAAP measure is used to provide investors with a supplemental measure of the Company's liquidity and thus highlight trends in the core business that may not otherwise be apparent when relying solely on U.S. GAAP measures.
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Expressed in US dollars, unless stated otherwise)
“Working capital” is the difference between current assets and current liabilities. It is a financial measure that has been derived from the Company’s consolidated financial statements and applied on a consistent basis as appropriate. Various assets and liabilities fluctuate significantly from month to month depending on short term liquidity needs. The Company discloses this financial measure because it believes it assists readers in understanding the Company’s financial position and provides further information about the Company’s liquidity to investors.
|
|
|
|
|
|
|
|
|
|
|
|
|
(in US$ millions) |
|
March 31,
2026 |
|
|
December 31,
2025 |
|
|
Change |
|
Current assets |
|
$ |
1,212.4 |
|
|
$ |
911.6 |
|
|
$ |
300.8 |
|
Less: current liabilities |
|
|
164.7 |
|
|
|
176.8 |
|
|
|
12.1 |
|
Working capital (non-U.S. GAAP) |
|
$ |
1,047.7 |
|
|
$ |
734.8 |
|
|
$ |
312.9 |
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's exposure to market risk is described in Part II. Item 7A. Quantitative and Qualitative Disclosures About Market Risk of the annual report on Form 10-K for the year ended December 31, 2025. The Company believes its exposure to market risk has not changed materially since then.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of March 31, 2026. Based on the foregoing, the CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in reports that are filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and such information is accumulated and communicated to management, including the Company’s CEO and CFO, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in the Company's internal control over financial reporting that occurred during the most recent quarter, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
