Vancouver-based lithium miner Lithium Americas (TSX:LAC) saw its share price soar more than 22 per cent on Wednesday thanks to automotive giant General Motors (NYSE:GM) announcing plans to invest US$625 million in cash and credit to buy a stake in a Lithium Americas mine in Nevada.
Lithium is largely used in batteries and GM's interest in the soft silvery-white metal is because it uses lithium in electric-vehicle (EV) batteries.
The agreement enables GM to acquire a 38-per-cent stake in the Thacker Pass lithium carbonate mining operation in Nevada.
The new investment is on top of GM's US$320 million provision to Lithium Americas last year.
The new money includes US$430 million in cash to build Phase 1 of the mine, as well as US$195 million in credit. Initial construction at the site launched in March 2023, following a court case and .
The U.S. Department of Energy (DOE) in March provided the potential for an almost US$2.3 billion loan to Lithium Americas. The company plans to fund approximately US$195 million for reserve accounts associated with the DOE by the middle of next year before starting to draw on the DOE's loan.
The plan is for the DOE loan to close in the next few weeks and then Lithium Americas and GM will confirm Thacker Pass activity by the end of the year.
Lithium Americas' share price soared 22.16 per cent today to $4.52 on the TSX. Its New York Stock Exchange shares jumped 23.22 per cent to US$3.29.
GM shares, meanwhile, jumped 2.42 per cent to US$49.01.
Lithium Americas on the Toronto and New York exchanges under the new ticker LAC after it separated its North American and Argentinean businesses into two separate public companies.
