The joint venture will go into effect following a contribution of $25 million by SQM in exchange for a 50% ownership stake in Minera Exar S.A., a wholly owned subsidiary of Vancouver, British Columbia- based Lithium Americas. SQM’s contribution includes $15 million to repay intercompany loans between Minera Exar and LAC; the remaining $10 million will be allocated to project development. SQM and LAC intend to immediately advance a work and engineering plan, which contemplates completion of an updated defi nitive feasibility study based on an existing study for Cauchari that was completed by Minera Exar in 2012. The updated study will evaluate economic feasibility for a project with a nameplate production capacity of approximately 40,000 metric tons per year of lithium carbonate equivalent. Depending on the results, the project may be executed in stages.

John Kanellitsas, vice chairman of Lithium Americas, said, “Lithium Americas’ board has determined that SQM represents the premier partner in the world for our project. Their understanding of brine chemistries, pond and chemical plant construction, knowledge of all end-user product specifi cations, and the collaborative approach with our team were important criteria in our selection process. We believe that SQM is the world’s largest and lowest-cost producer of lithium from brines, and our board has determined that a joint venture with SQM in which we pursue a production path utilizing a proven, low-cost brine evaporation process represents the optimal course to maximize long-term value for Lithium Americas’ shareholders.”

Cauchari-Olaroz is believed to be the world’s third largest lithium brine resource and is fully permitted for immediate construction and development. The project can take advantage of existing infrastructure including a nearby natural gas pipeline, a paved international highway with direct access to Salar de Atacama and a deep sea port, fresh water on site, and reportedly, strong support from local communities and the government of Jujuy province.

Since its inception in 2009, Lithium Americas said it has invested more than C$80 million in a resource exploration and project development program which includes resource defi nition, advanced modeling, approximately 10,000 m of drilling, testing and pumping wells and 43-101 technical studies, including a defi nitive Feasibility Study completed in 2012. The 2012 DFS was based on a production capacity of 20,000 mt/y lithium carbonate and resulted in a posttax NPV of $464 million with average annual net cash fl ows of $117 million, and was based on forecast LCE average prices of approximately US$5,900, well below current world prices. The JV is targeting a production capacity of approximately 40,000 mt/y lithium equivalent in its upcoming development plan investigations.