Lithium Argentina AG Q4 FY2023 earnings call

• 2023 was a historic year for Lithium Argentina with Cauchari-Olaroz's development, construction, and now operations. The $1 billion Cauchari-Olaroz project was a result of the team's efforts.
• Cauchari-Olaroz is currently producing at approximately 50% of capacity, with a goal to operate at close to design capacity by the end of 2024. In March, it demonstrated the ability to operate at around 75% capacity for a limited period.
• Entered into a transaction on March 5 where Ganfeng agreed to invest $70 million for a ~15% stake in Pastos Grandes. The regional development plan for the Sal de province in Argentina, including Pastos Grandes (Ganfeng and Lithium Argentina) and Sal de la Puna (joint venture), is expected to be finalized by the end of 2024.
• In February and March 2024, the Puna area in Argentina experienced unusual electrical storms affecting power reliability at Cauchari-Olaroz, with efforts underway to mitigate this.

The key segment is Cauchari-Olaroz, which is in the ramp-up phase. In 2023, it transitioned from development to operations. The company also entered a transaction with Ganfeng for a 15% stake in Pastos Grandes as part of a regional development plan. No detailed revenue contribution percentages for product segments are provided in the transcript.

• 2024 production guidance for Cauchari-Olaroz is 20,000 - 25,000 metric tonnes.
• Expecting positive cash flow from operations in 2024, based on recent pricing averages (year-to-date battery quality pricing).

• Weather-related power disruptions in the Puna area of Argentina in February-March 2024 affected power reliability at Cauchari-Olaroz. These were due to unusual electrical storms, and while efforts are underway to mitigate, it was an initial risk.

Q: Can you talk about sales volumes, production guidance, and cash flow?

A: Sam Pigott mentioned 2024 production guidance is 20,000 - 25,000 metric tonnes. Alex Shulga discussed the $16 million full-year amount including LAC share of JV results and non-cash foreign exchange gain.

Q: Can you talk about weather-related power disruptions?

A: Sam Pigott said the Puna area had unusual electrical storms in February-March 2024 affecting power reliability, with efforts to mitigate.

Q: Opine on operating cost per ton and capital expenditure?

A: Sam Pigott stated costs are tied to volumes, with more details to come at steady state. Mentioned $13 million of remaining CapEx and focus on ramping up to steady-state production.

Q: Time line on ramp-up to battery grade specifications and pricing discount?

A: Sam Pigott said quality improves as production ramps up, and the pricing discount to battery grade is expected to narrow as product quality improves.

Q: Sense of cost inflation and resource constraints?

A: Sam Pigott noted reagent prices are volatile, and human capital and logistics are areas to watch with more projects coming online.

Q: Information on regional development plan?

A: Sam Pigott said Ganfeng will lead the regional development plan for the Sal de province, expected to have more info by end-2024.