Lithium Americas split to boost focus on Thacker Pass lithium project

Nov 3 (Reuters) - Lithium Americas Corp (LAC.TO) is splitting itself in two, a step designed to jumpstart development of its flagship North American mine while giving partner Ganfeng Lithium Co Ltd (002460.SZ) wider berth to develop South American lithium projects.

Shares of the Vancouver-based company rose nearly 6% on Thursday after the news.

The move, which had been expected, comes as the company's Thacker Pass lithium project in Nevada has yet to sign supply deals with electric vehicle makers even as nearby rivals ioneer Ltd (INR.AX) and others have inked multiple supply contracts.

While the Thacker Pass project is mired in legal proceedings, the affiliation with China-based Ganfeng had likely raised concerns among some automakers and may have posed an impediment to garnering U.S. government financial support, analysts said.

"A number of the parties looking at Thacker Pass are keenly focused on having a North American focused supply chain," said Canaccord Genuity Capital Markets analyst Katie Lachapelle.

The split, which was approved by the Lithium Americas board on Tuesday, will separate the North American and Argentine businesses into two independent companies each publicly listed in Toronto and New York by the end of next year.

Shareholders will receive shares in both companies commensurate to their existing holdings.

"We believe the value of these assets can be overshadowed by each other," Chief Executive Jon Evans told Reuters. "The split allows management teams to focus on unique challenges facing each of these assets."

Ganfeng, the largest Lithium Americas shareholder, did not respond to a request for comment about whether it would sell its stake in the North American-focused company.

Evans, who will lead the North American-focused company, said that regardless, Ganfeng's stake is likely to be diluted as part of any equity-focused financing deal the new company may undertake to fund the roughly $1 billion cost of the Thacker Pass project.

When asked why the company had not yet signed an agreement to supply an automaker or battery maker with lithium from Thacker Pass, Evans said: "Don't take our silence as lack of progress. We have a different process. It's easy to get an offtake deal, but to get one with a partnership is difficult."

The Argentina-focused company will be called Lithium International and will be focused on the Caucharí-Olaroz lithium brine project, which is expected to be online soon.

The North American-focused company is expected to retain the Lithium Americas name and remain based in Canada.

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Covers the future of energy and transportation including electric vehicle and battery technology, with a focus on lithium, copper, cobalt, rare earths and other minerals, politics, policy, etc. Previously covered the oil and natural gas, including a stint living in North Dakota's Bakken shale oil patch.

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