v3.26.1
Department of Energy Loan Facility and Warrant Obligations
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Department of Energy Loan Facility and Warrant Obligations
4.
DEPARTMENT OF ENERGY LOAN FACILITY AND WARRANT OBLIGATIONS

The Department of Energy (the “DOE”) and the Company’s subsidiary, LN, executed a loan agreement 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 (the “DOE Loan”), to fund eligible construction costs of Thacker Pass through November 30, 2028. The DOE Loan was amended on December 20, 2024 to accommodate the formation of Lithium Nevada Ventures LLC (“Lithium Nevada Ventures”) and further amended on October 7, 2025, pursuant to an omnibus waiver, consent and amendment (as amended the “OWCA”), which reduced the expected total loan amount to $2.23 billion (reflecting estimated capitalized interest during construction of $256 million).

On January 30, 2026 (the “Issuance Date”), as required under the OWCA:

•
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”), and 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”). Each Warrant is exercisable for ten years from the Issuance Date, subject to customary anti-dilution adjustments and other terms set forth in the respective Warrants.
•
In connection with these issuances, 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 may require GM to purchase the JV Warrant (or cause the JV to do so) or, failing agreement on price, exchange it for Company common shares. GM has a corresponding call right following substantial completion of Thacker Pass.

Borrowings under the DOE ATVM Loan Program

The following table represents a reconciliation from the initial recognition of advances under the DOE Loan to June 30, 2026.

 

Principal

 

Debt Issuance Costs

 

Net Outstanding

 

Initial recognition on October 20, 2025 1

 

$

435,000

 

$

(88,362

)

$

346,638

 

Deferred interest costs

 

 

3,761

 

 

-

 

 

3,761

 

Amortization of debt issuance costs

 

 

-

 

 

588

 

 

588

 

Balance, December 31, 2025

 

$

438,761

 

$

(87,774

)

$

350,987

 

Additional advances 2

 

 

774,000

 

 

(157,224

)

 

616,776

 

Deferred interest costs

 

 

17,390

 

 

-

 

 

17,390

 

Amortization of debt issuance costs

 

 

-

 

 

2,865

 

 

2,865

 

Balance, June 30, 2026

 

$

1,230,151

 

$

(242,133

)

$

988,018

 

1 First advance in the amount of $435.0 million bearing fixed contractual interest of 4.38%, with repayment beginning in January 2029.

2 Includes second advance on February 24, 2026 in the amount of $432.0 million bearing fixed contractual interest of 4.41% and third advance on June 3, 2026 of $342.0 million bearing fixed contractual interest of 4.76%, with repayment beginning in January 2029.

Deferred financing costs of $400.2 million were recognized with the signing of the OWCA and were initially recorded as an asset on the Consolidated Balance Sheets. The deferred costs included $394.1 million relating to the fair value at inception of the LAC Warrant and the JV Warrant and $6.1 million of costs paid to obtain the debt facility. The deferred financing costs are reclassified against 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 costs over the term of the borrowing using the effective interest rate method and are capitalized to Thacker Pass. The effective interest rate after giving effect to the amortization of the portion of deferred financing costs was approximately 6.36% on the first advance, 6.45% on the second advance, and 6.89% on the third advance.

The DOE Loan contains a variety of financial and non-financial compliance covenants. In the event of noncompliance with certain covenants, the DOE has the right to terminate the facility and demand any outstanding amounts immediately due and payable. The Company was in compliance with all covenants at June 30, 2026 and December 31, 2025.

Warrant obligations

On October 7, 2025, in accordance with obligations under the OWCA, the Company recorded financial liabilities related to the LAC Warrant, the JV Warrant and the Put, Call and Exchange Agreement.

The following table represents a reconciliation from the initial recognition of the obligations pursuant to the LAC Warrant and the JV Warrant to the fair value of the warrant obligations at June 30, 2026.

 

LAC Warrant Obligation

 

JV Warrant Obligation

 

Total Warrant Obligation

 

Initial recognition on October 7, 2025

 

$

143,391

 

$

250,725

 

$

394,116

 

Gain on change in fair value

 

 

(59,595

)

 

(100,430

)

 

(160,025

)

Balance, December 31, 2025

 

$

83,796

 

$

150,295

 

$

234,091

 

Loss/(gain) on change in fair value

 

 

4,990

 

 

(9,876

)

 

(4,886

)

LAC Warrant issued

 

 

(88,786

)

 

-

 

 

(88,786

)

Balance, June 30, 2026

 

$

-

 

$

140,419

 

$

140,419

 

Obligations pursuant to the LAC Warrant

At October 7, 2025 and December 31, 2025, the obligation relating to the LAC Warrant was recorded as a financial liability, as the obligation was with respect to 5% of the Company’s total outstanding shares to be determined at a future date and, accordingly, was not considered indexed solely to the Company’s equity. The Company accounted for the LAC Warrant based on the contractual terms and agreement in principle between parties upon the execution of the OWCA on October 7, 2025. These terms were consistent with those included in the LAC Warrant subsequently executed on January 30, 2026. On January 30, 2026, as the number of common shares of the Company to be issued under the LAC Warrant was fixed, the fair value of the LAC Warrant obligation was remeasured and the resulting amount of $88.6 million (representing fair value of $88.8 million less $0.2 million of issuance costs) was reclassified to additional paid-in capital.

Obligations pursuant to the JV Warrant and the Put, Call and Exchange Agreement

At October 7, 2025, December 31, 2025 and June 30, 2026, the obligation related to the JV Warrant was recorded as a financial liability, as the obligation was with respect to 5% of the JV’s total units, as if the JV Warrant had been exercised for the underlying units to be determined at a future date and, accordingly, was not considered indexed solely to the Company’s equity. The Company accounted for the JV Warrant based on the contractual terms and agreement in principle between parties, including the put, call and conversion features therein, upon the execution of the OWCA on October 7, 2025. These terms were consistent with those included in the JV Warrant subsequently executed on January 30, 2026.

The contingent obligations of the Company and the JV arising from the Put, Call and Exchange Agreement are considered embedded in the JV Warrant. The JV’s embedded written option to settle the JV Warrant in cash is included in the fair value of the JV Warrant on the JV’s Condensed Consolidated Interim Balance Sheets, whereas the Company’s embedded written option to purchase the JV Warrant from the DOE is included in the fair value of the JV Warrant in the Company’s Condensed Consolidated Interim Balance Sheets.