40-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 40-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

☒ ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

Commission File Number 001-38350

LITHIUM AMERICAS CORP.

(Exact name of Registrant as specified in its charter)

British Columbia

(Province or other jurisdiction of incorporation or organization)

1000

(Primary Standard Industrial Classification Code Number (if applicable))

Not applicable

(I.R.S. Employer Identification Number (if applicable))

355 Burrard Street, Suite 1150,

Vancouver, British Columbia

Canada, V6C 2G8

(778) 656-5820

(Address and telephone number of Registrant’s principal executive offices)

C T Corporation System

111 Eighth Avenue

New York, New York 10011

(212) 590-9200

(Name, address (including zip code) and telephone number (including area code)

of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act:  

Title of each class	Name of each exchange on which registered
Common Shares, no par value	New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act:  Not applicable.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:  Not applicable.

For annual reports, indicate by check mark the information filed with this Form:

☒ Annual information form ☒ Audited annual financial statements

Number of outstanding shares of each of the issuer’s classes of

capital or common stock as of December 31, 2017:

88,479,107 Common Shares, no par value

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☐    No  ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).    Yes  ☒No  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act. Emerging growth company  ☒

If an emerging growth company that prepares is financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards^† provided pursuant to Section 13(a) of the Exchange Act.  ☐

^† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Registration Statement on Form 40-F and the exhibits attached hereto (this “Annual Report”) are forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are subject to risks, uncertainties and contingencies that could cause actual results to differ materially from those expressed or implied. Investors are cautioned not to put undue reliance on forward-looking statements. Applicable risks and uncertainties include, but are not limited to, those identified under the heading “Risk Factors” of the Annual Information Form for the year ended December 31, 2017 (the “2017 AIF”) of Lithium Americas Corp. (the “Company” or the “Registrant”), attached as Exhibit 99.1 to this Registration Statement, and incorporated herein by reference, and in other filings that the Registrant has made and may make with applicable securities authorities in the future. Additionally, the safe harbor provided in Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), applies to forward looking information provided pursuant to “Off-Balance Sheet Arrangements” and “Tabular Disclosure of Contractual Obligations” in this Registration Statement. Please also see “Forward-Looking Statements” on page 1 of the 2017 AIF. Except as required by applicable law, the Registrant does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events, or otherwise.

Explanatory Note

Lithium Americas Corp. is a Canadian issuer that is permitted, under the multijurisdictional disclosure system adopted in the United States, to prepare this Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in accordance with Canadian disclosure requirements, which are different from those of the United States. The Company is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act and Rule 405 under the Securities Act of 1933, as amended. Equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3 thereunder.

Resource and Reserve Estimates

The exhibits incorporated by reference into this Registration Statement have been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. Our mineral reserves and mineral resources have been calculated in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), as required by Canadian securities regulatory authorities. For United States reporting purposes, Industry Guide 7, as interpreted by the Staff of the United States Securities and Exchange Commission (the “Commission”), applies different standards in order to classify mineralization as a reserve. In addition, while the terms “measured,” “indicated” and “inferred” mineral resources are required pursuant to NI 43-101, the Commission does not recognize such terms. Canadian standards differ significantly from the requirements of the Commission, and mineral resource information contained herein and in the documents incorporated herein by reference is not comparable to similar information regarding mineral reserves disclosed in accordance with the requirements of the Commission. Investors should understand that “inferred” mineral resources have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. In addition, investors are cautioned not to assume that any part or all of our mineral resources constitute or will be converted into reserves. Accordingly, information contained in this Registration Statement and in the documents incorporated by reference herein containing descriptions of our mineral deposits may not be comparable to similar information made public by United States companies subject to the reporting requirements of United States federal securities laws and the rules and regulations thereunder.

Certifications and Disclosure Regarding Controls and Procedures.

(a) Certifications regarding controls and procedures. See Exhibits 99.5 and 99.6.

(b) Evaluation of disclosure controls and procedures. As of December 31, 2017, an evaluation of the effectiveness of the Registrant’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”)), was carried out by the Registrant’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). Based on that evaluation, the CEO and CFO have concluded that as of such date the Registrant’s disclosure controls and procedures are effective to provide a reasonable level of assurance that information required to be disclosed by the Registrant in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in United States Securities and Exchange Commission (the “Commission”) rules and forms.

It should be noted that while the CEO and CFO believe that the Registrant’s disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect the disclosure controls and procedures or internal control over financial reporting to be capable of preventing all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

(c) Management’s annual report on internal control over financial reporting and attestation report of the registered public accounting firm. This annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Registrant’s registered public accounting firm due to a transition period established by rules of the Commission for U.S. registrants who are not yet subject to the internal control over financial reporting requirements in Rule 240.13a-15 or 240.15d-15.

(d) Changes in internal control over financial reporting. This annual report does not include a discussion of changes, if any, in the Registrant’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting due to a transition period established by rules of the Commission for U.S. registrants who are not yet subject to the internal control over financial reporting requirements in Rule 240.13a-15 or 240.15d-15.

Audit Committee Financial Expert

As of the date of this Annual Report, the Company’s Audit Committee is comprised of Messrs. Cohn, Ireland and Evans, each of whom the Registrant’s board of directors (the “Board”) has determined is financially literate, meaning each such member has the ability to read and understand a set of financial statements that present a breadth and level of complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements. The Board has also determined that Messrs. Cohn, Ireland, and Evans are independent within the meaning of the listing standards of the New York Stock Exchange. In addition, the Board has determined that Mr. Cohn is an “audit committee financial expert” within the meaning of the rules of the Commission. The Commission has indicated that the designation of a person as an audit committee financial expert does not make such person an “expert” for any purpose, impose any duties, obligations or liability on such person that are greater than those imposed on members of the audit committee and board of directors who do not carry this designation, or affect the duties, obligations or liability of any other member of the audit committee or board of directors.

Code of Ethics

The Registrant’s Code of Conduct (the “Code”) applies to all directors, officers and employees of the Registrant, including the CEO and CFO. Since the adoption of the Code, there have not been any waivers, including implied waivers, from any provision of the Code. A copy of the Code can be found on the Registrant’s internet website at the following address: http://lithiumamericas.com/.

Principal Accountant Fees and Services

The information provided under the heading “Audit Committee Information - Audit Fees” contained in the 2017 AIF, filed as Exhibit 99.1 hereto is incorporated by reference herein. The Registrant’s Audit Committee approved all of the Audit-Related and Tax services provided by PricewaterhouseCoopers LLP, Chartered Professional Accountants, the Company’s independent registered public auditing firm in 2017 and 2016.  No non-audit services were approved pursuant to the de minimus exception provided by Section (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

Off-Balance Sheet Arrangements

The information provided under the heading “Off-Balance Sheet Arrangements” contained in the Registrant’s Management’s Discussion and Analysis dated March 28, 2018 for the year ended December 31, 2017, filed as Exhibit 99.3 hereto (“the MD&A”) and the information provided in notes 5 and 7 of the Audited Consolidated Financial Statements as at and for the years ended December 31, 2017 and December 31, 2016, filed as Exhibit 99.2hereto (the “Financial Statements”), are incorporated by reference herein.

Tabular Disclosure of Contractual Obligations

The information provided under the heading “Contractual Obligations” contained in the MD&A is incorporated by reference herein and the information provided in notes 5 and 7 of Financial Statements, are incorporated by reference herein.

Identification of the Audit Committee

The information provided under the heading “Composition of the Audit Committee and Independence” contained in the Annual Information Form is incorporated by reference herein.

Mine Safety Disclosure

Pursuant to Section 1503(a) of the Dodd-Frank Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose specified information about mine health and safety in their periodic reports. These reporting requirements are based on the safety and health requirements applicable to mines under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) which is administered by the U.S. Department of Labor’s Mine Safety and Health Administration (“MSHA”). During the fiscal year ended December 31, 2017, the Company and its subsidiaries were not subject to regulation by MSHA under the Mine Act and thus no disclosure is required under Section 1503(a) of the Dodd-Frank Act.

Corporate Governance

The Registrant believes that its corporate governance practices are consistent in all material respects with the applicable requirements of the corporate governance guidelines established by the Canadian Securities Administrators, the applicable corporate governance rules of the Toronto Stock Exchange and The New York Stock Exchange (the “NYSE Rules”) and the applicable rules and regulations of the Commission. Disclosure of the significant ways in which the Registrant’s corporate governance practices differ from those required of domestic companies under the NYSE Rules are available on the Registrant’s website at http://lithiumamericas.com/corporate/governance/.

EXHIBIT INDEX

Exhibit Number	Description
99.1	2017 Annual Information Form dated March 28, 2018 for the fiscal year ended December 31, 2017
99.2	Audited Consolidated Financial Statements as at and for the years ended December 31, 2017 and December 31, 2016
99.3	Management’s Discussion and Analysis dated March 28, 2018  for the year ended December 31, 2017
99.4	Consent of Independent Registered Public Accounting Firm
99.5	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the U.S. Securities Exchange Act of 1934, as amended
99.6	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the U.S. Securities Exchange Act of 1934, as amended
99.7	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.8	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.9	Consent of Qualified Person (D. Abbey), dated March 28, 2018
99.10	Consent of Qualified Person (M. King), dated March 28, 2018
99.11	Consent of Qualified Person (D. Burga), dated March 28, 2018
99.12	Consent of Qualified Person (E. Burga), dated March 28, 2018
99.13	Consent of Qualified Person (M. Rosko), dated March 28, 2018
99.14	Consent of Qualified Person (T. Sanford), dated March 28, 2018
99.15	Consent of Qualified Person (B. Smee), dated March 28, 2018
99.16	Consent of Qualified Person (Mario E. Rossi), dated March 28, 2018
99.17	Consent of Qualified Person (Rene LeBlanc), dated March 28, 2018
99.18	Consent of Qualified Person (Timothy J. Carew), dated March 28, 2018
101	Interactive Data File

UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to the securities in relation to which the obligation to file an annual report on Form 40-F arises or transactions in said securities.

The Registrant has previously filed a Form F-X in connection with the class of securities in relation to which the obligation to file this report arises.

Any change to the name or address of a Registrant’s agent for service shall be communicated promptly to the Commission by amendment to Form F-X referencing the file number of the Registrant.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.

DATED this 28^th day of March, 2018.

LITHIUM AMERICAS CORP.
By:	/s/ W.Thomas Hodgson
Name:	W.Thomas Hodgson
Title:	Chief Executive Officer

EX-99.1

Exhibit 99.1

LITHIUM AMERICAS CORPORATION

Annual Information Form

For the year ended December 31, 2017

March 28, 2018

 

TABLE OF CONTENTS

FORWARD LOOKING STATEMENTS	1
CAUTIONARY NOTICE REGARDING MINERAL RESERVES AND MINERAL RESOURCE ESTIMATES	2
DEFINITIONS AND OTHER INFORMATION	4
DEFINITIONS	4
CONSOLIDATION	5
CURRENCY	5
CORPORATE STRUCTURE OF THE COMPANY	6
NAME, ADDRESS AND INCORPORATION	6
INTERCORPORATE RELATIONSHIPS	6
GENERAL DEVELOPMENT OF THE BUSINESS	6
OVERVIEW	6
THREE YEAR HISTORY	7
DESCRIPTION OF THE BUSINESS	8
OVERVIEW OF MINERAL PROJECTS	8
RISK FACTORS	10
THE CAUCHARI-OLAROZ PROJECT	21
THE LITHIUM NEVADA PROJECT	34
THE RHEOMINERALS BUSINESS	44
COMPETITIVE CONDITIONS	45
SPECIALIZED SKILLS AND KNOWLEDGE	45
MINERAL PRICE AND ECONOMIC CYCLES	45
ECONOMIC DEPENDENCE	45
BANKRUPTCY AND SIMILAR PROCEDURES	45
REORGANIZATIONS	46
FOREIGN OPERATIONS	46
EMPLOYEES	46
ENVIRONMENTAL PROTECTION	46
SOCIAL OR ENVIRONMENTAL POLICIES	46
EMERGING MARKET DISCLOSURE	47
DESCRIPTION OF CAPITAL STRUCTURE	50
DIVIDENDS AND DISTRIBUTIONS	50
MARKET FOR SECURITIES	51
MARKET	51
TRADING PRICE AND VOLUME	51
DIRECTORS AND OFFICERS	52
AUDIT COMMITTEE INFORMATION	56
LEGAL PROCEEDINGS AND REGULATORY ACTIONS	58
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS	58
TRANSFER AGENTS AND REGISTRARS	58
MATERIAL CONTRACTS	58
INTERESTS OF EXPERTS	59
ADDITIONAL INFORMATION	59
SCHEDULE “A” DEFINITIONS	A-1
SCHEDULE “B” AUDIT COMMITTEE CHARTER	B-1

 

Forward Looking Statements

This AIF contains “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward-looking information”). These statements relate to future events or the Company’s future performance. All statements, other than statements of historical fact, may be forward-looking information. Information concerning Mineral Resource and Mineral Reserve estimates also may be deemed to be forward-looking information in that it reflects a prediction of mineralization that would be encountered if a mineral deposit were developed and mined. Forward-looking information generally can be identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “propose”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information.

In particular, this AIF contains forward-looking information, including, without limitation, with respect to the following matters or the Company’s expectations relating to such matters: capital expenditures and programs; estimates of the Mineral Resources and Mineral Reserves at its properties; development of Mineral Resources and Mineral Reserves; government regulation of mining operations and treatment under governmental and taxation regimes; the future price of commodities, including lithium; the realization of Mineral Resources and Mineral Reserves estimates; the timing and amount of future production; currency exchange and interest rates; expected outcome and timing of environmental surveys and permit applications and other environmental matters; the Company’s ability to raise capital; expected expenditures to be made by the Company on its properties; the timing, cost, quantity, capacity and product quality of production of the Cauchari-Olaroz Project, which is held and operated through the Company’s joint venture with SQM; capital costs, operating costs, sustaining capital requirements, after tax net present value and internal rate of return and sensitivity analyses; net cash flows and EBITDA of the Cauchari-Olaroz Project; the cost, timing and size of a potential expansion of the Cauchari-Olaroz Project; the completion of a preliminary feasibility study in respect of lithium production at the Lithium Nevada Project; and the development of new organoclay products and the timing, cost, quantity, capacity and product quality of sales and commercial production at the Fernley Facility.

Forward-looking information does not take into account the effect of transactions or other items announced or occurring after the statements are made. Forward-looking information is based upon a number of expectations and assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. With respect to forward-looking information listed above and incorporated by reference herein, the Company has made assumptions regarding, among other things:

• uncertainties relating to receiving mining, exploration, environmental and other permits or approvals in Nevada and Argentina;

• the impact of increasing competition in the lithium business;

• unpredictable changes to the market prices for lithium and clay-based organoclay products;

• exploration, development and construction costs for the Cauchari-Olaroz Project and the Lithium Nevada Project;

• anticipated results of exploration, development and construction activities;

 

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• the Company’s ability to obtain additional financing on satisfactory terms or at all;

• the ability to achieve production at any of the Company’s mineral exploration and development properties;

• completion of a preliminary feasibility study in respect of the Lithium Nevada Project;

• preparation of a development plan for lithium production at the Lithium Nevada Project; and

• the continued growth of demand for organoclay products or for lithium chemicals.

Although the Company believes that the assumptions and expectations reflected in such forward-looking information are reasonable, LAC can give no assurance that these assumptions and expectations will prove to be correct, and since forward-looking information inherently involves risks and uncertainties, undue reliance should not be placed on such information.

The Company’s actual results could differ materially from those anticipated in any forward-looking information as a result of the risk factors contained in this AIF, including but not limited to, the factors referred to under the heading “Risk Factors” in this AIF. Such risks also include, but are not limited to the following: volatility in the market price for minerals; uncertainties associated with estimating Mineral Resources and Mineral Reserves, including uncertainties relating to the assumptions underlying Mineral Resource and Mineral Reserve estimates; uncertainty of whether there will ever be production at the Company’s mineral exploration properties; geological, technical, drilling or processing problems; uncertainties in estimating capital and operating costs, cash flows and other project economics; liabilities and risks, including environmental liabilities and risks inherent in mineral extraction operations; fluctuations in currency exchange and interest rates; incorrect assessments of the value of acquisitions; unanticipated results of exploration activities; competition for, amongst other things, capital, undeveloped lands and skilled personnel; lack of availability of additional financing on terms acceptable to the Company and/or joint venture partners; unpredictable weather conditions; unanticipated delays in preparing technical studies; the ability to manufacture organoclay products that meets customer requirements; an increase in the costs of manufacturing organoclay products, including the costs of any raw materials used in the process; and a reduction in demand for organoclay products or for lithium chemicals. Consequently, actual results and events may vary significantly from those included in, contemplated or implied by such statements.

Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking information contained in this AIF is expressly qualified by these cautionary statements. All forward-looking information in this AIF speaks as of the date of this AIF. The Company does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. Additional information about these assumptions and risks and uncertainties is contained in our filings with securities regulators, including our most recent management’s discussion and analysis for our most recently completed financial year, which are available on SEDAR at www.sedar.com.

Cautionary Notice Regarding Mineral Reserves and Mineral Resource Estimates

The disclosure included in this Annual Information Form uses Mineral Reserves and Mineral Resources classification terms that comply with reporting standards in Canada and the Mineral Reserves and Mineral Resources estimates are made in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards on Mineral Reserves and Mineral Resources (the “CIM Definition Standards”) adopted by the CIM Council on May 10, 2014 and NI 43-101. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public

 

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disclosure an issuer makes of scientific and technical information concerning mineral projects. The following definitions are reproduced from the CIM Standards:

A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.

An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve. “Modifying Factors” are considerations used to convert Mineral Resources to Mineral Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.

A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven Mineral Reserve or to a Probable Mineral Reserve.

A Mineral Reserve is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. The reference point at which Mineral Reserves are defined, usually the point where the ore is delivered to the processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported. Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. The public disclosure of a Mineral Reserve must be demonstrated by a Pre-Feasibility Study or Feasibility Study.

A Probable Mineral Reserve is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve.

 

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A Proven Mineral Reserve is the economically mineable part of a Measured Mineral Resource. A Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors.

Unless otherwise indicated, all Mineral Reserves and Mineral Resources estimates included in this Annual Information Form have been prepared in accordance with NI 43-101. These standards differ significantly from the requirements of the SEC set out in SEC Industry Guide 7. Consequently, Mineral Reserves and Mineral Resources information included in this Annual Information Form is not comparable to similar information that would generally be disclosed by domestic U.S. reporting companies subject to the reporting and disclosure requirements of the SEC.

In particular, SEC Industry Guide 7 applies different standards in order to classify mineralization as a Mineral Reserve. As a result, the definitions of “Proven Mineral Reserves” and “Probable Mineral Reserves” used in NI 43-101 differ from the definitions in SEC Industry Guide 7. Under SEC standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Among other things, all necessary permits would be required to be in hand or issuance imminent in order to classify mineralized material as reserves under the SEC standards. Accordingly, Mineral Reserves estimates included in this Annual Information Form may not qualify as “reserves” under SEC standards.

In addition, this Annual Information Form uses the terms “Mineral Resources,” “Measured Mineral Resources,” “Indicated Mineral Resources” and “Inferred Mineral Resources” to comply with the reporting standards in Canada. SEC Industry Guide 7 does not recognize Mineral Resources and U.S. companies are generally not permitted to disclose resources in documents they file with the SEC. “Inferred Mineral Resources” have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore, investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists. In accordance with Canadian rules, estimates of “Inferred Mineral Resources” cannot form the basis of feasibility or pre-feasibility studies. It cannot be assumed that all or any part of “Mineral Resources,” “Measured Mineral Resources,” “Indicated Mineral Resources” or “Inferred Mineral Resources” will ever be upgraded to a higher category. Investors are cautioned not to assume that any part of the “Mineral Resources,” “Measured Mineral Resources,” “Indicated Mineral Resources” or “Inferred Mineral Resources” reported in this Annual Information Form is economically or legally mineable. In addition, the definitions of “Proven Mineral Reserves” and “Probable Mineral Reserves” under reporting standards in Canada differ in certain respects from the standards of the SEC. For the above reasons, information included in this Annual Information Form that describes our Mineral Reserves and Mineral Resources estimates is not comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC.

Definitions and Other Information

Definitions

For a description of defined terms and other reference information used in this AIF, please refer to Schedule “A”.

Consolidation

On November 8, 2017, the Company effected a share consolidation of its outstanding Common Shares on the basis of one Common Share for every five previously-outstanding Common Shares (the “Consolidation”). Unless noted otherwise, all references to the number of shares, warrants and stock options and their strike price and per share information in this AIF reflect the Consolidation.

 

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Currency

This AIF contains references to United States dollars and Canadian dollars. All dollar amounts referenced, unless otherwise indicated, are expressed in Canadian dollars. References to United States dollars are referred to as “US$”.

The following table sets forth the high and low exchange rates for one US dollar expressed in Canadian dollars for each period indicated, the average of the exchange rates for each period indicated and the exchange rate at the end of each such period, based upon the daily exchange rates provided by the Bank of Canada:

	United States Dollars into Canadian Dollars
	2017	2016	2015
High	$1.3743	$1.4589	$1.3990
Low	$1.2128	$1.2544	$1.1728
Rate at end of period	$1.2986	$1.3427	$1.3840
Average rate for period	$1.2545	$1.3248	$1.2787

On March 28, 2018, the rate for Canadian dollars in terms of the United States dollar, as quoted by the Bank of Canada, was US$1.00 = $1.2902.

 

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Corporate Structure of the Company

Name, Address and Incorporation

The Company was incorporated under the BCBCA on November 27, 2007 under the name Western Lithium Canada Corporation. On May 31, 2010, the Company changed its name to Western Lithium USA Corporation. The Company amended its Articles in 2013 to add advance notice requirements for the election of directors and in 2015 to give the Board the authority by resolution to alter the Company’s authorized share capital and to effect amendments to the Articles, except as otherwise specifically provided in the Articles or the BCBCA. On March 21, 2016 the Company changed its name to Lithium Americas Corp. (“LAC”). On November 8, 2017, the Company completed the Consolidation.

The Company’s head office is located at Suite 1150 – 355 Burrard Street, Vancouver, British Columbia, V6C 2G8 and its registered office is located at 2200 – 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8.

Intercorporate Relationships

The corporate structure of LAC, its material subsidiaries, the jurisdiction of incorporation of such corporations and the percentage of equity ownership are set out in the following chart:

Lithium Americas Corp.

(British Columbia)

2265866 Ontario Inc.

(Ontario)

Lithium Nevada Corporation

(Nevada)

RheoMinerals Inc.

(Nevada)

KV Project LLC

(Nevada)

Potassium S.A.

(Argentina)

Minera Exar S.A.⁽¹⁾

(Argentina)

 

100%

100%

100%

47%

3%

10%

90%

100%

 

Note:

(1) Pursuant to the JEMSE LOI, JEMSE may acquire an 8.5% equity interest in Exar, which in turn would dilute LAC’s direct and indirect interest in Exar to an aggregate 45.75%. For more information please see“The Cauchari-Olaroz Project – Property Description and Location and Access”.

General Development of the Business

Overview

LAC is a Canadian based resource company focused on advancing two significant lithium development projects, the Cauchari-Olaroz Project, located in the Province of Jujuy in Argentina, and the Lithium Nevada Project (formerly the Kings Valley Project), located in north-western Nevada, USA. LAC also

 

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owns and operates RheoMinerals Inc. (“RheoMinerals”), which manufactures and sells organoclay products used in complex oil and gas drilling and other applications, from its Fernley Facility.

Three Year History

Fiscal 2015

In December 2014, POSCO, Former LAC and Exar inaugurated a demonstration plant at the Cauchari‐Olaroz Project. The plant achieved full and continuous operating rates throughout a test period that ended in late January 2015, producing over 20 tonnes of lithium phosphate. The lithium phosphate was exported to POSCO’s facility in Pohang, Korea where it was further processed into lithium carbonate and lithium hydroxide.

In May 2015, the Company announced that it had entered into a Convertible Security Funding Agreement with an entity managed by Lind. An initial US$2.8 million was funded pursuant to the issuance of an initial convertible security.

In June 2015, the Company closed a short form prospectus financing whereby the Company issued an aggregate of 2,282,750 units at a price of $3.50 per unit, raising aggregate proceeds of approximately $8,000,000. Each unit consisted of one Common Share and one half of one Common Share purchase warrant. Each whole warrant entitled the holder to acquire one Common Share at a price of $4.50 up to June 9, 2017.

In June 2015, the Company and Former LAC entered into an arrangement agreement to combine the respective companies. The transaction was structured as a statutory plan of arrangement of Former LAC under which the Company acquired all of the outstanding shares of Former LAC in an all-stock transaction (the “Arrangement”).  

In July 2015, the Company closed the BCP SR Private Placement with BCP. Pursuant to the transaction, the Company issued to BCP subscription receipts convertible into Common Shares, while BCP deposited US$5,000,000 in escrow, to be released in two tranches upon the conversion of the subscription receipts.

In September 2015, the Company and Former LAC completed the Arrangement, which resulted in shareholders of Former LAC receiving Common Shares on the basis of 0.159 of a Common Share for each common share of Former LAC. Shortly thereafter, 552,853 subscription receipts issued to BCP pursuant to the BCP SR Private Placement were converted into 604,682 Common Shares, and US$1,500,000 was released from escrow to the Company.

Fiscal 2016

In December 2015, the Company received a US$5,000,000 line of credit from Geologic Resources Partners LLP. The line of credit was terminated in April 2016 without being drawn down.

In December 2015, BCP converted its remaining subscription receipts into 3,452,669 Common Shares and the final tranche of US$3.5 million from the BCP SR Private Placement was released from escrow to the Company.

In December 2015, the Co-Operation Agreement with POSCO lapsed.  POSCO subsequently removed its pilot plant from the Cauchari-Olaroz Project property.

In March 2016, the Company signed definitive agreements with SQM to form the Cauchari Joint Venture. Pursuant to the transaction, SQM acquired a 50% equity interest in Exar in consideration for a cash payment of US$25 million, of which US$10 million was retained by Exar to support project development

 

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and the balance distributed to LAC.  The parties’ interests are governed by the Exar Shareholder Agreement. For further information, please see “Material Contracts – Exar Shareholder Agreement”.

In May 2016, the Company retired all remaining amounts owing under the Convertible Security Funding Agreement by cash payment of US$1,653,000 to Lind.

In June 2016, the Company announced filing of an updated NI 43-101 technical report on the Lithium Nevada Project.  In the report, the authors included a Mineral Resource estimate on each of the Stage I Lens and Stage II Lens of the property, while no Mineral Reserve estimate was reported.

Fiscal 2017

In January 2017, the Company entered into Investment Agreements with each of Ganfeng and BCP that set out the terms of the Cauchari Financing Transactions. For further information, please see “Overview of Mineral Projects – The Cauchari-Olaroz Project”.

Over the course of June and July, 2017, LAC completed the Cauchari Financing Transactions with Ganfeng and BCP. Pursuant to these transactions, LAC completed mixed equity and debt financings with each ofBCPand Ganfeng. The two investors subscribed for an aggregate of 25,000,000 Common Shares at $4.25 per Common Share and provided an aggregate US$205,000,000 credit facility. In connection with these transactions, the Company entered into an investor rights agreement and off-take agreement with each of these parties.

On November 8, 2017, the Company completed the Consolidation.

Current Fiscal Year

The Company’s Common Shares began trading on the NYSE on January 25, 2018.

In February 2018, the Company filed a short form base shelf prospectus to qualify for distribution, from time to time over a 25-month period, up to US$500 million of the Company’s debt and equity securities. The Company also filed a corresponding shelf registration statement with the SEC on Form F-10 under the Multijurisdictional Disclosure System.

Trends and Outlook

LAC intends to focus its business activity in the near term on advancing of the Cauchari-Olaroz Project and the Lithium Nevada Project.  The Company intends to pursue other attractive business development opportunities in the lithium space from time to time as they arise.

DESCRIPTION OF the Business

Overview of Mineral Projects

Cauchari-Olaroz Project

Current Status of the Project

The Cauchari-Olaroz Project is owned and operated as to 50% by LAC and 50% by SQM, each holding their interest through shareholdings in Exar. In March 2017, the parties completed a mine plan and feasibility study on the Cauchari-Olaroz Project for a mining operation producing 25,000 TPA of lithium carbonate over a 40 year mine life.

 

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In 2017, Exar initiated detailed engineering work with engineering for the infrastructure scheduled to be completed in the second half of 2018, followed by plant design later this year.

Exar has also started construction activities, with earth works, roads and platforms for the wellfields well underway. As of December 31, 2017, there were more than 400 people working in Argentina, including direct employees and contractors. A camp expansion that will accommodate approximately 460 personnel during the construction phase of the project is well-advanced, with the first half already commissioned, and the remaining half scheduled to be commissioned in early April 2018. Pond layout and design is also complete. A contractor is mobilized at site and pond construction activities started in early February 2018, which should allow Exar to start filling ponds commencing in the second half of 2018.

Exar’s management committee (the “Exar Management Committee”) has recently reviewed the progress of the Cauchari-Olaroz Project development. As a result of additional work required on wellfield optimization and an updated pond construction/filling schedule, it has updated the targeted development timeline, with estimated first production commencing in 2020 rather than late 2019 as previously indicated. Further updates to the development plan may occur from time to time as work progresses.

Detailed scientific and technical information on the Cauchari-Olaroz Project can be found in a technical report that was filed with the securities regulatory authorities in each of the provinces of Canada on January 17, 2018, entitled “NI 43-101 Technical Report Updated Feasibility Study Reserve Estimation and Lithium Carbonate Production at Cauchari-Olaroz Salars, Jujuy Province, Argentina” (the “Cauchari TR”). The Cauchari TR has an effective date of March 29, 2017 and was prepared by Ernest Burga, P.Eng. David Burga, P.Geo., Mike Rosko, MSc., CPG, Barry Smee, PhD., P.Geo, Mark King, PhD., P. Geo, Daron Abbey, M.Sc., P.Geo, Tony Sanford, Pr.Sci.Nat. and Rene LeBlanc, PhD., P.Eng., each of whom is a “qualified person” for the purposes of NI 43-101.

A more detailed summary of the Cauchari-Olaroz Project and the Cauchari TR is set forth below under the heading “The Cauchari-Olaroz Project”.

Financing Transaction

In January 2017, LAC entered into the Ganfeng Investment Agreement and the BCP Investment Agreement.  These agreements established the framework of the Cauchari Financing Transactions, in which BCP and Ganfeng agreed to provide funding to LAC to cover its share of anticipated capital contributions for the development of Stage 1 of the Cauchari-Olaroz Project, as well as support working capital requirements of LAC during the project development stage.  Pursuant to these agreements, each of Ganfeng and BCP agreed to co-invest in LAC through a mixture of equity subscriptions and debt financing.

The Cauchari Financing Transactions consisted of four key components:

• An equity financing by each of Ganfeng and BCP.  Ganfeng subscribed for 15,000,000 Common Shares while BCP subscribed for 10,000,000 Common Shares at a price of $4.25 per Common Share, for gross proceeds of approximately $106,000,000.

• A US$205,000,000 syndicated credit facility, represented by the Amended Credit Facility.  Under this agreement, each of Ganfeng and BCP have committed  to advance US$125,000,000 and US$80,000,000 respectively, with proceeds to be used to fund LAC’s share of project development contributions for Stage 1 of the Cauchari-Olaroz Project.  For further information see “Material Contracts – Amended Credit Facility”. 

 

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• Off-take entitlements with each of Ganfeng and BCP for the purchase of up to 80% and 20%, respectively, of LAC’s share of Cauchari-Olaroz Stage 1 lithium carbonate production at market prices. The off-take agreements each have a term of 20 years following commencement of commercial production.

• Investor Rights Agreements. LAC entered into an Investor Rights Agreement with each of Ganfeng and BCP.  Pursuant to these agreements, Ganfeng and BCP each have the right to nominate one individual to the Board so long as they maintain a 15% or more interest, respectively, in LAC’s issued share capital.  Until March 31, 2019, each of Ganfeng and LAC have a participation right in connection with future financings to maintain a 17.5% interest and 16.4% interest respectively, so long as they maintain a 15% or more interest in LAC’s issued share capital.  For further information see “Material Contracts – Ganfeng Investor Rights Agreement” and“– BCP Investor Rights Agreement”.

The parties settled relevant agreements and satisfied all conditions over the course of the first half of 2017, and on July 14, 2017 completed the remaining equity subscriptions and entered into definitive agreements.

Lithium Nevada Project

The Lithium Nevada Project hosts a large clay-based lithium Mineral Resource, as well as significant additional clay-based lithium mineralization that has not yet been subject to sufficient exploration or analysis to undertake Mineral Resource estimation.

In 2017, LAC commenced a program to assess the mine development potential of the Stage 1 Lens, or “Zone 1” area of the Lithium Nevada Project, which hosts the primary Mineral Resource estimate on the project. LAC has engaged Advisian WorleyParsons Group to prepare a PFS for a lithium mining and production operation, has assembled an experienced management and technical team for the project, is conducting process testing and related analysis in support of the PFS and is conducting a drilling program with an objective of expanding the Mineral Resource and increasing confidence levels. LAC has targeted the end of the second quarter of 2018 for completion of the PFS.

Detailed scientific and technical information on the Lithium Nevada Project can be found in a technical report that was filed with the securities regulatory authorities in each of the provinces of Canada on January 17, 2018, entitled “Independent Technical Report for the Lithium Nevada Property, Nevada, USA” (the “Lithium Nevada TR”). The Lithium Nevada TR has an effective date of May 31, 2016, and was prepared by Timothy J. Carew, P.Geo. and Mario E. Rossi, FAusIMM, each of whom is a “qualified person” for the purposes of NI 43-101.

A more detailed summary of the Lithium Nevada Project and the Lithium Nevada TR is set forth below under the heading “The Lithium Nevada Project”.

Risk Factors

An investment in the Company’s securities is highly speculative and subject to a number of risks at any given time. The following is a description of the principal risk factors affecting the Company.

Risks related to resource development

The Cauchari-Olaroz Project and the Lithium Nevada Project may not be developed as planned.

The Company’s business strategy depends in large part on developing the Cauchari-Olaroz Project and

 

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the Lithium Nevada Project into one or more commercially viable mines. Whether a mineral deposit will be commercially viable depends on numerous factors, including: (i) the particular attributes of the deposit, such as size, grade and proximity to infrastructure; (ii) commodity prices, which are highly cyclical; and (iii) government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of Mineral Resources, environmental protection and capital and operating cost requirements. Exar has completed a feasibility study for a 25,000 TPA lithium carbonate production operation at the fully-permitted Cauchari-Olaroz Project. The Cauchari Joint Venture has also completed preparatory development work and is currently executing early construction activities, including pond construction, in accordance with the Cauchari-Olaroz Project schedule. LAC has also secured funding that it believes will be sufficient to cover its share of capital expenditure obligations for the first stage of development of the Cauchari-Olaroz Project, and believes that SQM has the financial resources necessary to cover its share. Nevertheless, Exar has not yet approved the final development plan, which requires approval of both Cauchari Joint Venture partners. Accordingly, there can be no assurance that the Company will ever develop either one of these projects. If the Company is unable to develop all or any of its projects into a commercial operating mine, its business and financial condition will be materially adversely affected.

Market prices for key end-use products will greatly affect the value of the Company and the ability of the Company to develop the Cauchari-Olaroz Project and the Lithium Nevada Project.

The ability of the Company to develop the Cauchari-Olaroz Project and the Lithium Nevada Project will be significantly affected by changes in the market price of lithium-based end products, such as lithium carbonate. The market price of these commodity-based products fluctuates widely and is affected by numerous factors beyond LAC’s control, including world supply and demand, pricing characteristics for alternate energy sources such as oil and gas, the level of interest rates, the rate of inflation and the stability of currency exchange rates. Such external economic factors are influenced by changes in international investment patterns, various political developments and macro-economic circumstances. In addition, the price of lithium products is determined by their purity and performance. A fluctuation in these product prices may affect the value of the Company and the potential value of its properties.

There are risks associated with co-ownership arrangements.

The Company and SQM share ownership of the Cauchari-Olaroz Project.  This arrangement is subject to the risks normally associated with the conduct of co-ownership structures. The existence or occurrence of one or more of the following circumstances and events could have a material adverse impact on the Company and the viability of its interest in Exar, the holding company that owns the Cauchari-Olaroz Project, which could have a material adverse impact on the Company’s business prospects, results of operations and financial condition: (i) disagreements with SQM on how to conduct development and operations; (ii) inability of the parties to meet their obligations under the relevant agreements or to third parties; and (iii) disputes or litigation between the parties regarding budgets, development activities, reporting requirements and other matters.

There is risk to the growth of lithium markets.

The development of lithium operations at the Cauchari-Olaroz Project and the Lithium Nevada Project is almost entirely dependent on the adoption of lithium-ion batteries for electric vehicles and other large format batteries that currently have limited market share and whose projected adoption rates are not assured. To the extent that such markets do not develop in the manner contemplated by the Company, then the long-term growth in the market for lithium products will be adversely affected, which would inhibit the potential for development of the projects, their potential commercial viability and would otherwise have a negative effect on the business and financial condition of the Company.

 

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There is a risk that LAC will not obtain required government permits and operations will be limited by government-imposed limitations.

Government regulations relating to mineral rights tenure, permission to disturb areas and the right to operate can adversely affect LAC. The Company may not be able to obtain all necessary licenses and permits that may be required to carry out exploration or mining at the Cauchari-Olaroz Project and the Lithium Nevada Project. Obtaining the necessary governmental permits is a complex, time‐consuming and costly process. The duration and success of efforts to obtain permits are contingent upon many variables not within the Company’s control. While LAC holds permits to construct and operate the contemplated Stage 1 of the Cauchari-Olaroz Project at a production rate of 25,000 TPA, any amendments to this mine plan or an increase in production, including a Stage 2 expansion, would need to be approved by regulatory authorities in Argentina. At the Lithium Nevada Project, the permitting process for lithium mining operations is incomplete at this time. There can be no assurance that all necessary approvals and permits will be obtained and, if obtained, that the costs involved will not exceed the Company’s prior estimates. It is possible that the costs and delays associated with the compliance with such standards and regulations could become such that the Company would not proceed with the development of the Cauchari-Olaroz Project or the Lithium Nevada Project.

There are also habitat conservation laws that affect the Lithium Nevada Project. As a result of a review conducted in 2015, the U.S. Fish and Wildlife Service determined not to list sage-grouse under the Endangered Species Act. However, the BLM finalized a land use plan amendment that helps to conserve greater sage-grouse habitat. The BLM considers the sage-grouse to be a special status species, and has designated the Lithium Nevada Project area as a Priority Habitat Management Area. On October 11, 2017, BLM published a Notice of Cancellation of Withdrawal Application and Withdrawal Proposal and Notice of Termination of Environmental Impact Study for Sagebrush Focal Areas Withdrawal in Idaho, Montana, Nevada, Oregon, Utah and Wyoming.  The Notice confirmed that the segregation from mineral entry of the Lithium Nevada Project area expired. The public lands within the Lithium Nevada Project areas are open for mineral entry.  On October 11, 2017, BLM also published notice that it intended to consider amending the land use plan amendment adopted in 2015 and initiated a public comment period.  

On June 7, 2017, the Secretary of the Interior issued Order 3353 which ordered BLM and the United States Fish and Wildlife Service and Geological Survey to review plans and programs developed by affected states, including Nevada, and the 2015 Sage Grouse Plans and related BLM Instruction Memoranda to identify modifications consistent with the multiple use policies stated in Order 3349 which implemented the Executive Order signed March 28, 2017, Promoting Energy Independence and Economic Growth, and to identify opportunities to conserve sage grouse and its habitat without inhibiting job creation and economic growth.  On December 27, 2017, BLM issued Instruction Memoranda providing guidance to BLM regarding the Sage Grouse Habitat Assessment Policy.

LAC anticipates that it will be required by BLM to implement varying stages of mitigation measures for sage-grouse habitat throughout any development of its Lithium Nevada Project. LAC understands that the BLM can impose conditions on access, project design and periods of use where needed to limit impacts to sage-grouse habitat. There is a risk that development may be subject to time delays or restrictions or mitigation measures in order to address sage-grouse habitat protection that could compromise the economic viability of future development of the Lithium Nevada Project.

There is technology risk to the development of the Cauchari-Olaroz Project and the Lithium Nevada Project.

To the Company’s knowledge, lithium carbonate has never been commercially produced from a smectite hectorite clay resource. While the Company has conducted extensive testing that has produced high quality lithium carbonate using known industry processes and equipment, the processes contemplated by

 

13

LAC for production of lithium at the Lithium Nevada Project have not yet been demonstrated at commercial scale and there is a risk that the Company will not be able to do so. With respect to the Cauchari-Olaroz Project, similar to solid rock deposits, production from brine-recovery projects may be less than in situ volume/grade-based estimates. In the case of brine-recovery projects, the primary extractability limitations are related to low permeability zones, from which brine does not readily flow. A possible analogy in solid rock deposits may be high grade zones for which recovery is not economically feasible due to surrounding lower grade materials, therefore actual production from brine-recovery projects may be less than in situ grades or quantities.

The Company may not be able to achieve and manage its expected growth.

The Cauchari-Olaroz Project is in a development stage, which will require a substantial increase in personnel and business operations. The transition of a mineral project to a development and operating stage, may place a strain on managerial, financial and human resources. The Company’s ability to succeed in these endeavours will depend on a number of factors, including the availability of working capital, existing and emerging competition and the ability to recruit and train additional qualified personnel.

There are political risks associated with the Company's foreign operations.

The Company’s properties are located in Argentina and the United States, exposing it to the laws governing the mining industry in those countries. Changes, if any, in mining or investment policies or shifts in political attitude in any of the jurisdictions in which the Company operates may adversely affect the Company’s operations or profitability. Regardless of the economic viability of the Company’s interest in the Company’s properties, and despite being beyond the Company’s control, such political changes could have a substantive impact on the Company that may prevent or restrict mining of some or all of any deposits on the Company’s properties.

Risk Associated with an Emerging and Developing Market

The Company actively operates in Argentina, which is considered an emerging market. Emerging market investments generally pose a greater degree of risk than investment in more mature market economies because the economies in the developing world are more susceptible to destabilization resulting from domestic and international developments. The Company’s operations in Argentina expose LAC to heightened risks relating to prevailing political and socioeconomic conditions which have historically included, but are not limited to: high rates of inflation; military repression; social and labour unrest; violent crime; civil disturbance; extreme fluctuations in currency exchange rates; expropriation and nationalization; renegotiation or nullification of existing concessions, licenses, permits and contracts; changes in taxation policies; underdeveloped industrial and economic infrastructure; unenforceability of contractual rights; restrictions on foreign exchange and repatriation; and changing political norms, currency controls and governmental regulations that favour or require the Company to award contracts in, employ citizens of, or purchase supplies from, a particular jurisdiction. As an example, in May 2012, the previous government of Argentina re-nationalized YPF, the country’s largest oil and gas company. There can be no assurance that the government of Argentina will not nationalize other businesses operating in the country, including the business of theCompany.  The Company has not purchased any “political risk” insurance coverage and currently has no plans to do so.

Argentinean regulators have broad authority to shut down and/or levy fines against operations that do not comply with regulations or standards. In addition to factors such as those listed above, the Company’s mineral exploration and potential future mining activities in Argentina may also be affected in varying degrees by government regulations with respect to restrictions on production, price controls, foreign exchange controls, export controls, taxes, royalties, environmental legislation and mine safety. Regardless

 

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of the economic viability of the Company’s interest in the Company’s properties, and despite being beyond the Company’s control, such factors may prevent or restrict mining of some or all of any deposits which the Company may find on the Company’s properties.

Government authorities in emerging market countries often have a high degree of discretion and at times appear to act selectively or arbitrarily, without hearing or prior notice, and sometimes in a manner that may not be in full accordance with the law or that may be influenced by political or commercial considerations. Unlawful, selective or arbitrary governmental actions could include denial or withdrawal of licences, sudden and unexpected tax audits, forced liquidation, criminal prosecutions and civil actions. Although unlawful, selective or arbitrary government action may be challenged in court, such action, if directed at the Company or its shareholders, could have a material adverse effect on the Company’s business, results of operations, financial condition and future prospects.

Companies operating in emerging markets are subject from time to time to the illegal activities of others, corruption or claims of illegal activities. Often in these markets the bribery of officials remains common, relative to developed markets. Social instability caused by criminal activity and corruption could increase support for renewed central authority, nationalism or violence and thus materially adversely affect the Company’s ability to conduct its business effectively. Such activities have not had a significant effect on the Company’s operations; however, there can be no assurance that they will not in the future, in which case they could restrict the Company’s operations, business, financial condition, results of operations and future prospects, and the value of the Company could be adversely affected by illegal activities by others, corruption or by claims, even if groundless, implicating the Company in illegal activities.

Investors in emerging markets should be aware that these markets are subject to greater risk than more developed markets, including in some cases significant legal, fiscal, economic and political risks. Accordingly, investors should exercise particular care in evaluating the risks involved in an investment in the Company and must decide for themselves whether, in the light of those risks, their investment is appropriate. Generally, investment in emerging and developing markets is suitable only for sophisticated investors who fully appreciate the significance of the risks involved.

The Company does not have any experience in putting a mining project into production.

The Company has never completed a mining development project. The future development of properties found to be economically feasible will require the construction and operation of mines, processing plants and related infrastructure and the Company does not have any experience in taking a mining project to production. As a result of these factors, it is difficult to evaluate the Company’s prospects, and the Company’s future success is more uncertain than if it had a more proven history. In addition, the Company is and will continue to be subject to all the risks associated with establishing new mining operations, including: the timing and cost, which can be considerable, of the construction of mining and processing facilities; the availability and cost of skilled labour and mining equipment; the need to obtain necessary environmental and other governmental approvals and permits and the timing of the receipt of those approvals and permits; the availability of funds to finance construction and development activities; potential opposition from non-governmental organizations, indigenous peoples, environmental groups or local groups which may delay or prevent development activities; and potential increases in construction and operating costs due to changes in the costs of fuel, power, materials and supplies.

It is common in new mining operations to experience unexpected costs, problems and delays during construction, development and mine start-up. In addition, delays in the early stages of mineral production often occur. Accordingly, the Company cannot provide assurance that its activities will result in profitable mining operations at its mineral properties.

 

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Mineral development projects are subject to operational risks.

The Company’s operations are subject to all of the risks normally incidental to the exploration for, and the development and operation of, mineral properties. The Company has implemented comprehensive safety and environmental measures designed to comply with or exceed government regulations and ensure safe, reliable and efficient operations in all phases of its business. Nevertheless, mineral exploration and exploitation involves a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Unusual or unexpected formations, formation pressures, fires, power outages, labour disruptions, flooding, explosions, tailings impoundment failures, cave-ins, landslides and the inability to obtain adequate machinery, equipment or labour are some of the risks involved in mineral exploration and exploitation activities.

Changes in government regulations may affect the Company’s development of the Cauchari-Olaroz Project and the Lithium Nevada Project.

Changes to government laws and regulations may affect the development of the Cauchari-Olaroz Project and the Lithium Nevada Project. Such changes could include laws relating to taxation, royalties, the repatriation of profits, restrictions on production, export controls, environmental and ecological compliance, mine safety and numerous other aspects of the business.

Provincial governments of Argentina have considerable authority over exploration and mining in their province, and there are Argentinean provinces where the provincial government has taken an anti-mining stance by passing laws to curtail or ban mining in those provinces. The Fraser Institutes’, Annual Survey of Mining Companies: 2017, demonstrates a significant improvement of the Province of Jujuy among mining jurisdictions on several of its measurement indices. LAC believes the current provincial government of Jujuy Province, where the Cauchari-Olaroz Project is situated, is supportive of the exploration and mining industry generally, and the project in particular, and the Company and JEMSE, the Jujuy government’s mining Company, have entered into a letter of intent whereby JEMSE will receive an 8.5% equity interest in Exar and is to pay for this interest from dividends from future profits from operations. Further evidence of this support occurred in June 2017, when senior executives from the Company, Exar and SQM attended a meeting in Buenos Aires with government officials from Argentina, including the President of Argentina, Mauricio Macri, and the Governor of the Province of Jujuy, Gerardo Morales. At this meeting, all parties reaffirmed their commitment to support the development of the Cauchari-Olaroz Project. Nevertheless, the political climate for mineral development can change quickly, and there is no assurance that such sentiment will be maintained.

Changes to environmental requirements could significantly increase the Company’s costs.

LAC must comply with stringent environmental regulation in carrying out work on the Cauchari-Olaroz Project and the Lithium Nevada Project. Environmental regulations are evolving in a manner that is expected to require stricter standards and enforcement, increased fines and penalties for non‐compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. Changes in environmental regulations and associated agency requirements could delay and/or increase the cost of exploration and development of the Cauchari-Olaroz Project and the Lithium Nevada Project.

The Company may not be insured against all risks involved in its business operations.

In the course of exploration, development and production of mineral properties, certain risks, and in particular, unexpected or unusual geological operating conditions and other environmental occurrences may occur. It is not always possible to fully insure against such risks and, even where such insurance is available, the Company may decide to not take out insurance against such risks. Should such liabilities

 

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arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the Company.

RheoMinerals’ business operations are subject to risks and hazards, such as fire and explosion. These risks and hazards may be caused by, among other things, the explosive suppression systems and technologies which will be used at the Fernley Facility to remove explosive gases. The Company maintains liability insurance in accordance with industry standards, however the nature of these types of risks is such that liabilities could exceed policy limits and the Company could incur significant costs that could have a material adverse effect on its business, results of operations and financial condition.

There is mineral tenure risk associated with the Lithium Nevada Project.

The Mining Act authorizes the Company to develop and mine the minerals on the claims that form the Lithium Nevada Project which are locatable under the Mining Act. The Mining Act does not explicitly authorize the owner of an unpatented mining claim to sell minerals that are leasable under the Leasing Act. Leasable minerals include potassium and sodium. The Interior Board of Land Appeals of the Department of the Interior has held that, under certain circumstances, the owner of an unpatented mining claim has the authority and right to process and sell minerals governed by the Leasing Act, particularly when they are by-products of the processing of minerals which are locatable under the Mining Act. This matter has not yet been definitively determined in respect of the Lithium Nevada Project.

The Company operates in a highly competitive mining industry.

The mining industry is competitive in all of its phases and requires significant capital, technical resources, personnel and operational experience to effectively compete. Because of the high costs associated with exploration, the expertise required to analyse a project’s potential and the capital required to develop a mine, larger companies with significant resources may have a competitive advantage over LAC. The Company faces strong competition from other mining companies, some with greater financial resources, operational experience and technical capabilities than LAC possesses.

The Company also plans to purchase certain supplies and retain the services of various companies in Argentina to meet its future business plans. It may be difficult to find or hire qualified people in the mining industry who are situated in Argentina or to obtain all of the necessary services or expertise in Argentina or to conduct operations on its projects at reasonable rates. If qualified people and services or expertise cannot be obtained in Argentina, the Company may need to seek and obtain those services from people located outside of Argentina, which will require work permits and compliance with applicable laws, and could result in delays and higher costs to the Company to conduct its operations in Argentina.

As a result of this competition, the Company may be unable to maintain or acquire financing, personnel, technical resources or attractive mining properties on terms it considers acceptable.

There is market risk associated with the RheoMinerals Business.

The success of RheoMinerals will depend upon its current and proposed products meeting acceptable cost and performance criteria in the marketplace. There can be no assurances that the Company’s products will meet applicable price or performance objectives or that unanticipated technical, regulatory or other problems will not occur which would result in increased costs or material delays.  The use of RheoMinerals’ organoclay products also depends in large part on the state of deep well and directional drilling to access deposits of oil and gas. In the case of certain product applications, RheoMinerals’ products compete with a number of other materials, such as polymers and other competitors of organoclay. Improvements in the technology, production, pricing or acceptance of these competitive materials relative to RheoMinerals’ products, or other changes in the industries for these competitive

 

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materials, could have a material adverse effect on the Company’s business, results of operations and financial condition.

Mineral Resources and Mineral Reserves are only estimates.

The Mineral Resource and Mineral Reserves estimates included in this AIF are estimates only. No assurance can be given that any particular level of recovery of minerals will in fact be realized or that identified Mineral Reserves or Mineral Resources will ever qualify as a commercially mineable (or viable) deposit which can be legally and economically exploited. In addition, the grade of mineralization which may ultimately be mined may differ from that indicated by drilling results and such differences could be material. Production can be affected by such factors as permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. The estimated Mineral Resources and Mineral Reserves described in this AIF should not be interpreted as assurances of commercial viability or potential or of the profitability of any future operations. Investors are cautioned not to place undue reliance on these estimates.

In addition, Inferred Mineral Resources are quoted in the Lithium Nevada TR. Inferred Mineral Resources have a great amount of uncertainty as to their existence, and economic and legal feasibility. Accordingly, there is no assurance that Inferred Mineral Resources will ever be upgraded to a higher category. Investors are cautioned not to assume that part or all of an Inferred Mineral Resource exists, or is economically or legally mineable.

The Company may face opposition to mining projects.

The Cauchari-Olaroz Project and the Lithium Nevada Project, like many mining projects, may have opponents. Opponents of other mining projects have, in some cases, been successful in bringing public and political pressure against mining projects. In the event there is opposition to Cauchari-Olaroz Project and/or the Lithium Nevada Project, the Company’s development of such properties may be delayed or prevented, even if such development is found to be economically viable and legally permissible.

The Cauchari and Olaroz salt lakes are not subject to reservoir management rules.

There are no general unitization or reservoir management rules governing the salt lakes on which the Company’s Cauchari-Olaroz Project is situated or on any of the other salt lakes at which the Company holds mining or exploration permits. Unitization is the joint, coordinated operation of a reservoir by all the owners of rights in the separate tracts overlying the reservoir. Without unitized operation of the reservoir, the “rule of capture” results in competitive drilling, extraction and production with consequent economic and physical waste, as each separate owner attempts to secure his or her “fair share” of the underground resource by drilling more and pumping faster than its neighbour. As a result, the lack of unitization and reservoir management rules on the salt lakes on which the Company operates may materially adversely affect the Company’s operations and production. Exar and Sales de Jujuy S.A. (an Orocobre subsidiary) have entered into a Joint Operation Protocol for the Olaroz and Cauchari Salt Flats designed to coordinate their activities in the area, particularly in respect of the tenements adjacent to, and between those held by each company, in accordance to the current environmental permit that each company has been granted by the Province of Jujuy authority. 

The aboriginal communities located on the Cauchari-Olaroz Project may not honour the current surface access agreements with Exar.

Exar has entered into seven agreements for surface access with the aboriginal communities located on the exploitation area of the Cauchari-Olaroz Project. Should any of the aboriginal communities decide not to honour such agreements, Exar would be required to enforce its statutory access rights under the

 

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provisions of the Argentine Mining Code; however this would be a disruptive and potentially costly process. To date, there are settled agreements covering construction and development of the Cauchari-Olaroz Project with all but two aboriginal communities. Exar is currently under advance negotiation with these two communities to finalize agreements covering development and operations. A failure to settle these agreements could disrupt the development timetable for the Cauchari-Olaroz Project. In addition, lack of surface access agreements with local communities could affect the renewal of the EIS.

Business risks

The Company has not yet achieved profitable operations and expects to incur further losses in the development of its business.

The Company’s ability to continue as a going concern is dependent upon the ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company has reported net losses and comprehensive losses for the financial year ending December 31, 2017. The Company’s business does not currently operate on a self-sustaining basis and its ability to continue as a going concern is dependent on raising additional funds.

The Amended Credit Facility contains covenants which the Company could fail to meet.

The Amended Credit Facility contains financial, operating and reporting covenants, and compliance with those covenants may increase the Company's administrative, legal and financial costs, make some activities more difficult, time-consuming or costly and increase demand on the Company's system and resources.

While the Company has not yet drawn down on the Amended Credit Facility, it expects to do so soon. The failure of the Company to comply with restrictions and covenants under its indebtedness, which may be affected by events beyond the Company's control, could result in a default under such indebtedness, which could result in acceleration thereunder and the Company being required to repay amounts owing thereunder. If the Company's indebtedness is accelerated, the Company may not be able to repay its indebtedness or borrow sufficient funds to refinance it, and any such prepayment or refinancing could adversely affect the Company's financial condition. Even if the Company is able to obtain new financing, it may not be on commercially reasonable terms or terms that are acceptable to the Company.

If the Company is unable to repay amounts owing, the lenders under its indebtedness could proceed to realize upon the security, as applicable, granted to them to secure the indebtedness. The Amended Credit Facility is secured against collateral of the Company, a realization by the lenders thereunder of any or all of the security will have a material adverse effect on the Company's business, financial condition, results of operations, cash flows and prospects and may result in a substantial reduction or elimination entirely of assets available for distribution to equity holders on a dissolution or wind-up of the Company.

The acceleration of the Company's indebtedness under one agreement may permit acceleration of indebtedness under other agreements that contain cross default or cross-acceleration provisions. Even if the Company is able to comply with all applicable covenants, restrictions on its ability to manage its business in its sole discretion could adversely affect its business by, among other things, limiting its ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that the Company believes may be beneficial to it.

Indebtedness owing under the Amended Credit Facility could have other significant consequences on the Company, including: (i) increasing the Company's vulnerability to general adverse economic and industry conditions; (ii) requiring the Company to dedicate a substantial portion of its expected cash flow from

 

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expected operations to making interest and principal payments on its indebtedness, reducing the availability of the Company's cash flow to fund capital expenditures, working capital and other general corporate purposes; (iii) limiting the Company's flexibility in planning for, or reacting to, changes in its business; (iv) placing the Company at a competitive disadvantage compared with its competitors that have less debt or greater financial resources; and (v) limiting, including pursuant to any financial and other restrictive covenants in such indebtedness, the Company's ability to, among other things, borrow additional funds or raise capital on commercially reasonable terms, if at all, enter into a reorganization, amalgamation, arrangement, merger or other similar transaction, make an investment in or otherwise acquire the property of another person, and materially amend or provide waivers or consents with respect to material contracts.

The Company will require additional funding, potentially diluting the holdings of existing shareholders or increasing financial risk through debt issuance.

The Company has limited financial resources and is subject to significant capital requirements associated with its projects. There is no assurance that the Company will be able to obtain sufficient financing in the future on terms acceptable to it. The ability of the Company to arrange additional financing in the future will depend, in part, on prevailing capital market conditions as well as the business performance of the Company. Failure to obtain additional financing on a timely basis may cause the Company to postpone, abandon, reduce or terminate its operations and could have a material adverse effect on the Company’s business, results of operations and financial condition.

A likely source of future financing is the sale of additional Common Shares, which would mean that each existing shareholder would own a smaller percentage of the Common Shares then outstanding. Alternatively, the Company may rely on debt financing and assume debt obligations that require it to make substantial interest and capital payments. Also, the Company may issue or grant warrants or options in the future pursuant to which additional Common Shares may be issued. Exercise of such warrants or options will result in dilution of equity ownership to the Company’s existing shareholders.

The Company may also sell a further interest in the Cauchari-Olaroz Project, or all or a portion of the Lithium Nevada Project or an additional royalty therein, or may also sell an interest in RheoMinerals, any of which would mean that each existing shareholder would own a smaller percentage of the Cauchari-Olaroz Project, Lithium Nevada Project or RheoMinerals, respectively.

There is intellectual property risk associated with the Company.

The Company relies on the ability to protect its intellectual property rights and depend on patent, trademark and trade secret legislation to protect its proprietary know-how. There is no assurance that the Company has adequately protected or will be able to adequately protect its valuable intellectual property rights, or will at all times have access to all intellectual property rights that are required to conduct its business or pursue its strategies, or that the Company will be able to adequately protect itself against any intellectual property infringement claims. There is also no assurance that competitors of LAC will not be able to develop similar technology, processes or know how independently, that the Company’s trade secrets will not be revealed, that the claims allowed with respect to any current or future patents pending, or patents now held, will be broad enough to protect the Company’s intellectual property rights, or that foreign intellectual property laws will adequately protect such rights. Failure of any intellectual property rights to provide protection to the Company could result in its competitors offering similar products to RheoMinerals’ organophilic clay-based products or utilizing its lithium extraction process. Any adverse outcome that the Company may experience whilst attempting to obtain, maintain or enforce its intellectual property rights could have a material adverse effect on the Company’s business, results of operations and financial condition.

 

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The Company is dependent on the expertise of consultants.

The Company has relied on, and may continue to rely on, consultants and others for mineral exploration and exploitation expertise. The Company believes that those consultants are competent and that they have carried out their work in accordance with internationally recognized industry standards. However, if the work conducted by those consultants is ultimately found to be incorrect or inadequate in any material respect, the Company may experience delays or increased costs in developing its properties.

The Company has no history of paying dividends.

LAC has not paid dividends on its Common Shares since incorporation and presently has no ability to generate earnings as its mineral properties are in the exploration stage. If the Lithium Nevada Project or the Cauchari-Olaroz Project are successfully developed, the Company anticipates that it will retain future earnings and other cash resources for the future operation and development of its business. The Company does not intend to declare or pay any cash dividends in the foreseeable future. Payment of any future dividends is solely at the discretion of the Board, which will take into account many factors including the Company’s operating results, financial conditions and anticipated cash needs. For these reasons, LAC may never pay dividends.

The success of the Company is largely dependent on a few key individuals.

The success of the Company will be largely dependent upon the performance of its key officers, consultants and employees. Failure to retain key individuals or to attract, and, if attracted, retain additional key individuals with necessary skills could have a materially adverse impact upon the Company’s success. The Company has not purchased any “key-man” insurance with respect to any of its directors, officers or key employees and has no current plans to do so.

The Company’s business is affected by fluctuations in currency exchange rates.

Business is transacted by the Company primarily in Canadian, U.S. and Argentinean currencies. Fluctuations in exchange rates may have a significant effect on the cash flows of the Company. The Argentinean peso has been subject to large devaluations and revaluations in the past and may be subject to significant fluctuations in the future. Future changes in exchange rates could materially affect the Company’s results in either a positive or negative direction. The Company’s Lithium Nevada Project and its RheoMinerals business are located in Nevada, and most of the property related expenditures, exploration and development costs are denominated in U.S. dollars. The Company’s Cauchari-Olaroz Project is located in Argentina, where certain costs are denominated in the Argentinean peso and certain costs are denominated in U.S. dollars. Appreciation of U.S. or Argentinean currency compared to Canadian currency could make property expenditures more expensive for the Company. While the Company does not engage in foreign exchange hedging, it holds a significant portion of its cash balance in U.S. currency in order to meet its US currency obligations.

Conflicts of interest may arise for certain directors and officers of the Company.

Certain directors and officers of the Company are, or may become, associated with other natural resource companies which may give rise to conflicts of interest. In accordance with the BCBCA, directors who have a material interest in any person who is a party to a material contract or a proposed material contract with the Company are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve the contract. In addition, directors and the officers are required to act honestly and in good faith with a view to the best interests of the Company.

 

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The Company’s share price is subject to market volatility.

The market price of a publicly traded stock, especially a resource issuer such as LAC, is affected by many variables in addition to those directly related to exploration successes or failures. Such factors include the general condition of markets for resource stocks, the strength of the economy generally, the availability and attractiveness of alternative investments, and the breadth of the public markets for the stock. Therefore, investors could suffer significant losses if the Company’s Common Shares are depressed or illiquid when an investor seeks liquidity.

The Company may face cyber-security risks and threats

Threats to information technology systems associated with cyber-security risks and cyber incidents or attacks continue to grow. It is possible that the business, financial and other systems of the Company or the companies in which it has invested could be compromised, which might not be noticed for some period of time. Risks associated with these threats include, among other things, loss of intellectual property, disruption of business operations and safety procedures, loss or damage to worksite data delivery systems, and increased costs to prevent, respond to or mitigate cyber-security events.

The Cauchari-Olaroz Project

The scientific and technical information regarding the Cauchari-Olaroz Project is derived from the Cauchari TR. A copy of the Cauchari TR is available on the Company’s website at www.lithiumamericas.com and on our SEDAR profile at www.sedar.com

Property Description, Location and Access

The Cauchari and Olaroz Salars are located in the Department of Susques in the Province of Jujuy in northwestern Argentina, approximately 250 km northwest of San Salvador de Jujuy, the provincial capital. The nearest port is Antofagasta (Chile), located 530 km to the west. Access is via paved National Highways 9 and 52, which connect the site to San Salvador de Jujuy and Salta in Argentina. The midpoint between the Olaroz and Cauchari Salars is located on Highway 52, 55 km west of the Town of Susques. In addition, Highway 52 connects to Paso Jama, a national border crossing between Chile and Argentina, providing connection to Chilean Route 27 and granting convenient access to Antofagasta and Mejillones, likely embarkation ports for the product. Access is possible through a gravel road (Route 70) which skirts the west side of the salars, this road is approximately one km from the plant site.

LAC holds its interest in the Cauchari-Olaroz Project through a 50% interest in Exar, with SQM holding the other 50% interest. Exar acquired title to the project through direct staking or entering into exploration and exploitation contracts with third party property owners. The claims are contiguous and cover most of the Cauchari Salar and the eastern portion of the Olaroz Salar. The area that contains the Mineral Resource and Mineral Reserve estimate is covered by mining concessions which grants the holder a perpetual mining right, subject to the payment of a fee and an agreed upon investment in accordance with the Argentine Mining Code.

On March 28, 2016, Exar entered into a purchase option agreement (“Los Boros Option Agreement”) with Los Boros for the transfer of title to Exar of certain mining properties that comprised a portion of the Cauchari-Olaroz Project. Under the terms of the Los Boros Option Agreement, Exar paid US$100,000 upon signing and has a right to exercise the purchase option at any time within 30 months for the total consideration of US$12,000,000 to be paid in sixty quarterly instalments of US$200,000. The first installment becomes due upon occurrence of one of the following two conditions, whichever comes first: (i) the third year of the purchase option exercise date; or (ii) the beginning of commercial exploitation with a minimum production of 20,000 tonnes of LCE. As a security for the transfer of title for the mining

 

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properties under the Los Boros Option Agreement, Los Boros granted to Exar a mortgage for US$12,000,000.

If Exar exercises the purchase option, the following payments and royalties will have to be paid to Los Boros:

● US$300,000 within 10 days of the commercial plant construction start date; and

● a 3% net profit interest for 40 years, payable in pesos, annually within the 10 business days after each calendar year end.

Exar can cancel the first 20 years of net profit interest in exchange for a one-time payment of US$7,000,000 and the next 20 years for additional US$7,000,000.

In October 2012, Exar entered into a letter of intent with JEMSE, an entity controlled by the Province of Jujuy, whereby JEMSE has a right, subject to certain conditions, to acquire an 8.5% equity interest in the Cauchari-Olaroz Project in consideration for US$1.00 and providing management services as required to develop the project. These management services include liaisons with the national customs authorities, with the governing bodies of the Province of Jujuy and the municipality of Susques, with the authorities of Argentina’s Central Bank to facilitate the import and export of currency, and the sourcing of local service providers and other providers for project-related matters. This right becomes operative once financing is secured to develop the project and a definitive agreement is reached. If the conditions are met and it exercises its right, JEMSE will be required to provide its pro rata (8.5%) share of the financing requirements for the construction of the Cauchari-Olaroz project.  These funds will be loaned to JEMSE by the shareholders of Exar and will be repayable out of one third of the dividends to be received by JEMSE over future years from the project. The distribution of dividends to JEMSE and other shareholders in the project will only commence once all annual commitments related to the project’s debt have been met. BCP and Ganfeng completed a financing transaction in 2017 and the parties have commenced negotiations in respect of a definitive agreement.

JEMSE would be required to cover its pro rata share of financing requirements for the construction of the Cauchari-Olaroz Project. These funds would be loaned to JEMSE by the other shareholders of Exar and would be repayable out of one-third of the dividends to be received by JEMSE from Exar over future years of the Cauchari-Olaroz Project.

The surface rights of the area subject to exploitation are owned by local aboriginal communities. Exar signed contracts with each aboriginal community to have the right to explore the property and for surface use, water use, transit, and building ponds and facilities. Most of these contracts also cover development and mining operations by Exar. For those contracts in which development and mining are not specifically addressed, Exar is working with the relevant community to extend the coverage of the contract to those areas. LAC has also agreed to support local communities through a number of infrastructure and education programs.

History

Historically, Rio Tinto has mined borates on the western side of Cauchari, at Yacimiento de Borato El Porvenir. Grupo Minero Los Boros S.A. mines a few thousand TPA of ulexite on the east side of the Olaroz Salar. No other mining activity (including lithium production) has been recorded at the properties comprising the Cauchari-Olaroz Project. LAC acquired mining and exploration permits across the Cauchari and Olaroz Salars during 2009 and 2010 and initiated lithium exploration activities over these claims during 2009.

In 2012, LAC completed an initial Mineral Reserve estimate and mine plan (the “Initial Feasibility Study”). In the Initial Feasibility Study, LAC reported that the Cauchari-Olaroz Project has Proven

 

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Mineral Reserves and Probable Mineral Reserves sufficient to operate at a production rate of up to 40,000 TPA of LCE and up to 80,000 TPA of potash for 40 years, which would include an initial five year ramp-up period. The Initial Feasibility Study included a Mineral Resource estimate for lithium, which remains current and is reported in “Mineral Resource and ReserveEstimates” below, as well as a Mineral Reserve estimate for lithium consisting of 197,000 tonnes of Proven Mineral Reserves of LCE and 2,517,000 tonnes of Probable Mineral Reserves of LCE. In the Initial Feasibility Study, LAC also reported a potassium Mineral Resource and Mineral Reserve. All Mineral Resource and Mineral Reserve estimates were dated as at July 11, 2012, and were expressed relative to a lithium grade cut-off of ≥ 354 mg/L, which was identified as a brine processing constraint.

Geological Setting, Mineralization and Deposit Types

Geology

There are two dominant structural features in the region of the Cauchari and Olaroz Salars: north-south trending high-angle normal faults and northwest-southeast trending lineaments. The high-angle north-south trending faults form narrow and deep horst-and-graben basins which are accumulation sites for numerous salars, including Olaroz and Cauchari. Basement rock in this area is composed of lower ordovician turbidites (shale and sandstone) intruded by late ordovician granitoids. It is exposed to the east, west and south of the two salars, and generally along the eastern boundary of the Puna Region.

The salars are in-filled with laminar deposits, dominated by the following five primary informal lithological units that have been identified in drill cores: (i) red silts with minor clay and sand; (ii) banded halite beds with clay, silt and minor sand; (iii) fine sands with minor silt and salt beds; (iv) massive halite and banded halite beds with minor sand; and (v) medium and fine sands.

Alluvial deposits intrude into these salar deposits to varying degrees, depending on location. The alluvium surfaces slope into the salar from outside the basin perimeter. Raised bedrock exposures occur outside the salar basin. The most extensive intrusion of alluvium into the basin is the Archibarca Fan, which partially separates the Olaroz and Cauchari Salars. Route 52 is constructed across this alluvial fan. In addition to this major fan, much of the perimeter zone of both salars exhibits encroachments of alluvial material associated with fans of varying sizes.

Mineralization

The brines from Cauchari are saturated in sodium chloride with total dissolved solids on the order of 27% (324 to 335 grams per litre) and an average density of about 1.215 grams per cubic centimetre. The other primary components of these brines include: potassium, lithium, magnesium, calcium, sulphate, bicarbonate, and boron as borates and free boric acid. Since the brine is saturated in NaCl, halite is expected to precipitate during evaporation. In addition, the Cauchari brine is predicted to initially precipitate ternadite as well as a wide range of secondary salts that could include: astrakanite, schoenite, leonite, kainite, carnalite, epsomite and bischofite.

Deposit Type

The Cauchari and Olaroz Salars are classified as “Silver Peak, Nevada” type terrigenous salars. Silver Peak, Nevada in the United States was the first lithium-bearing brine deposit in the world to be exploited. These deposits are characterized by restricted basins within deep structural depressions in-filled with sediments differentiated as inter-bedded units of clays, salt (halite), sands and gravels. In the Cauchari and Olaroz Salars, a lithium-bearing aquifer has developed during arid climatic periods. On the surface, the salars are presently covered by carbonate, borax, sulphate, clay and sodium chloride facies. Cauchari and Olaroz have relatively high sulphate contents and therefore both salars can be further classified as “sulphate type brine deposits”.

 

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Exploration

Other than drilling, the exploration programs conducted on the Cauchari-Olaroz Project area included the following:

● Seismic Geophysical Program – Seismic surveying was conducted to support delineation of basin geometry, mapping of basin-fill sequences and siting borehole locations.

● Time Domain Electromagnetic (“TEM”) Survey – TEM surveying was conducted to attempt to define fresh water and brine interfaces within the salar. The TEM survey results indicate that the method can be used to determine resistivity contrasts within the salar.

● Vertical Electrical Sounding (“VES”) Survey – A VES survey was conducted to attempt to identify fresh water and brine interfaces, and extensive fresh water occurrences. The VES results enabled the differential of the five zones on the Archibarca Fan and salar perimeter locations. The VES results are also useful for general delineation of the fresh water/brine interface on the salar boundary.

● Surface Water Sampling Program – An ongoing program is conducted to monitor the flow and chemistry of surface water entering the salars. Data acquired from this program supported the water balance calibration and numerical groundwater modelling.

● Pumping Test Program – Pumping and monitoring wells were installed and pumping tests were conducted at five locations to estimate aquifer properties related to brine recovery and fresh water supply.

● Boundary Investigation – This test pitting and borehole program was conducted to assess the configuration of the fresh water/brine interface at the salar surface and at depth, at selected locations on the salar perimeter. Data from this program were interpreted in conjunction with the VES survey and support the extension of the hydrostratigraphic model and the lithium grade interpolation to the outer boundaries of the salar and the evaluation of numerical model boundary conditions for lithium.

● Numerical Modelling – A detailed numerical evaluation of existing natural brine conditions and predicted responses to long term brine pumping was conducted to support the Mineral Reserve estimate on the property.

The above exploration initiatives along with several other programs such as surface sampling, a gravity survey, airlift testing program and the drill programs were used to support the Mineral Resource and Mineral Reserve estimates at the Cauchari-Olaroz Project as set out herein.

Drilling

Reverse Circulation (RC) Borehole Drilling

In September 2009 and August 2010, LAC conducted dual tube reverse circulation drilling to develop vertical profiles of brine chemistry at depth in the salars and to provide geological and hydrogeological data. The program included installation of 24 boreholes and collection of 1,487 field brine samples (and additional quality control samples). The sampled brines had a relatively low Mg/Li ratio, indicating that the brines would be amenable to a conventional lithium recovery process.

Diamond Drilling (DD) Borehole Program

 

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Diamond drilling at the Cauchari-Olaroz Project was conducted between October 2009 and August 2010. This program was conducted to collect continuous cores for geotechnical testing and geological characterization. The program included 29 boreholes, some of which were completed as observation wells for future brine sampling and monitoring, and collection of 127 field brine samples (and additional quality control samples).

Sampling, Analysis and Data Verification

Sampling Method

During RC drilling, rock chips and brine were directed from the drill cyclone into a plastic bag, over a one meter interval. After the field measurements were taken, the brine sample was split into three, one-litre, clean plastic sample bottles. Two samples were mixed to form one sample, which was shipped to ASA. During diamond drilling PQ or HQ diameter cores were collected through a triple tube sampler. The cores were taken directly from the triple tube and placed in wooden core boxes for geologic logging, sample collection, and storage. Undisturbed samples were shipped to D.B. Stephens & Associates Laboratory in the United States for analysis of geotechnical parameters. Brine sampling was conducted in selected DD program borehole locations. A two-valve low-flow pump was used to extract brine samples from the subsurface. After analysis of field and filed laboratory parameters, brine samples were split into three, one-litre, clean, plastic sample bottles. Two samples were mixed to form one sample, which was shipped to ASA.

Security

Samples were taken daily from the drill sites and stored at the Susques field office of Exar. All brine samples were stored inside a locked office, and all drill cores were stored inside a locked warehouse adjacent to the office. Brine samples were picked up from the Susques field office by the analytical laboratory every Friday and transported to Mendoza in a laboratory truck. Solid samples were periodically driven to Jujuy which is approximately three hours from the site. In Jujuy, solid samples were delivered to a courier for immediate shipment to the appropriate analytical laboratory.

Assaying and analytical procedure

Brine samples were analyzed by ASA, a laboratory independent from the Company. For the first six RC boreholes, sulphate was assayed using the turbidimetric method, with checking of 20% of samples using the gravimetric method. Subsequent samples were analyzed using only the gravimetric method. The argentometric method was used for assaying chloride and volumetric analysis was used for carbonates. Laboratory measurements were conducted to total dissolved solids, density and pH. D.B. Stephens and Associates Laboratory carried out selected geotechnical analyses on undisturbed samples from the geologic cores. Specific gravity was conducted for four formation samples as well as the relative brine release capacity method which is used to predict the volume of solution that can readily be extracted from an unstressed geologic sample.

Quality Assurance and Quality Control

Brine samples were bottled directly from the pumping test weirs and assayed at ASA, with some confirmatory assays done at Acme Santiago and the University of Antofagasta. Exar ran a quality control program to monitor the quality of assays from ASA, which includes the insertion of a field blank, a field duplicate, and one of two remaining standards that appear to be relatively stable. These data were compiled by Exar staff and then sent to Smee and Associates Consulting Ltd. for confirmation of the accuracy and precision of the analysis.

 

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Data verification

The QP’s responsible for the preparation of the Cauchari FS, conducted the following forms of data verification: visits to the Cauchari-Olaroz Project site and LAC corporate office; review of Exar sampling procedures, although it is noted that actual brine sampling was not viewed due to the nature of the geologic units encountered by the RC drill at the time of the site visits; inspection of original laboratory results forms for the Exar brine dataset; inspection of electronic copies of the Exar brine dataset and comparison with corresponding stratigraphic logs; review and inspection of Exar field and laboratory QA/QC results; review of publicly available information from an adjacent exploration property in Olaroz Salar; inspection of borehole logs; inspection of the Cauchari-Olaroz Project database; review of all data handling methods and procedures; inspection of original laboratory results forms for the Exar brine dataset and the Cauchari-Olaroz Project database. One brine sample was taken from PB-04 by the QP during a site visit in 2017 and analyzed at AGAT Laboratories in Mississauga, Ontario.

Mineral Processing and Metallurgical Testing

Exar conducted process testing in connection with the Initial Feasibility Study. Much of this testing was conducted at qualified laboratories and pilot facilities located at the Cauchari-Olaroz Project. In late 2010 and early 2011, Universidad de Antofagasta (Chile) determined the brine evaporation sequence. Tests conducted on a straight, CaO-treated, and CaCl₂-treated brine led to the conclusion to treat brine with CaO to reduce Mg and sulfate levels.

Evaporation pan testing at the Salar de Cauchari pilot facility provided additional data utilized in mathematical and thermodynamic models. Optimization testing of the Mg-liming process in Exar’s laboratory enhanced the accuracy of lime consumption, solids settling rate and brine purity assumptions.

Boron solvent extraction bench testing performed on terminal brine from the evaporation ponds showed that the extraction process should be performed at pH 4 using hydrochloric acid, and re-extraction at basic pH using a solution of sodium hydroxide.

At the Salar de Cauchari pilot facility, an entire sequence of ponds simulated evaporation and liming at a larger scale. Optimum manganese and sulfate reduction performance was obtained from liming midway in the evaporation process with 10% excess lime. This proved to have the lowest brine entrapment and LiKSO₄-related lithium losses.

In the LCE pilot plant, final polishing of manganese, calcium and sulfate was tested. LCE yields higher than 85% were obtained from purified brine. Carbonation temperature and reagent dose optimization testing was also performed.

Sylvinite flotation tests conducted at the Saskatchewan Research Counsel, Mining and Minerals division, established a process for the recovery of potash for commercial grade fertilizer.

Exar has completed pond layout and design. A contractor is mobilized at site and pond construction activities started in early February, which should allow Exar to start filling ponds commencing in the second half of 2018.

Mineral Resource and Reserve Estimates

A Mineral Resource and Mineral Reserve estimate for the Cauchari-Olaroz Project is summarized in the tables below for LCE. Both Mineral Resources and Mineral Reserves are reported on a 100% project equity basis. LAC no longer reports a potassium Mineral Resource on the project.

 

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Mineral Resources

The Mineral Resource estimate below is expressed relative to a lithium grade cut-off of 354 mg/L, which was identified as a brine processing constraint by LAC engineers.

Measured and Indicated Mineral Resources (July 11, 2012)
Category	Average Lithium Grade (mg/L)	Brine (m3)	Lithium Metal	LCE (tonnes)
Measured	630	9.1 x 108	576,000	3,039,000
Indicated	570	2.9 x 109	1,650,000	8,713,000
Total	585	3.8 x 109	2,226,000	11,752,000

Notes:

(1) Mineral Resources have a cut-off grade of 354 mg/L of lithium.

(2) Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resource will be converted to Mineral Reserves.

(3) LCE is calculated based the following conversion factor: mass of LCE = 5.323 x mass of lithium metal.

(4) Mineral Resources have a cut-off grade of 354 mg/L of lithium.

Mineral Reserve

Montgomery & Associates Inc. was engaged to update the Mineral Reserves in brine for various areas within the Salar de Cauchari and Salar de Olaroz in accordance with the guidelines for lithium brines set forth by CIM. The Mineral Reserve estimate was based on numerical model simulations that demonstrated a sustainable maximum production rate of over 25,000 TPA of LCE for 40 years. The Proven Mineral Reserves include brines sourced entirely within the project’s property boundaries, while 99.9% of the Probable Mineral Reserves are sourced within the project boundary. Simulated well field pumping was constrained by restricting drawdown to a maximum of 100 m at any given production well. A minimum cut-off value was not required in the Mineral Reserve estimate because average lithium concentrations after 40 years of simulated pumping decreased marginally from 713 mg/L to 695 mg/L, which is significantly above economic mineral cut-off criteria. Mineral Reserves are inclusive of reported Mineral Resources.

Proven and Probable Mineral Reserves (March 5, 2017)
Category	Time Period	Average Lithium Grade	Brine (m3)	Lithium Metal (tonnes)	LCE (tonnes)
Proven	1 - 5	712	4.9 x 107	35,159	187,000
Probable	6 - 40	695	3.5 x 108	246,474	1,312,000
Total	40	698	4.0 x 108	281,633	1,499,000

Notes:

(1) Ratios of lithium to other metals include: K:Li of 8.2, Mg:Li of 2.4, B:Li of 1.6, SO₄:Li of 28.5.

(2) LCE is calculated based the following conversion factor: mass of LCE = 5.323 x mass of lithium metal.

(3) The conversion is direct and does not account for estimated processing losses.

(4) The values in the columns on “Lithium Metal” and “LCE” above are expressed as total contained metals.

 

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The Mineral Resources reported above are inclusive of the Mineral Reserves, and not in addition to the Mineral Reserves. The Mineral Reserves of lithium described above occur in subsurface brine. The brine is contained within the pore space of salar deposits that have accumulated in a structural basin. A numerical groundwater model was developed for the central area of the basin, to support the Mineral Reserve estimate. The model simulates long term brine recovery and is based on a rigorous assembly of groundwater flow and solute transport parameters.

Overview of Mining and Production Operations

The mine plan outlined in the Cauchari TR is based on using a conventional, commercially-proven brine processing technology to produce high quality battery-grade lithium carbonate that can be used directly by battery material producers in manufacturing cathode and electrolyte for lithium-ion batteries.

The production process involves two distinct steps and is generally consistent with other established brine operations. The first step uses a solar evaporation process to concentrate lithium in the brine and precipitate competing salts in large-scale ponds. The ponds at Cauchari-Olaroz are based on SQM’s pond design criteria used in their existing Atacama operation and involve the use of shallow ponds where the precipitated salt is annually harvested from the flat pond base. The second step uses the processing facilities that transform the concentrated lithium brine into battery-grade lithium carbonate while ensuring the removal of impurities from the end-product.

The Cauchari TR sets out a production operation consisting of 25,000 TPA of battery-grade lithium carbonate for a project life of 40 years with production starting in 2020.

Mineral Extraction

In the Cauchari TR, it is contemplated that brine will be extracted from 38 production wells situated across the reserve area. A pumping rate of at least 259 m³ per day is estimated from all wells. Drawdown of the brine will amount to 100 m or less at all production wells, based on the current extraction plan. The brine extracted from the salar wells is subjected to solar evaporation in pre-concentration ponds, allowing the removal of sulphates and other unwanted salts. Next, lime is added to remove magnesium and most of the sulphates and after another concentration stage at the corresponding ponds, the concentrated lithium-rich brine is fed to the lithium carbonate plant.

Per the Cauchari TR, the pond system consists of 29 evaporation ponds segregated into the following types: (i) 18 pre-concentration ponds; (ii) 6 ponds used as Halite ponds; (iii) 2 ponds used as Sylvinite ponds; (iv) 1 pond used as a precipitates pond; and (v) 2 ponds used for lithium control. An evaporation rate of 2.52 mm per day (920 mm/year) was used as criterion to design the pond system. This rate corresponds to measured evaporation at the site where the ponds will be located. The pond orientation and placement were based on predominant wind patterns observed in the area.

Assuming the above-mentioned evaporation rate, the total evaporation area required for the production of 25,000 TPA of lithium carbonate is 1,100 ha. The ponds will be lined with a polymer-based material laid over a protective geosynthetic material and engineered granular bedding. The configuration of the ponds will include provision for uninterrupted production during salt harvesting and maintenance work. Brine will be transferred between the successive evaporation ponds using self-priming pumps.

The ponds have been designed for the efficient annual removal of salt deposits formed at the bottom of the ponds. Salt removal will be conducted using typical earthmoving machinery, such as bulldozers, front end loaders and dump trucks.

Along with lithium, the pumped brine is projected to contain significant quantities of potassium magnesium, sulfate and boron. These constituents will be removed from the brine during the extraction and evaporation process to enable effective retrieval of the lithium.

 

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Processing and Recovery Operations

Exar and its consultants subjected the brine chemistry of the deposits to a process simulation, using physicochemical properties estimation methods and process simulation techniques for phase equilibrium of solids in electrolytes (brine), specially prepared for this project. This work has been supported by the results of laboratory evaporation test work and test work at both the pilot plant and the pilot ponds.

The process route simulated for the production of lithium carbonate from Cauchari brines is outlined in a flowsheet in the Cauchari TR. Primary process inputs include water, lime, soda ash, HCl, NaOH, steam, and natural gas. The evaporation ponds produce salt tailings composed of Na, Mg, Ca, K, and borate salts. The brine concentrate from the terminal evaporation pond is further processed, through a series of polishing and impurity removal steps. Soda ash is then added with the purified brine concentrate to produce a lithium carbonate precipitate, that is dried, compacted/micronized  and packaged for shipping.

The Cauchari TR includes an operating assumption that 28 wells will be constructed and tested prior to initiation of operations, which is sufficient to allow Exar to meet production goals. Storage ponds and the recovery plant were also assumed to be fully operational at the start of the production. As a result, ramp up of pumping was not necessary and pumping at rates needed to achieve production goals was initiated at the start of production.

Operating criteria for the lithium carbonate plant is presented in the table below:

LITHIUM CARBONATE PLANT OPERATING CRITERIA
Description	Unit	Value
Lithium carbonate production	TPA	25,000
Annual operation days	days	330
Annual operation hours	hours	7,700
Availability	%	90.4
Utilization (22 hours/day)	%	97.2
Plant Overall Efficiency	%	71

Infrastructure, Permitting and Compliance Activities

Site Infrastructure and Support Systems

Natural gas will be obtained from the Rosario gas compression station, which is on the Gas Atacama pipeline, 52 km north of the project site. This pipeline is expected to be capable of supplying natural gas at capacities that are sufficient for a 25,000 TPA LCE facility, and beyond.

In the Cauchari TR, it is assumed that electricity will be provided by a new 138 kV transmission line that will interconnect with an existing 345 kV transmission line located approximately 60 km south of the Cauchari-Olaroz Project. The interconnection will require construction of a sub-station with a voltage transformer (345/138 kV) and associated switchgear. Another substation at the Cauchari-Olaroz Project site will consist of a voltage transformer (132/23 kV) and electrical room with associated switchgear and auxiliary equipment for a 23 kV local distribution system.

 

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The 23 kV local electrical distribution system will provide power to the plant, camp, PDA brine homogenizing pools/lime pumps, wells and ponds. In general, all distribution is aerial unless there are major restrictions, in which case underground distribution is adopted. The estimated load for the Cauchari-Olaroz Project is approximately 53,700 MWh/y or 8 MW/h. The Company is investigating an alternate plan in which Exar would install a power plant at site that would generate power through a combination of gas and solar energy.

The construction and permanent camps will be located approximately 300 m north of National Highway 52. The permanent camp is modelled as a full habitation and administrative complex to support all workforce activities, with a capacity for approximately 300 people. The permanent camp covers a footprint of 15,000 m² of buildings and 35,700 m² of external facilities.

Exar will need to allocate land to host waste salt deposits, which are expected to reach up to 10 m in height and cover 390 ha over a 40 year mine life. These deposits are inert, with sodium chloride and sulphate making up approximately 87% of the material, and do not introduce foreign compounds to the environment. Exar will also need to establish an evaporation pond for the plant’s industrial liquid waste, and a 20 ha area is allocated for this purpose.

The Cauchari TR also includes a description of additional infrastructure to address other essential support facilities, including fuel storage, security, access roads and water supply.

Mining and Environmental Permits

Argentina has a provincial system to manage natural resources. Therefore, the Province of Jujuy has the responsibility of providing social and environmental permits, through the Provincial Department of Mines and Energy under the Secretariat of Mining and Hydrocarbons. Other entities involved in the permitting process are Jujuy’s Provincial Department of Water Resources, the Department of Environmental Management, which has supervisory authority for environmental and natural resources and the Secretariat of Tourism and Culture, which regulates operating permits in areas of potential archaeological and paleontological interest. The Cauchari-Olaroz Salar is a Protected Area for Multiple Use (Law No. 3820/81), which allows mining activities, but has a specifically designed control system that aims to protect the local vicuña population.

Exar has completed numerous environmental studies to support the establishment of Cauchari-Olaroz’s environmental baseline. This evaluation was performed for each stage of the project: construction, operation and closure. An Environmental Impacts Report for the exploitation phase was originally presented in connection with the mine plan under the Initial Feasibility Study, and was later modified to accommodate the current mine plan.

The update to the Environmental Impacts Report for Exploitation for the Cauchari-Olaroz Project based on a 25,000 TPA rate of production and in the manner contemplated in the Cauchari TR, was approved by the relevant provincial regulatory authorities in the latter half of 2017. Exar has also received approval for the construction of the Cauchari-Olaroz Project from the agency in Jujuy tasked with assessing the impact and benefits to the province of any proposed lithium project.

Operating Costs

The operating and capital cost estimates have been reviewed and confirmed by Andeburg Consulting Services Inc. The Cauchari-Olaroz Project cost estimates are based on an exchange rate of 16:1 Argentine pesos to the U.S. dollar. The average operating costs were calculated for a facility with production of 25,000 TPA of battery-grade lithium carbonate. Additional work through engineering refinements and contract negotiation will continue in an effort to reduce the operating expenditures.

 

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Operating Costs
Category	Operating Cost (US$/t Lithium Carbonate)	% of Total
Reagents	$991	40%
Pond Harvesting & Tailing Management	$345	14%
Maintenance	$210	8%
Electric Power	$187	7%
Labour	$166	7%
Product Transportation	$135	5%
Catering, Security & Third Party Services	$97	4%
Natural Gas	$85	3%
G & A	$76	3%
Diesel	$69	3%
Consumables	$51	2%
Water Treatment System	$38	2%
Bus-In / Bus-Out Transportation	$35	1%
E & C	$10	<1%
Total Operating Costs	$2,495	100%

Capital Costs

The construction capital cost estimates are based on current Argentine costs for labor and materials. The Cauchari TR construction capital cost is estimated at US$425 million inclusive of a 15% contingency. Construction and commissioning will take approximately two years. Detailed capital cost estimates are presented in the table below and are exclusive of VAT and working capital. During construction, VAT and working capital are expected to total US$51.1 million and US$12.5 million, respectively. The VAT is refundable with an average repayment period of 2 years.

Capital Costs
Category	Capital Costs (US$ millions)
Direct Costs
Evaporation ponds	$129
Lithium carbonate plant	$121
On site infrastructure	$26
Offsite infrastructure	$41
Brine extraction wells and piping	$15
Total Direct Cost	$333
Total Indirect Cost	$37
Contingency (15%)	$55
Total Capital Costs	$425

 

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The sustaining capital requirement is estimated at an average of US$4.7 million per year (approximately US$190/tonne of lithium carbonate produced). LAC will be responsible for contributing 50% of capital expenditures for development of the project, amounting to approximately US$212.5 million.

Project Economics

The financial results are derived from inputs based on an annual production schedule included in the Cauchari TR and reported on a 100% equity project basis. The engineering and construction period is estimated at two years, while the life of mine is estimated to be 40 years. Pricing assumptions were obtained from a market study, supported by the off-take entitlements arising in favour of Ganfeng and BCP. Production of LCE is estimated at 25,000 TPA, commencing in the third year of operations assuming a ramp up rate of 24% for the first year of operations and 56% for the second year of operations. The exchange rate assumed is AR$15.9/US$.

In addition to capital and operating cost expenses as set forth above, project economics are based on additional expenses and cash flow items including: Argentinean transaction tax, Jujuy and private royalties, licenses and permits, export retentions and refunds, easement rights, equipment depreciation, sustaining capital, exploration expenses amortization and remediation allowances.

Production schedule

The production model outlines lithium carbonate production totalling 1,499,130 tonnes over the 40 year project term. Overall efficiency of brine processing to produce lithium carbonate is reported to be 71%. The net amount of lithium carbonate produced was computed by multiplying the lithium carbonate extracted from the well field by 71%. The resulting values were then summed for each production year to determine the predicted annual lithium carbonate production. The predicted average annual production rate over the 40-year period is 26,609 TPA.

In the production model, it is assumed that there is no revenue for the first two years of operation, with revenue growing to US$72,000,000 in year 3, US$168,000,000 in year 4 and US$300,000,000 in each year thereafter until the end of the 40 year production period, in reliance on the base case assumptions.

NPV and IRR

After tax NPV in reliance on base case assumptions and a 10% discount rate amounts to US$803,000,000, while internal rate of return (“IRR”) is 28.4%. Set forth below is a table that illustrates sensitivity of project economics based on lithium carbonate pricing and discount rates.

After-Tax NPV and IRR Sensitivity Analysis
Discount Rate (%)	Low Case NPV US$10,000/t Lithium carbonate (US$ millions)	Base Case NPV US$12,000/t Lithium carbonate (US$ millions)	High Case NPV US$14,000/t Lithium carbonate (US$ millions)
6%	$1,204	$1,609	2,015
8%	$807	$1,113	1,420

 

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10%	$564	$803	1,042
IRR (%)	23.5%	28.4%	33%

Cash Flow and Earnings

Net cash flow is negative in the first three years of operation, but thereafter increases sharply to approximately US$127,238,000 after taxes in year four. Thereafter, net cash flow (undiscounted) after taxes amounts to approximately US$155,000,000 in reliance on the base case assumptions. The estimated pay-back period is three years and four months before tax, and three years and five months after tax, in reliance on base case assumptions.

Set forth below is a sensitivity analysis of EBITDA over the life of the project based on lithium carbonate pricing, and otherwise in reliance on base case assumptions.

EBITDA Sensitivity Analysis
Lithium Carbonate Price (US$ 000’s)	Average Annual EBITDA(1) (US$ millions)
$6	$86
$8	$135
$10	$184
$12	$233
$14	$282
$16	$331

Note:

(1) EBITDA, earnings before interest, taxes, depreciation and amortization, is a non-IFRS financial measure which is used in the Cauchari TR to indicate the impact that changes in lithium carbonate prices would have on the cash flow of the Cauchari-Olaroz Project based on certain assumptions. The Cauchari TR does not present a corresponding sensitivity analysis based on an IFRS measure, or identify the amounts of the adjustments that would have to be made to EBITDA to reconcile it to an IFRS measure. Accordingly, a reconciliation of EBITDA to the most closely comparable IFRS measure is not available without unreasonable efforts. The future IFRS financial results for the Cauchari-Olaroz Project may vary significantly from the EBITDA amounts presented in this sensitivity analysis.

Exploration and Development

Exar commenced an exploration program on the Cauchari-Olaroz Project in the fall of 2017. Exar is focusing on three areas, with 14 drilling platforms in operation, and is drilling a total of nine production wells, as well as a number of shallow, medium and high depth observation wells. At this time, these wells are in varying states of execution or completed. Two drilling companies are mobilized and working at site.

LAC and SQM continue to refine development parameters and design of the 25,000 TPA development plan to increase efficiency of operations and reduce costs compared to that set forth in the Cauchari TR. They are also continuing to investigate a development plan for a potential increase in production on the Cauchari-Olaroz Project to 50,000 TPA of lithium carbonate.

 

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The Lithium Nevada Project

Recent Developments

As set forth above under the heading “Description of the Business – Overview of Mineral Projects – The Lithium Nevada Project”, LAC commenced a program in 2017 to assess the mine development potential of the Stage 1 Lens, or “Zone 1” area of the Lithium Nevada Project, which hosts the primary Mineral Resource estimate on the project. LAC has engaged Advisian WorleyParsons Group to prepare a PFS for a lithium mining and production operation, has assembled an experienced management and technical team for the project, is conducting process testing and related analysis in support of the PFS and is conducting a drilling program with an objective of expanding the Mineral Resource and increasing confidence levels. LAC has targeted the end of the second quarter of 2018 for completion of the PFS.

***

The scientific and technical information set out below is derived from the Lithium Nevada TR.  A copy of the Lithium Nevada TR is available on the Company’s website at www.lithiumamericas.com and SEDAR at www.sedar.com.

Property Description and Location

The Lithium Nevada Project comprises an area of approximately 15,233 ha within Humboldt County, Nevada, that is approximately 100 km north-northwest of Winnemucca and 33 km west-northwest of Orovada, Nevada. Situated in a remote section of northern Nevada, the Lithium Nevada Project consists primarily of sparsely populated ranch land within, and surrounded by, BLM lands on the northwest, western and southern sections of the McDermitt caldera. LAC holds the unpatented mining claims indirectly through Lithium Nevada and KV.

In connection with the Royalty Purchase Agreement, as amended by the Royalty Amending Agreement, Orion holds a royalty on all production from the prospective mine, which entitles them to receive an 8% gross revenue royalty payable until royalties in an amount equal to the aggregate purchase price of US$22 million have been paid, after which time the royalty will decrease to 4.0%, subject to the Company’s right to reduce the royalty rate to 1.75% at anytime on payment to Orion of US$22 million.

Additional royalties exist over: (i) the U 17-20 Claims, consisting of a net smelter return royalty of 1.5% on production from the U 17-20 Claims, that provides for an advance payment of US$1,785 annually; and (ii) the U 21-22, 24, 44, Uravada 23, 25-30, 46-56 (even), and 61-69, consisting of a net smelter return royalty of 3.0% that provides for an advance payment of US$50,000 annually, in each case advanced payments will be credited against royalty payments otherwise payable. These claims do not cover the Stage 1 Lens or Stage 2 Lens, and are not the focus of the Company’s current activities.

The Company holds a current exploration permit in good standing, and has done so in each year since 2006, and also holds all necessary federal and state permits and approvals to conduct exploration activities at the Stage 1 Lens.

A PoO was submitted to the BLM in May 2008 for an extensive drilling and trenching exploration program to further delineate the Mineral Resources of the Stage 1 Lens. That action included preparation of an environmental assessment. A revision to the PoO was filed in November 2009 and approved in January 2010.

The BLM and Nevada authorities approved a PoO and EIS, and granted authorization for the Company to develop and extract lithium bearing clay from a 110-acre area of the Stage 1 Lens.

 

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No environmental liabilities are known to exist at the Lithium Nevada Project, other than an accrued decommissioning obligation of approximately US$249,000.

Summary of Mineral Title Regime

The underlying title to the Lithium Nevada Project is held through a series of claims. LAC holds its interests in the claims indirectly through wholly-owned subsidiaries. A mining claim provides the holder with the rights to all locatable minerals on the relevant property, which includes lithium; however, this interest remains subject to the paramount title of the federal government who maintains fee simple title on the land.

The holder of a claim maintains an entitlement to the claim, provided it meets the obligations for claims as required by the Mining Act.  At this time, the principal obligation imposed on the holders of claims is to pay an annual fee, which represents payment in lieu of assessment work required under the Mining Act. The annual fee of US$155.00 per claim is payable to the BLM in addition to a fee of US$12.00 per claim paid to the county recorder of the relevant county in Nevada where the claim is located. Claim holders record annually an affidavit of payment of the fees and notice of intent to hold.

A claim does not, on its own, give the holder the right to extract and sell locatable minerals, as there are numerous other regulatory approvals and permits required as part of this process. In Nevada, such approvals and permits include approval of a plan of operations by the BLM and environmental approvals. The Mining Act also does not explicitly authorize the owner of claim to sell minerals that are leasable under the Leasing Act, which includes potassium and sodium. The BLM is vested with discretion in the management of the right to sell minerals governed by the Leasing Act, particularly where they represent a potential by-product to an economically viable mineral deposit governed by the Mining Act. LAC has initiated discussions with BLM to determine what, if any, contractual or regulatory approvals will be required to sell upgraded potassium sulfate and sodium sulfate as by-products to lithium production and to confirm LAC’s priority to such approvals, but the matter has not been determined.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

Access to the Lithium Nevada Project is via a paved highway running approximately 70 km north from Winnemucca to Orovada and then heading west-northwest for 33 km on a paved highway toward Thacker Pass to the project area. On-site access is via numerous gravel and dirt roads. Roads are all season and in generally good repair, but may be closed for short periods due to extreme weather in the winter. The nearest railroad access is in Winnemucca. Elko, 264 km east of Winnemucca, and Reno, 264 km southwest of Winnemucca (both on U.S. Highway 80), offer commercial air service.

Northern Nevada has a high desert climate with cold winters (average minimum -3°C in January) and hot summers (up to 35-40°C). Snow is expected from October to May, although it typically melts quickly. Nearby mining operations operate continuously throughout the winter. Elevations in the Stage 1 Lens area are 1,434 m to 1,624 m and in the Stage 2 Lens are 1,524 m to 2,150 m. Vegetation consists of sagebrush and grasslands at all elevations

Due to the large-scale gold mining industry in the Winnemucca area, local resources include all of the amenities required for large-scale mining. There are several gold and copper mines in the area, providing an experienced work force and adequate support for mining operations. Most of the workers for any future mining operations would likely need to be sourced in Winnemucca because of the sparse population in the project area.

There is currently a 115 kilovolt power line that passes through the project area. Water is available in the region and water rights have been obtained and can be sourced from the adjacent Quinn River Valley

 

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which is in the same watershed basin as the project site. An independent groundwater study has been completed by Schlumberger Water Services. There is sufficient space within the project area to accommodate the processing plant and mine support facilities, overburden placement site, anticipated dry tailings storage facility, the limited wet tailings storage facility, water diversions and containments.

History

The claims constituting the Lithium Nevada Project were previously held by Chevron, which began exploration for uranium in the McDermitt caldera area in 1975. Early in Chevron’s program the USGS alerted Chevron to the presence of anomalous concentrations of lithium associated with the caldera. Chevron’s activities continued into 1978 and 1979 with a drilling program that evaluated the thickness of the clays, obtained samples of the clay for engineering analysis, and further investigated the lithium resource potential. From 1980 to 1987, Chevron continued to drill holes on lithium targets and conducted extensive metallurgical testing of the hectorite deposits to determine amenability of the deposits to extraction of lithium.

Chevron leased many of the claims that comprise the Lithium Nevada Project to J.M. Huber Corporation in 1986. In 1991, Chevron sold its interest in the claims to Cyprus. In 1992, J.M. Huber Corporation terminated the lease and it appears that Cyprus allowed the claims to lapse and provided much of the exploration data to Jim LaBret, one of the claim owners from which they had leased claims.

WEDC leased Mr. LaBret’s claims in 2005, at which time he provided WEDC access to the Chevron data and to core and other samples that were available. WEDC also staked 1,643 federal lode claims covering the area that was prospective for lithium, but subsequently dropped 320 of them. WEDC then compiled the Chevron exploration data and commenced preliminary marketing studies.

On December 20, 2007, Lithium Nevada entered into a lease with WEDC. Lithium Nevada conducted a drill program on Stage 1 Lens from late 2007 to May 2008 and completed an initial Mineral Resource estimate on the property. This was followed by metallurgical testing and completion of a preliminary assessment on the Stage 1 Lens that was disclosed in January 2010.

On March 11, 2011, the Company acquired title to the royalties and titles constituting substantially all of the Lithium Nevada Project pursuant to a purchase and sale agreement with WEDC.

On December 14, 2011, the Company announced the results of the 2012 PFS for the mining of the Stage 1 Lens production of lithium carbonate. Two scenarios were evaluated: a start-up scenario based on mining and processing ore at a design throughput rate of 2,100 tonnes per day (13,000 TPA lithium carbonate), and a full production scenario to double production four years after start-up (26,000 TPA lithium carbonate).

In 2016, the Company completed a pilot plant program at its demonstration plant in Germany. This work has increased the Company’s understanding of the processing and engineering requirements for the production of lithium products from the Lithium Nevada Project. Considering the recent results, the Company has determined that additional specific engineering work will be required to optimize the front end of the process to produce lithium hydroxide monohydrate on a commercial scale. In addition, the Company has become aware of recent technological advancements in producing lithium compounds from brines, and believes these innovative and sustainable technologies warrant further review for potential incorporation into the Nevada processing plant design. As a result of these additional reviews, the Company determined that its pre-feasibility study completed in March 2012 was no longer current, and on June 22, 2016, the Company completed the Lithium Nevada TR disclosing only Mineral Resource estimates on the property.

 

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Geological Setting

The Lithium Nevada Project is located in the McDermitt caldera, a well-preserved Miocene collapse structure in north-western Nevada and southern Oregon. Because of the good exposures and preservation of the caldera complex, the area has been the focus of significant research activity over several decades by the USGS.

Volcanic activity began approximately 27 million years ago with eruption of interlayered basaltic, andesitic, and dacitic flows and tuffs. The volcanic units were deposited on a basement of Cretaceous granitic rocks with significant topographical relief. Explosive rhyolitic volcanism began approximately 18.7 million years ago and resulted in formation of a number of extensive ignimbrites (ash flow tuffs) and resultant nested calderas. The rhyolites of the McDermitt caldera are anomalous in lithium and mercury and slightly anomalous in uranium when compared to average rhyolite. Lithium reaches 300 ppm in both ignimbrites and glassy tuffs, approximately six times greater than average rhyolite. Volcanic activity concluded by resurgence of the central part of the caldera, intrusion of rhyolite into the ring fracture zones around the caldera, and formation of a “moat” between the topographic wall of the caldera and resurgent dome in the center of the caldera. This moat then filled with volcaniclastic sedimentary rocks in a lacustrine environment. Hydrothermal alteration of the volcaniclastic sedimentary rocks or other processes produced hectorite and possibly other lithium-bearing minerals within the moat-filling sediments.

Chemical analysis of the unit showed that it is peralkaline rhyolite. Between 18 and 15.8 million years ago, four additional large-volume ignimbrites formed by eruptions. Most were peralkaline rhyolites with a total thickness of approximately 560 m. Each of these ignimbrite eruptions caused caldera collapse which formed a complex of nested calderas. The best-preserved caldera is in the extreme southern part of the complex and is informally known as the Calavera caldera which is nearly circular and approximately 18 km across.

Within the local geology are the five clay-based lenses that form the Lithium Nevada Project. The important rock type is a lithium-rich claystone that may be the product of intense hydrothermal alteration of volcaniclastic rocks or the product of clay formation in the bottom of an alkaline lake. The general continuity and geometry of the deposits has been defined by drilling in all five areas on about 500 m centers. Drilling at the Stage 1 Lens has confirmed continuity of the mineralization to as close as 60 m.

The Stage 1 Lens is the southernmost and smallest of the mineralized lenses in the area. The lens is composed of an approximately 3 to 5 m thick layer of alluvium underlain by lithium enriched interbedded claystones, ash-rich clays and ash layers up to 60 to 90 m thick in the northwest and southwest ends of the project area. These claystone-ash layers thin in the middle of the proposed pit coinciding with faulting and a predominance of brown-black basalts. Shallow interbedded basalts occur in the northwest end of the pit and are found deeper in the southeast end. The lithium-rich beds with higher lithium concentrations (>4,000 ppm) are generally found deeper in the deposit (below 30 m). The base deposit varies across the project area averaging between 68 to 90 m and is marked by an obvious transition to an oxidized silicified claystone and ash layer.

The Stage 2 Lens mineralized beds are comprised mainly of a dark green claystone, at times intercalated with arkose beds and, in the North-East region of the modelled area, a conglomerate body. Lithium-rich beds are generally 10 to 60 m thick in most areas. LAC’s drilling shows that the average thickness of lithium mineralization is thicker than that indicated by Chevron data, because, as was the case in the Stage 1 Lens, some of the Chevron holes stopped in mineralization.

 

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Lithium Mineralization

The primary minerals of interest are lithium-rich smectite and illite clays. The lithium grade in the clays show a correlation with depth, typically peaking in grade between 45 and 65 m depth. The depth and grade also correlates well with the gradual transformation of clays from smectite to illite facies. This clay transformation process is a result of hydrothermal alteration of the deposit. Other elements, such as potassium, rubidium and fluorine have statistical correlations with the lithium grade. Mineralogically, clays associated with analcime-potassium feldspar contains the highest concentrations of lithium. In the McDermitt caldera, an analcime-potassium feldspar zone occurs along the western edge. Here clay beds are 30 or more m thick and contain as much as 0.65% lithium. This area hosts the Lithium Nevada Project. The multiple lithium-bearing clay beds in this area are reasonably well indurated and uniformly light to dark green. The Stage 1 Lens is the southernmost lens, in the area of interest.

Exploration drilling by the Company in the Stage 1 Lens has resulted in identifying clay-rich sequences with lithium concentrations exceeding those in previous studies. The overall weighted average concentration for clays and clay/ashes is roughly 0.25% in the project area. However, if only clay, clay/ash and ash intervals exhibiting 0.4% or more are considered, then the average concentration is between 0.5% and 0.6% for clay intervals and 0.4% and 0.5% for ash and clay/ash intervals.

At the Stage 2 Lens, mineralization is continuous over significant areas and appears to be thicker than other areas based on recent drilling, with most of the modeled area hosting 50 m or more of lithium mineralization above 1,000 ppm. The average grade for intercepts greater than 1,000 ppm is about 2,565 ppm with maximum grades in excess of 4,000 ppm lithium. Three to seven m of alluvium cover much of the deposit.

Exploration

Exploration on the Lithium Nevada Project has focused on geological mapping to delineate the limits of the moat volcanoclastic sedimentary rocks and drilling to determine the grade and location of mineralization. Much of the area has been covered by airborne gamma ray spectrometry, but those data are not pertinent to exploration for lithium. Initial exploration in the region began with a focus on uranium, but switched primarily to lithium in the late 1980s when Chevron still controlled the mining interests. There is no record of other exploration in the project area.

Claim surveying was performed by third party consultants using theodolites and laser-source electronic distance meter to survey the claims. LAC used a Trimble differential GPS to survey collar locations.

In addition to drilling, the Company developed two test pits on the Stage 1 Lens in January 2010 to obtain large bulk samples for metallurgical test work. A total of 15 samples were collected for assay. Intervals were selected to make a composite which would approximate the ore body. These composites were shipped to the Outotec GmbH facility in Germany for test work.

The topographic surface of the project area was mapped by aerial photography at 0.35 m resolution in 2010 using third party consultants. This information was obtained by MXS, Inc. for LAC. The flyover resolution was 0.35 m. Ground control and field surveys of drill hole collars, spot-heights and ground-truthing were obtained using Trimble equipment.

In August 2013, the Company announced that it had completed the excavation of a bulk sampling site to produce and test RheoMinerals’ organoclay products at its Fernley Facility. The target clay lens was encountered, as expected, at a depth of approximately three m below an alluvial surface layer comprised primarily of silt, sand and gravel. The clay lens measured approximately two to three m in thickness and was continuous across the approximate 25 by 30 m area of excavation. The viscosity gel results

 

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(overnight Fann test) indicated good gelling characteristics in order to meet American Petroleum Institute guidelines. The clay was of high purity and amenable to producing an organoclay using a dry processing method.

Drilling

LAC drilled 51 core holes on the project area between 2007 and 2009 to expand on Chevron’s drilling work. These holes were drilled with the primary aim of defining lithium occurrences in and the geology of the deposit. LAC drilled 37 core holes for assay and lithologic information and five RC holes to compare drilling techniques. The RC method produced biased assay results in the Stage 2 Lens area so the method was abandoned. Seven PQ-sized holes were drilled to support metallurgical test work. Two sonic holes were drilled to test the drilling procedure.

LAC conducted another drill campaign at the Stage 1 Lens in January 2010, drilling an additional 161 holes to support Mineral Resource estimation. The drill hole spacing was prescribed by the geostatistical methods which included variography to determine optimal spacing for inclusion in inferred, indicated and measured categories. The geologic model included a total of 197 holes and a total length of approximately 18,500 m, Chevron drill holes were excluded from the model. All drill holes included in the Mineral Resource estimate were drilled essentially vertically (88.8 to 90 degrees) with the exception of one hole, which was drilled at 70 degrees. All mineralization thicknesses recorded in boreholes are treated as true thicknesses.

A total of 38 additional HQ (63.5 millimeter) diameter core holes were drilled by LAC in the Stage 2 Lens area during 2009, and two of the Chevron core holes were re-analyzed by LAC, showing grades for all four elements of interest, lithium, potassium, sodium and fluorine.

LAC also analysed drill core from Chevron, although data from these holes was not included in the geological model used for Mineral Resource estimation.

Sampling, Analysis and Data Verification

Drilled core was brought to the core shed from the field; the boxes of core were logged, photographed, cut and sampled by Company employees and consultants. The length of the assay samples was determined by the geologist by lithology and averaged 1.46 m. The core was cut in half with diamond blade saws and the right half bagged for sampling. For duplicate samples, one half of the core is cut in half again and the two halves are bagged and sampled separately to test sampling and assay precision. Each sample was assigned a unique identification number to ensure security and anonymity. Randomly inserted in the sample stream were QA/QC samples, which represent 11% of the total assays. The QA/QC samples include blanks to test for contamination, high and low grade lithium standards to test for accuracy and duplicates to test for precision.

Drilled core samples from the Stage 1 Lens drill program were primarily sent to ALS of Reno, Nevada. The samples were picked up by ALS in trucks that arrive from Winnemucca or are delivered to ALS by LAC employees. At ALS, the samples were dried at a maximum temperature of 60 degrees Celsius and the entire sample was then crushed with a jaw crusher to 90% passing a ten-mesh screen. Nominal 250 gram splits were taken for each sample using a rifle splitter. This split is pulverized using a ring mill to 90% passing a 150-mesh screen.

ALS’ analysis included four-acid digestion and inductively coupled atomic emission plasma spectroscopy to ensure that elevated metal concentrations were not present which would interfere with inductively coupled plasma mass spectroscopy analyses.

 

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Approximately 6% of the QA/QC samples did not conform to the established criteria. The Company re-assayed the highest 16 lithium values for drill holes LAC-01 through LAC-37 and LAC-40 through LAC-200. Following this re-testing, it was concluded that the overall deposit estimates may be lower by at most 2-3%, which is considered within industry standards.

The QP who conducted the review of the Stage 1 sampling program recommended changes be adopted for future drilling programs, including: checking coarse duplicates (after first crush, usually 10 mesh material); sending pulp and coarse duplicates to a second laboratory; adding a standard in the 1,500 to 2,500 ppm Li range (to ensure adequate accuracy around the presumed economic cut-off grades); and adding a potassium standard (obtained from the Stage 1 Lens area). The QP also recommended that the protocols and procedures for QA/QC be compiled and made part of an overall QA/QC document for the project, to include field sampling practices, sample preparation and assaying protocols, laboratory QA/QC and database validation.

Sampling of drill core from the Stage 2 Lens was substantially similar to the process used in the Stage 1 Lens.

The Company did not employ significant security measures on its samples, apart from restricting handling to employees and designated consultants before delivering to ALS, because a significant amount of lithium would need to be inserted to have an effect on results and this was deemed unlikely. Likewise, the bulk nature of the commodities under analysis meant the risk of theft was very low. Nevertheless, the QP recommend that all future sampling programs employ an expanded sample security protocol that includes formal chain of custody documentation. The security procedures should form part of a larger QA/QC program to ensure consistent practices along the entire sequence of processes, from the field to the building of the electronic database.

For Mineral Resource estimation purposes, the QP compiled an assay and lithological database from assay compilations and summary geological logs supplied by LAC, in spreadsheet format. LAC maintains a tracking chart (Excel spreadsheets) that is used to match analytical data from ALS (provided electronically in the form of both Excel spreadsheets, and secured PDF assay certificates) to the intervals logged by the geologists, and referenced to duplicate sample tags stapled into the core boxes. LAC also maintains a master chart to track and manage QA-QC samples and the data provided to the QP was excerpted from this database. The QP obtained the certified assay certificates for a sample of 10% of the assay intervals, chosen at random, for comparison with the assay data imported into the resource database. No discrepancies were noted in this comparison exercise. Only a relatively small number of inconsistencies in intervals in the import and data validation process were detected, which were well below 1% of the total intervals and were corrected with LAC.

Mineral Processing and Metallurgical Testing

LAC has continued process development, including bench and pilot size programs for major unit operations, and verification for lithium extraction from the Lithium Nevada clay deposits and advanced the previous work reported in the PAEE. The process was originally based on the USBM work in the McDermitt caldera reported in 1988. The metallurgical testwork commissioned by LAC for the 2012 PFS included programs specific to calcination and the evaporative crystallization process.

Following size reduction, the thermal ore preparation process involved calcining the ore mixed with anhydrite and dolomite to produce soluble sulfates for leaching. Recoverable metals included lithium, potassium and sodium. The calcine was leached in water recovering the sulfates to solution.

The wet recovery process included evaporation and crystallization stages to recover potassium and sodium as sulfates along with lithium as a carbonate, a material suitable for battery manufacture.

 

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The 2012 PFS concluded that it would be necessary to perform a continuous small pilot scale operation. Accordingly, LAC built a demonstration plant to prove the process and demonstrate continuous production for the manufacture of battery grade lithium carbonate from the hectorite clay.

Hazen Research, Inc. in Golden, Colorado was contracted by LAC to continue process development, define process parameters for calcining and lithium carbonate production, and adapt the process to semi-continuous operation.

As a general conclusion, the testing completed so far indicates that LAC can produce high purity and high quality lithium product for use in multiple types of lithium ion battery chemistries. In February 2014, the Company announced it had initiated its planned demonstration plant in Germany to demonstrate the viability of low cost lithium extraction from its Lithium Nevada Project. In April 2014, procurement of equipment for the lithium demonstration plant commenced and in September 2014, the demonstration plant was commissioned. Commencing in mid-October 2014 operations were underway to confirm equipment performance at design conditions. In September 2014, the calcination section of the plant successfully produced enough feed for the lithium extraction plant to operate until mid-December. In this first demonstration campaign, refined lithium carbonate was produced with a purity of 99.8%.  In the fall, 2015, a second campaign consisting of 46 tonnes of oxidized clay ore was granulated with reagents and calcined at the IBU-tec kiln facility and subsequently shipped to the Company’s demonstration facility at K-Utec for leaching, crystallization and precipitation.  The second campaign leaching commenced on November 9^th, 2014, and successfully ran continuously. Approximately 38 tonnes of calcined material have been leached to produce a pregnant leach solution (“PLS”). The PLS has been purified and lithium carbonate and glasserite has been produced. Initial leaching results show recoveries that are the same or better than the design criteria.  

In August 2016, a third demonstration campaign was conducted for processing ore into calcined material at IBU-tec’s kiln facility. This most recent campaign enabled confirmation of the process parameters, characterization of the off-gas produced from the process, and generation of additional calcine material for further test work. In parallel, the engineering firm Hatch was hired to conduct a conceptual study on how the process could be optimized for producing lithium hydroxide monohydrate as the final product. The Hatch study prompted the Company to explore and revisit alternative process concepts that could lead to both a reduction in costs and environmental footprint. Modeling and bench scale testing is currently underway to demonstrate the viability of these alternative process concepts.

Mineral Resource Estimates

Stage 1 Lens (PCD Lens) Resources

The Company engaged Reserva to provide a block-model based Mineral Resource estimate for the Stage 1 Lens. The Mineral Resource estimate was made from a three-dimensional block model using commercial mine planning software (Gemcom GEMS®) and was developed with the Company drillholes available as of June 28, 2011, at which time the Company had drilled and assayed 199 core holes, totalling 19,563 m. The Mineral Resources are presented using a range of lithium cut-off values. Reserva believes, at a 3,200 ppm (0.32%) lithium cut-off, the Stage 1 Lens has reasonable prospects for economic extraction by open-pit mining. Lithium carbonate is the primary product, with potassium sulfate and sodium sulfate as by-products.

Volcanoclastic moat sedimentary rocks that contain lithium-rich claystone control the Stage 1 Lens mineralization. Sectional interpretations were generated from drill logs for alluvium, claystone (moat sediments), volcanics and basalt, a silicified unit, and bedrock. Two oxidation surfaces were also interpreted, one just below alluvium and another near the claystone/silicified interface. Additionally, a series of faults have been interpreted based on the drill hole data and incorporated into the geologic

 

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interpretation. The potentially economic mineralized estimation domain is the claystone. The alluvium and bedrock material have no lithium or potassium grades.

The Mineral Resources for the Stage 1 Lens have been classified as “Measured Mineral Resources”, “Indicated Mineral Resources” and “Inferred Mineral Resources” as defined by CIM Definition Standards. The Mineral Resources are presented in the table below in accordance with the following criteria:

● Measured Mineral Resources are in blocks estimated using at least three drill holes and five composites within a 100 m × 75 m search radius in the horizontal plane and 10 m in the vertical direction;

● Indicated Mineral Resources are in blocks estimated using at least two drill holes and five composites within a 200 m × 150 m search radius in the horizontal plane and 20 m in the vertical direction; and

● Inferred Mineral Resources are blocks estimated with at least three composites within a search radius of 300 m × 225 m in the horizontal plane and 30 m in the vertical plane.

Mineral Resource Statement for the Stage 1 Lens (PCD Lens) as of May 31, 2016:
Category	Quantity (000’s t)	Lithium		Potassium		Sodium
		Li%	LCE Quantity (000’s t)	K%	Quantity (000’s t)	Na%	Quantity (000’s t)
Measured	50,753	0.312	843	3.27	1,660	1.13	574
Indicated	164,046	0.285	2,489	3.07	5,036	1.04	1,706
Inferred	124,890	0.294	1,954	3.04	3,792	1.1	1,374

Notes:

1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserves.

2. Resources presented at a Li% 0.20 cut-off grade which was determined using the following economic assumptions: US$3.36 Li carbonate/lb; 87.2% metallurgical recovery; US$66/tonne ore processed; US$2.75/tonne material moved.

Reserva reported to the Company that it is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant factors that will materially affect the Mineral Resource estimates.

Stage 2 Lens (South Lens) Resources

The table below presents the in situ lithium and potassium Mineral Resources for the Stage 2 Lens, at a cut-off grade of 0.20% lithium. The potassium grade is considered a by-product of the lithium resource. An average in situ dry density of 1.96 t/m³ for the mineralized volume was used as the tonnage factor.

 

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Mineral Resource Statement for the Stage 2 Lens (South Lens) as of May 15, 2010:
Category	Quantity (000’s t)	Lithium		Potassium		Na%	F%
		Li%	LCE Quantity (000’s t)	K%	Quantity (000’s t)
Indicated	95,000	0.27	1,365.3	3.66	3,477	1.55	0.57
Inferred	47,000	0.26	650.5	3.83	1,800	1.43	0.58

Notes:

1. Rounding errors may exist.

2. Contained metal does not allow for mine or metallurgical recovery. Tonnage factors used is 1.96 t/m².

3. Economic assumptions do not include any potassium credits.

4. Conversion factor from Li metal to Lithium Carbonate Equivalent (LCE) used is 5.323. Economic assumptions for cut-off grade determination are: US$3.50 Li carbonate/lb; 60% metallurgical recovery; US$50/tonne ore processed; US$2.20/tonne material moved.

In the Lithium Nevada TR, GeoSystems International, Inc. states that exploration potential exists at the Stage 2 Lens to increase the current Mineral Resource estimate. The Lithium Nevada TR authors also reported that there are no known environmental, permitting, legal, title, taxation, socio-economic, marketing, and political or other relevant issues that may materially affect the Mineral Resource estimates.

Exploration and Development

In April 2012, the Company announced results from electrochemical performance testing by Argonne National Laboratory of lithium carbonate extracted from the Lithium Nevada Project. Several electrochemical cells were fabricated using LAC’s lithium carbonate that was upgraded and purified with carbon dioxide during one of its pilot testing programs. The batteries incorporated three common cathode chemistry types consisting of: lithium manganese spinel (LiMn2O4), olivine (LiFePO4), and lithium nickel manganese composite oxide (LiMn2O3.LiNi0.5Mn0.5O2). Each cell was duplicated to incorporate lithium carbonate obtained from an industry standard Sigma-Aldrich product and compared under the same conditions with the Company’s product. The initial test results demonstrate superior performance by LAC’s product for olivine chemistry, and similar or slightly better performance for the other two cathode chemistries when compared against the Sigma-Aldrich standard.

Future development will focus on advancing flowsheet concepts on a mandate to minimize the resource-intensity and environmental footprint of extracting lithium from the deposit. Further geological work will be performed, with a vision to demonstrating how the project could scale beyond the 26,000 TPA LCE production rate originally proposed in the 2012 PFS.

Development of the project would include on-site infrastructure development including the mine, process plant, tailings impoundments and ancillary facilities. The project requires multiple permits and approvals from regulatory agencies and other entities at the federal, state and local levels. Lithium Nevada has completed baseline studies for geochemistry, vegetation, wildlife (including extensive studies for the greater sage-grouse), surface and groundwater quality and quantity, wetlands and waters of the U.S., seep and springs; soils, cultural resources, noise, visual analysis, weather monitoring, and other issues specific to the Lithium Nevada project area. The collected baseline study data will support the overall permitting and approval process for the proposed project, and the completion of the required National Environmental Policy Act environmental study.

 

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The RheoMinerals Business

History of the Business

LAC’s wholly-owned subsidiary, RheoMinerals, began operation in 2011 with the goal of producing specialty drilling fluids used in horizontal drilling in the oil and gas industry. Between 2011 and 2015 the Company financed and built RheoMinerals’ organoclay product manufacturing plant, the Fernley Facility. In 2014, the oil and gas industry went through a steep decline, and RheoMinerals shifted its focus to non-oilfield market opportunities, while maintaining sales and marketing activity within the oilfield service sector. In 2015, RheoMinerals initiated a product development program that focused on four markets: environmental, animal feed, industrial coatings and alternative drilling fluid additives for the oilfield market.

RheoMinerals now has an established product line across multiple product sectors and has established key sales and distribution relationships for its business.

Fernley Facility

The Fernley Facility is an organoclay manufacturing plant located in Fernley, Nevada, approximately 190 miles from the Lithium Nevada Project and approximately 30 miles from Reno, Nevada. The property encompasses 5.47 acres with three structures totalling 59,300 square feet, including a warehouse, a covered metal storage area that houses the organoclay process plant and an office/laboratory. The plant has a production capacity of approximately 24,000 TPA.

Management

RheoMinerals has assembled a management team with experience and knowledge in the manufacture, sale & marketing as well as product development and technical support for organophilic clays. The Fernley Facility has a team of experienced plant operating and maintenance personnel that oversee the manufacture of organophilic clay products.

Sales and Marketing

RheoMinerals works with several prospective customers in the oilfield, industrial coatings, environmental and animal feed markets in North America, Europe, South America, and China. RheoMinerals is also collaborating with industry participants on a specialty organophilic clay product for environmental applications.  The product will service the existing market to remove organic compounds from industrial wastewater effluent.

RheoMinerals has a strategic alliance to collectively pursue growth opportunities in the global clay minerals markets with TOLSA, a global leader in the specialized clay sectors.  RheoMinerals has also entered into a Technical Assistance and Royalty Agreement with Delmon Co Ltd. (the “Delmon Agreement”), part of The Delmon Group of Companies (“Delmon”) in Saudi Arabia. Under the Delmon Agreement, RheoMinerals will collaborate with Delmon in the design and construction of a manufacturing facility for specialty additives used in oil-based drilling fluids. The construction of a this plant by Delmon in Saudi Arabia is progressing as scheduled, and commissioning is estimated to begin in the second quarter of 2018. The Company is entitled to net profit and gross profit royalties from the future production by Delmon.

The Company reported $4.3 million in organoclay sales during the year ended December 31, 2017. Most of RheoMinerals’ sales during the year ended December 31, 2017 were to oil and gas service sector customers.

 

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Trends and Outlook

RheoMinerals is pursuing commercial sales arrangements for its organoclay products, as well as expanding the range of the potential applications for its organoclay products.

Competitive Conditions

Lithium currently has many end uses, including ceramics and glass, batteries, greases, air treatment and pharmaceuticals. However, it is the battery industry that is expected to predominantly drive future demand growth for lithium. This is expected to come from several areas: (i) the continued growth of small format batteries for cell phones, laptops, digital cameras and hand held power tools, (ii) the transportation industry’s electrification of automobiles, buses, delivery vehicles, motorcycles, bicycles and boats using lithium-ion battery technology, and (iii) large format batteries for utility grid-scalestorage.

The global supply of lithium is currently dominated by a small group of companies. Four companies (SQM, Albemarle Corporation, FMC Corporation and Ganfeng) supply lithium from brines. SQM, FMC Corporation and Albemarle Corporation have brine operations in the “Puna Plateau”. In addition, Albemarle Corporation has a brine operation in the United States and a spodumene (hard rock) operation in Australia. Another company, Sichuan Tianqi Lithium Industries, produces lithium from a spodumene deposit where it has a 51% interest and Albemarle Corporation has a 49% interest.

LAC believes that although the supply of lithium carbonate is expected to increase in the next 12 to 24 months from a previously completed expansion in South America and an increase of hard rock feedstock (from Australia’s feeding conversion capacity in China), demand may grow faster than new supply.

Specialized Skills and Knowledge

All aspects of the Company’s business require specialized skills and knowledge. Such skills and knowledge include the areas of geology, drilling, logistical planning and implementation of exploration programs and regulatory, finance and accounting. The Company relies upon its management, employees and various consultants for such expertise.

Mineral Price and Economic Cycles

The mining business is subject to mineral price cycles. The marketability of minerals and mineral concentrates is also affected by worldwide economic cycles. Lithium markets are affected by demands for lithium batteries and global economic conditions. Fluctuations in supply and demand in various regions throughout the world are common.

Economic Dependence

The Company’s business is dependent on the exploration, development and operation of lithium properties. The Company is not dependent on any sole contract to sell the major part of the Company’s products or services or to purchase the major part of the Company’s requirements for goods, services or raw materials, or on any franchise or licence or other agreement to use a patent, formula, trade secret, process or trade name upon which the Company’s business depends.

Bankruptcy and Similar Procedures

There are no bankruptcies, receivership or similar proceedings against the Company, nor is the Company aware of any such pending or threatened proceedings. The Company has not commenced any bankruptcy, receivership or similar proceedings during the Company’s history.

 

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Reorganizations

LAC completed a plan of arrangement with Former LAC in September 2015. See “General Development of the Business - Three Year History.”  There have been no other corporate reorganizations of the Company.

Foreign Operations

The Company’s properties are located in Argentina and the United States. In particular, the Cauchari-Olaroz Project in Argentina exposes the Company to various degrees of political, economic and other risks and uncertainties. See “Risk Factors” and “Emerging Market Disclosure.”

The economy of Argentina has undergone significant positive changes commencing in the first quarter of 2016 as a result of measures that the new government has taken to reduce or remove controls and restrictions on capital flows. Since taking office in December 2015, President Mauricio Macri has moved swiftly to appoint a business-friendly cabinet and implement a series of major fiscal, political and regulatory policy measures. President Macri lifted foreign exchange controls that had been in place since 2011 and abolished export taxes on many agricultural and industrial goods, including lithium.

Argentina enacted comprehensive tax reform (Law No. 27,430) in December 2017 (the “Argentine Tax Law”) and the Argentine Tax Law became effective January 1, 2018. Specifically, the Argentine Tax Law introduces amendments to corporate income tax, personal income tax, value added tax, tax procedural law, criminal tax law, social security contributions, excise tax, tax on fuels, and tax on the transfer of real estate. It also establishes a special regime comprising an optional revaluation of assets for income tax purposes. The reform, coupled with an agreement with Argentina’s provinces to reduce regional sales taxes, should reduce the tax burden and improve the efficiency of the taxation system in Argentina.

Employees

As at December 31, 2017, the Company had 48 employees and three part time and/or consultants working at various locations. As at December 31, 2017, the Cauchari Joint Venture had over 400 employees and contract workers working at the Cauchari-Olaroz Project in Argentina.

Environmental Protection

The Company’s operations are subject to various government laws and regulations concerning safety and environmental protection. The EIS has been approved by the authorities in Argentina for the Cauchari-Olaroz Project and all permits required to start mine construction have been issued to the Company based on its current mine plan, as described in the Cauchari FS. Within the United States, the Company has received approvals, including environmental approvals by local, State and Federal authorities to commence the mining of hectorite clay in support of RheoMinerals’ business. Environmental studies for lithium mining operations at the Lithium Nevada Project are ongoing.

Social or Environmental Policies

The Company aims to minimize the impact of its operations on both local communities and the environment. At the Cauchari-Olaroz Project, a social responsibility plan (the “Social Responsibility Plan”) was developed to incorporate best practices on these matters. The Social Responsibility Plan was prepared in accordance with the Argentina Principles. The Company has, in accordance with the principles in its Social Responsibility Plan, entered into agreements with the aboriginal communities located proximate to the Cauchari-Olaroz Project that aim to promote social development through high quality job creation, training, access to medical assistance and other infrastructure. LAC is also

 

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committed to developing the Lithium Nevada Project in a responsible and sustainable manner. The Company takes its responsibilities seriously to protect the environment, to conduct business based on high ethical standards and to make a positive difference in the communities in which it operates.

Emerging Market Disclosure

The Company holds its properties and projects in Argentina, an emerging market, indirectly through subsidiaries and joint venture entities which are locally incorporated or established for the purposes of compliance with local laws. Operating in an emerging market exposes the Company to risks and uncertainties that do not exist or are significantly less likely to occur in other jurisdictions where the Company operates, such as the United States or Canada. In order to manage and mitigate these risks, the Company has designed a system of corporate governance for itself and its subsidiaries and joint ventures that include internal controls over financial reporting and disclosure controls. These systems are coordinated by the Company's senior management and overseen by its Board in order to monitor the Company’s operating subsidiaries and joint ventures.

Board and Management Experience and Oversight

Key members of the Company’s management team have experience running business operations in emerging markets, including Argentina.  Gabriel Rubacha, a director and the President of South American Operations, is an Argentinean national and has held senior positions in large, multinational corporations operating throughout South America. Franco Mignacco, a director of the Company and the President of Exar, is also an Argentinean national and has substantial business operating experience in Jujuy Province where the Cauchari-Olaroz Project is located.

In addition, senior officers of the Company, including the CEO and President, regularly visit the Company's operations and properties in Argentina. During these visits, they interact with local employees, government officials and business persons; such interactions enhance the visiting directors’ and officers' knowledge of local culture and business practices. The Board has undertaken a site visit of the Cauchari-Olaroz Project and held a Board meeting in Argentina in each of the past two years.

The Board, through its corporate governance practices, regularly receives management and technical updates, risk assessments and progress reports in connection with its operations in Argentina. Through these updates, assessments and reports, the Board gains familiarity with the operations, laws and risks associated with operations in that jurisdiction. The Board also has access to head office management in Canada who: (a) work directly with local management in Argentina and are familiar with the laws, business culture and standard practices of Argentina; (b) have Spanish language proficiency; (c) are experienced in working in Argentina and in dealing with the Argentine government authorities; and (d) have experience and knowledge of the local banking systems and treasury requirements of Argentina.

Communication

While the reporting language with the head office of the Company is English, the primary operating language in Argentina is Spanish. Messrs. Mignacco and Rubacha are native Spanish speakers andvarious members of head office management are proficient in Spanish. Additionally, the majority of operational management in Argentina are fluent in both Spanish and English.

The Company maintains open communication with its operations in Argentina through management team members who are fluent in Spanish and are proficient in English, removing language barriers between the Company's head office and the local management team in Argentina. The primary language used in meetings with head office management and Board meetings is English and material documents relating to the Company's operations that are provided to the Board are in English. Material documents relating to

 

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the Company's material operations in Argentina are either in English or, where in Spanish, are translated into or summarized in English.

Controls Relating to Corporate Structure Risk

The Company has implemented a system of corporate governance, internal controls over financial reporting and disclosure controls and procedures that apply to the Company, its subsidiaries and the Cauchari Joint Venture. These systems are overseen by the Board and implemented by the Company’s senior management. The relevant features of these systems include:

(a) The Company’s Control Over Subsidiaries and Joint Ventures.The Company’s corporate structure has been designed to ensure that the Company has a measure of direct oversight over the operations of its subsidiaries and the Cauchari Joint Venture. The Cauchari Joint Venture is governed by the Exar Shareholder Agreement (please see “Material Contracts - Exar Shareholder Agreement”) which provides for: (i) equal representation by the Company and SQM on the Exar Management Committee; (ii) unanimous approval by the Company and SQM on budgets and timing of expenditures; (iii) the mutual right to purchase a 50% share of the production; and (iv) buyout and termination provisions in the event that SQM chooses not to proceed with the project. The Cauchari Joint Venture is overseen by the Exar Management Committee, which has equal representation from SQM and the Company, and meets monthly to make decisions relating to project development. The current representatives of the Company on the Exar Management Committee are Tom Hodgson, John Kanellitsas and Gabriel Rubacha. The Company and SQM also have equal representation on Exar’s four member board of directors. The Company works closely and is in constant communication with Exar’s management, including Exar’s CFO. Under the Company’s supervision, in July, 2017 Exar implemented SAP’s accounting and reporting system and adopted best practice internal controls as part of the SAP implementation. In addition, Exar established a Compliance Department which oversees the operations and financial reporting from compliance perspective. The Company reviews Exar’s financial reporting as part of preparing its consolidated financial reporting. The Company’s independent auditors review the results of the audit of Exar’s financial statements by Exar’s independent auditors as part of the audit of the Company’s consolidated financial statements and the results are reported to the Company’s Audit Committee. The Company has adopted a simple structure for its Argentina business operations, with the principal Argentine operating company for LAC’s assets in Argentina being held as to a nominal amount by a wholly-owned Ontario company (which was originally established to meet Argentine corporate law requirements to have two shareholders) and the balance held directly by the parent company. There are no holdings through tax havens or unconventional legal structures in the corporate chain.

(b) Signing Officers for Foreign Subsidiary Bank Accounts. The establishment of any new banking relationships and/or new bank accounts requires approval from the Company. Monetary authorization limits are established by the Company and put in place with the respective banking institutions. Signatories and authorization limits for bank accounts are reviewed and revised as necessary, with changes being communicated to the appropriate banking institutions. Each payment requires approvals from two authorised signatories. Cash calls, equity contributions and loans to subsidiaries and the Cauchari Joint Venture are provided within the approved budgets and require the necessary authorisations from the Company’s officers to be processed. Exar’s controls over payments are subject to review and testing by the Company and findings are reviewed by the Company’s Audit Committee.

(c) Strategic Direction. The Board is responsible for the overall stewardship of the Company and, as such, supervises the management of the business and affairs of the Company. More

 

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specifically, the Board is responsible for reviewing the strategic business plans and corporate objectives, and approving acquisitions, dispositions, investments, capital expenditures and other transactions and matters that are material to the Company including those of its material subsidiaries and the Cauchari Joint Venture.

(d) Internal Control Over Financial Reporting. The Company prepares its consolidated financial statements on a quarterly and annual basis, using IFRS. The Company implements internal controls over the preparation of its financial statements and other financial disclosures, including its MD&A, to provide reasonable assurance that its financial reporting is reliable and that the quarterly and annual financial statements are being prepared in accordance with IFRS and other financial disclosures, including its MD&A, are being prepared in accordance with relevant securities legislation. These systems of internal control over financial reporting and disclosure controls and procedures are designed to ensure that, among other things, the Company has access to material information about its subsidiaries.

(e) Disclosure Controls and Procedures. The Company hasa disclosure policy that establishes the protocol for the preparation, review and dissemination of information about the Company.  This policy provides for multiple points of contact in the review of important disclosure matters, that includes input from key members of management located in Argentina.

(f) CEO and CFO Certifications. In order for the Company’s CEO and CFO to be in a position to attest to the matters addressed in the quarterly and annual certifications required by NI 52-109 and United States securities laws, the Company has developed internal procedures and responsibilities throughout the organization for its regular periodic and special situation reporting, in order to provide assurances that information that may constitute material information will reach the appropriate individuals who review public documents and statements relating to the Company and its subsidiaries containing material information, is prepared with input from the responsible officers and employees, and is available for review by the CEO and CFO in a timely manner.

Fund Transfers between the Company and the Company’s Subsidiaries and Joint Ventures

Differences in banking systems and controls between Canada and Argentina are addressed by having stringent controls over cash kept in the jurisdiction, especially with respect to access to cash, cash disbursements, appropriate authorization levels, performing and reviewing bank reconciliations on at least a monthly basis and the segregation of duties. In executing certain normal course monetary transactions, funds are transferred between the Company and its subsidiaries by way of wire transfer. These transactions would typically include the payment of applicable fees for services; reimbursement of costs incurred by the Company on behalf of the subsidiaries and joint ventures; advances in the form of intercompany loans or equity contributions to subsidiaries and joint ventures, repayment of interest and/or principal on intercompany loans, and the return of capital or payment of dividends from subsidiaries and joint ventures. Capital structure and funding arrangements are established between the Company and the subsidiaries and joint ventures, and intercompany loan agreements are established with defined terms and conditions. Where regulatory conditions exist in the form of exchange controls, all necessary approvals are obtained in advance of the proposed transactions.

Managing Cultural Differences

Differences in cultures and practices between Canada and Argentina are addressed by employing competent staff in Canada and Argentina who are familiar with the local laws, business culture and standard practices, have local language proficiency, are experienced in working in that jurisdiction and in

 

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dealing with the relevant government authorities and have experience and knowledge of the local banking systems and treasury requirements.

Transactions with Related Parties

LAC has one substantive related party relationship in respect of its Argentina business operations, being the Los Boros Option Agreement, in which the counterparty is a company that Franco Mignacco holds a material interest.  The current business arrangements with that entity were negotiated in 2016 by the Exar joint venture parties (SQM and LAC) on an arm’s length basis.  For further information see “The Cauchari-Olaroz Project – Property Description, Location and Access” and “Interest of Management and Others in Material Transactions”. Exar has also retained a company in which Franco Mignacco holds an interest to conduct certain construction services on the Cauchari-Olaroz Project.

Records Management of the Company’s Subsidiaries

The original minute books and corporate records of each of the Company’s subsidiaries are kept at each subsidiary’s respective registered office. Company management and the Board have complete access to these records.

Description of Capital Structure

Common Shares

The Company is authorized to issue an unlimited number of Common Shares without par value of which, as of the date of this AIF, 88,511,878 Common Shares are issued and outstanding. All rights and restrictions in respect of the Common Shares of the Company are set out in the Company’s notice of articles and the BCBCA and its regulations. The Common Shares have no pre-emptive, redemption, purchase or conversion rights. Neither the BCBCA nor the constating documents of the Company impose restrictions on the transfer of Common Shares on the register of the Company, provided that the Company receives the certificate representing the Common Shares to be transferred together with a duly endorsed instrument of transfer and payment of any fees and taxes which may be prescribed by the Board from time to time. There are no sinking fund provisions in relation to the Common Shares and they are not liable to further calls or assessment by the Company. The BCBCA and the Company’s articles provides that the rights and restrictions attached to any class of shares may not be modified, amended or varied unless consented to by special resolution passed by not less than two-thirds of the votes cast in person or by proxy by holders of shares of that class.

The holders of the Common Shares are entitled to: (i) notice of and to attend any meetings of shareholders and shall have one vote per Common Share at any meeting of shareholders of the Company; (ii) dividends, if as and when declared by the Board; and (iii) upon liquidation, dissolution or winding up of the Company, on a pro rata basis, the net assets of the Company after payment of debts and other liabilities.

Dividends and Distributions

The Company has no fixed dividend policy and the Company has not declared any dividends on its Common Shares since its incorporation. The Company anticipates that all available funds will be used to undertake exploration and development programs on its mineral properties as well as for the acquisition of additional mineral properties. The payment of dividends in the future will depend, among other things, upon the Company’s earnings, capital requirements and operating and financial condition. Generally, dividends can only be paid if a corporation has retained earnings. There can be no assurance that the

 

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Company will generate sufficient earnings to allow it to pay dividends. See also “General Development of the Business.”

Market for Securities

Market

The Common Shares of the Company are traded in Canada on the Exchange under the symbol “LAC”.  Commencing in 2018 LAC’s Common Shares also commenced trading on the NYSE under the same symbol. The closing price of the Company’s Common Shares on the Exchange on March 28, 2018 was $6.47.

Trading Price and Volume

The following sets forth the high and low market prices and the volume of the Common Shares traded on the Exchange during the periods indicated:

Month	High $	Low $	Volume
October, 2016	4.70	3.30	2,502,447
November, 2016	4.20	2.60	5,054,567
December, 2016	4.25	3.55	1,996,951
January, 2017	5.40	3.80	5,420,438
February, 2017	6.30	4.60	5,115,660
March, 2017	5.55	3.85	5,622,687
April, 2017	5.05	4.45	2,015,936
May, 2017	5.20	4.55	1,958,827
June, 2017	5.25	4.25	2,030,431
July, 2017	5.10	3.90	1,896,923
August, 2017	6.65	5.00	4,697,809
September, 2017	9.00	6.10	8,728,886
October, 2017	11.55	8.05	8,896,209
November, 2017	14.06	9.35	14,726,202
December, 2017	13.77	10.28	10,181,020

The Listed Warrants were traded on the Exchange under the symbol LAC.WT until June 9, 2017. The following sets forth the high and low market prices and the volume of the Listed Warrants traded on the Exchange during the periods indicated.

Month	High $	Low $	Volume
October, 2016	1.05	0.45	80,000
November, 2016	0.90	0.28	174,668
December, 2016	0.95	0.55	31,960
January, 2017	1.40	0.75	203,194

 

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Month	High $	Low $	Volume
February, 2017	1.80	0.90	153,945
March, 2017	1.20	0.45	193,956
April, 2017	0.75	0.40	82,430
May, 2017	0.75	0.15	148,333
June, 2017	0.70	0.15	245,924

Directors and Officers

Name and Occupation

The name, province or state of residence, position with and principal occupation within the five preceding years for each of the directors and executive officers of the Company are set out in the following table:

Name, Province or State and Country of Residence and Position with the Company(1)	Principal Occupation or Employment for the Last Five Years(1)	Director Since
DIRECTORS:
George Ireland Massachusetts, USA Non-Executive Chairman and Director	Founder, Chief Investment Officer and CEO of Geologic Resources Partners LLP (investment fund).	Nov 2015
Wang Xiaoshen Shanghai, China Director	Vice-Chairman and Executive Vice President of Ganfeng Lithium Corporation (resource development company).	June 2017
Chaiwat Kovavisarach Bangkok, Thailand Director	President and Chief Executive Officer of Bangchak Corporation Public Company Limited (resource development company) from January 2015 to Present; advisor to Avantgarde Capital Company Limited from 2007 to 2014.	August 2017
Jonathan Evans Georgia, USA Director	Chief Operating Officer of DiversiTech Corporation (technology company) since March 2016; EVP Global Operations/Supply Chain of Arysta LifeScience (biotech company) from June 2013 to March 2016 and Interim CEO from July 2015 to February 2016; Vice President and General Manager CE Minerals of Imerys SA (resource development company) from January to June 2013; Vice President and General Manager of the Lithium Division of FMC Corporation (resource development company) from August 2008 to January 2013.	June 2017
Gary Cohn Ontario, Canada Director	Consultant on corporate development matters since July 2015; Vice-President, Mergers and Acquisitions of Magna International Inc. (auto parts manufacturer) from May 2009 to June 2015.	June 2017

 

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Name, Province or State and Country of Residence and Position with the Company(1)	Principal Occupation or Employment for the Last Five Years(1)	Director Since
Jean Fraser Ontario, CanadaDirector	Retired partner at Osler, Hoskin & Harcourt LLP(2) (law firm).	Nov 2017
Franco Mignacco Jujuy, Argentina Director	President of Exar since June 2013; President of Los Boros S.A. (construction and property development company) since January 2006.	Sep 2015
OFFICERS:
Tom Hodgson Ontario, Canada Director and Chief Executive Officer	CEO of the Company since November 2015; Executive Chairman of former LAC from 2010 to September 2015.	Sep 2015
John Kanellitsas Idaho, USA Director and President and Vice Chairman	President of the Company since March 2016; Vice-Chairman of the Company since November 2015; Interim CEO of former LAC from June 2013 to June 2014; CEO of former LAC from June 2014 to September 2015; Chief Operating Officer and Chief Compliance Officer of Geologic Resource Partners LLC (investment fund) from June 2004 to January 2015.	Sep 2015
Gabriel Rubacha Buenos Aires, Argentina Director, President of South American Operations	President of South American Operations of the Company since May 2017; Commercial Director of Techint Engineering & Construction (engineering and development company) 2016 to April 2017; Managing Director of Southern Cone, Techint Engineering & Construction from 2012 to 2016.	March 2016
Alexi Zawadzki British Columbia, Canada President of North American Operations	President of North American Operations of the Company from August 2017 to present; VP Programs Development of Lithium Nevada Corp. from August 2016 to August 2017; VP Business Development of Pure Energy Minerals from  October 2014 to June 2016; VP Business Development of Veresen Inc. from 2010 to Oct 2013.	N/A
Eduard Epshtein British Columbia, Canada Chief Financial Officer	Chief Financial Officer of the Company since May 2008; Chief Financial Officer, Concordia Resource Corp. (now Kaizen Discovery Inc.), October 2006 to December 2013.	N/A
David Deak California, USA Chief Technical Officer and Senior Vice President; President of Lithium Nevada	Chief Technical Officer and Senior Vice President of the Company and President of Lithium Nevada since May 2016; Senior Engineer at Tesla Motors Inc. from 2014 to 2016; Technical Program Manager at Ambri Inc. from 2012 to 2014.	N/A

 

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Name, Province or State and Country of Residence and Position with the Company(1)	Principal Occupation or Employment for the Last Five Years(1)	Director Since
Myron ManternachPennsylvania, USAExecutive Vice President, Finance and Corporate Development	Executive Vice President, Finance and Corporate Development of the Company, 2016 to present; Managing Director and Senior Portfolio Manager of Ambac Assurance Corp., a subsidiary of Ambac Financial Group Inc. (insurance company) from April 2015 to August 2016; President, Castle Grove Capital, LLC (financial and strategic consulting firm) since July 2013; Consultant to the investment committee of Geologic Resource Partners, LLC (investment fund specializing in the mining & metals sector) from August 2013 to June 2015.	N/A

Notes:

(1) The information as to country of residence and principal occupation has been furnished by the respective directors and executive officers individually.

(2) Ms. Fraser was a Partner at Osler, Hoskin & Harcourt LLP until her retirement in 2015

Each director’s term of office expires at the next annual general meeting of the Company.

Shareholdings of Directors and Officers

As of the date of this AIF, the directors and executive officers of the Company, as a group, beneficially owned, directly or indirectly, or exercised control or direction over 39,482,418 Common Shares representing approximately 45% of the issued and outstanding Common Shares, and held options to acquire 5,454,419 Common Shares.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

No director or executive officer of the Company is, as at the date of this AIF, or was, within ten years before the date of this AIF, a director, chief executive officer or chief financial officer of any company (including the Company), that (a) was subject to a cease trade or similar order or an order that denied the relevant company access to any exemption under the securities legislation, for a period of more than 30 consecutive days, or (b) was subject to an order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

No director or executive officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company (a) is, as at the date of this AIF, or has been within the 10 years before the date of this AIF, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, or (b) has, within the 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.

 

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No director, or executive officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, has been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Committees of the Board

The committees of the Board consist of an Audit Committee, Compensation and Benefits Committee, Nominating and Corporate Governance Committee and a Health, Safety and Environmental Committee. The members of the Compensation and Benefits Committee are Jon Evans (chair), Jean Fraser and Wang Xiaoshen. The members of the Nominating and Corporate Governance Committee are George Ireland (chair), Jean Fraser, Chaiwat Kovavisarach and Gary Cohn. The members of the Health, Safety and Environmental Committee are Gabriel Rubacha (chair), Franco Mignacco and Jon Evans. The members of the Audit Committee are Gary Cohn (chair), George Ireland and Jon Evans. Information concerning the Audit Committee is provided under “Audit Committee Information” below.

Conflicts of Interest

To the best of the Company’s knowledge, except as otherwise noted in this AIF, there are no existing or potential conflicts of interest among the Company, its directors, officers, or other members of management of the Company except that certain of the directors, officers and other members of management serve as directors, officers and members of management of other public companies and therefore it is possible that a conflict may arise between their duties as a director, officer or member of management of such other companies and their duties as a director, officer or member of management of the Company.

The directors and officers of the Company are aware of the existence of laws governing accountability of directors and officers for corporate opportunity and requiring disclosure by directors of conflicts of interest and the Company will rely upon such laws in respect of any directors’ or officers’ conflicts of interest or in respect of any breaches of duty to any of its directors and officers. All such conflicts must be disclosed by such directors or officers in accordance with the BCBCA.

The Company has adopted a Code of Business Conduct and Ethics that applies to all directors, officers, employees and consultants of the Company and its subsidiaries. A copy of the Company’s Code of Business Conduct and Ethics may be found on SEDAR at www.sedar.com.

Audit Committee Information

Audit Committee Charter

The charter of the Audit Committee is attached as Schedule “B” to this AIF.

Composition of the Audit Committee and Independence

The Company’s Audit Committee consists of Gary Cohn (chair), George Ireland and Jon Evans. NI 52-110 provides that a member of an audit committee is “independent” if the member has no direct or indirect material relationship with the Company, which could, in the view of the Board, reasonably interfere with the exercise of the member’s independent judgment. The Board has determined that all members of the Audit Committee are “independent” directors.

 

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Relevant Education and Experience

NI 52-110 provides that an individual is “financially literate” if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements. The Company has determined that all of the members of the Audit Committee are “financially literate”.

Based on their business and educational experiences, each Audit Committee member has a reasonable understanding of the accounting principles used by the Company; an ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves; experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, or experience actively supervising one or more individuals engaged in such activities; and an understanding of internal controls and procedures for financial reporting. A majority of the members of the Audit Committee have had several years of experience in senior executive roles and as board members of significant business enterprises in which they assumed substantial financial and operational responsibility. In the course of these duties, such members have gained a reasonable understanding of the accounting principles used by the Company; an ability to assess the general application of such principles in connection of the accounting for estimates, accruals and reserves; experience analyzing and evaluating financial statements that present a breadth and level of complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, or experience actively supervising one or more individuals engaged in such activities; and an understanding of internal controls and procedures for financial reporting.

Audit Committee Oversight

Since the commencement of the Company’s most recently completed financial year, the Audit Committee has not made any recommendations to nominate or compensate an external auditor which were not adopted by the Board.

Reliance on Certain Exemptions

Since the commencement of the Company’s most recently completed financial year, the Company has not relied on the exemptions in section 2.4 (De Minimis Non-audit Services), section 3.2 (Initial Public Offerings), section 3.4 (Events Outside Control of Member) or section 3.5 (Death, Disability or Resignation of Audit Committee Member) of NI 52-110, or an exemption from NI 52-110, in whole or in part, granted under Part 8 (Exemptions).

Since the commencement of the Company’s most recently completed financial year, the Company has not relied on the exemption in subsection 3.3(2) (Controlled Companies), section 3.6 (Temporary Exemption for Limited and Exceptional Circumstances) or the exemption in section 3.8 (Acquisition of Financial Literacy) of NI 52-110.

Pre-Approval Policies and Procedures

The Audit Committee Chair is authorized to pre-approve all non-audit services to be provided to the Company or its subsidiary entities by the Company’s external auditor, subject to the Audit Committee Chair reporting the pre-approval(s) to the Audit Committee at the Committee’s meeting subsequent to the said approval(s).

 

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Audit Fees

The following table sets forth the fees billed to the Company and its subsidiaries by PricewaterhouseCoopers LLP (“PwC”) for services rendered during the periods ended December 31, 2017 and 2016:

	12 months ended Dec. 31, 2017	15 months ended Dec. 31, 2016
Audit fees(1)	$145,529	$197,148
Audit-related fees	-	-
Tax fees(2)	$26,130	$28,148
All other fees(3)	$9,000	-
Total	$180,659	$225,296

Notes:

(1) The aggregate audit fees billed by the Company’s auditor.

(2) The aggregate fees billed (or accrued) for professional services provided by the auditor rendered for tax compliance, tax advice and tax planning.

(3) All other fees represent fees for audit of the Company’s report prepared pursuant to the Extractive Sector Transparency Measure Act in Canada.

Legal Proceedings and Regulatory Actions

The Company is not a party to, nor are any of the Company’s properties subject to, any pending legal proceedings or regulatory actions the outcome of which would have a material adverse effect on the Company. The management of the Company is not aware of any material legal proceedings in which the Company may be a party which are contemplated by governmental authorities or otherwise.

Interest of Management and Others in Material Transactions

Management of the Company is not aware of any material interest, direct or indirect, of any insider of the Company, or any associate or affiliate of any such person, in any transaction during the Company’s three last completed financial years, or during the current financial year that has materially affected or is reasonably expected to materially affect the Company.

On March 28, 2016, the Cauchari Joint Venture entered into the Los Boros Option Agreement with Los Boros, a company controlled by the family of Franco Mignacco, Director of the Company and President of Exar, and of which Franco Mignacco is Vice-President, for the transfer of title to the Cauchari Joint Venture for certain mining properties that comprised a portion of the Cauchari-Olaroz Project.

Transfer Agents and Registrars

The Company’s registrar and transfer agent is Computershare Investor Services Inc. located at its principal offices in Vancouver, British Columbia.

 

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Material Contracts

Other than contracts entered into in the ordinary course of business, and except as described below, the Company has not entered into any material contracts within the most recently completed financial year or previous to the most recently completed financial year, that are still in effect.

Exar Shareholder Agreement

On March 28, 2016, the Company announced a definitive agreement with SQM Potasio S.A., a subsidiary of SQM to enter into the Cauchari Joint Venture. The Cauchari Joint Venture is governed by a shareholders’ agreement which provides for (i) equal representation by the Company and SQM on the Exar Management Committee, (ii) unanimous approval by the Company and SQM on budgets and timing of expenditures, (iii) the mutual right to purchase a 50% share of the production, and (iv) buyout and termination provisions in the event that SQM chooses not to proceed with the project.

Ganfeng Investment Agreement

On January 17, 2017, LAC and Ganfeng entered into the Ganfeng Investment Agreement for funding to advance the development of the Cauchari-Olaroz Project. On January 19, 2017, LAC and Ganfeng amended the agreement concurrent with entering into the BCP Investment Agreement. Pursuant to the Ganfeng Investment Agreement, and related agreements, Ganfeng: (a) agreed to purchase by way of private placement, 15,000,000 Common Shares; (b) agreed to provide a US$125 million credit facility; and (c) acquired an off-take entitlement for the purchase of up to 80% of LAC’s share of Cauchari-Olaroz Stage 1 lithium carbonate production at market prices.

Ganfeng Investor Rights Agreement

On July 14, 2017 LAC and Ganfeng entered into an amended and restated investor rights agreement (the “Ganfeng Investor Rights Agreement”), pursuant to which Ganfeng has the following rights, provided that it continues to hold not less than 15% of the Common Shares: (a) the right to add a nominee to the Board; (b) participation rights allowing it to maintain its equity ownership interest in LAC at 17.5%, or such other percentage as determined in accordance with the terms and conditions of the Ganfeng Investor Rights Agreement, until March 31, 2019; and (c) a registration right for the sale of its Common Shares. In accordance with the nomination right, the Company appointed to the Board, Wang Xiaoshen, the Vice-Chairman and Executive Vice President of Ganfeng Lithium Corporation.

BCP Investment Agreement

On January 19, 2017, LAC and BCP entered into the BCP Investment Agreement (the “BCP Investor Rights Agreement”) for funding to advance the construction of the Cauchari-Olaroz Project. Pursuant to the BCP Investment Agreement, and related agreements, BCP: (a) agreed to purchase by way of private placement, 10,000,000 Common Shares; (b) agreed to provide US$80 million of loans to a syndicated credit facility; and (c) acquired an off-take entitlement for the purchase of up to 20% of LAC’s share of Cauchari-Olaroz Stage 1 lithium carbonate production at market prices.

BCP Investor Rights Agreement

On July 14, 2017 LAC and BCP entered into an investor rights agreement, pursuant to which BCP has the following rights, provided that it continues to hold not less than 15% of the Common Shares: (a) the right to add a nominee to the Board; (b) participation rights allowing it to maintain its equity ownership interest in LAC at 16.4%, or such other percentage as determined in accordance with the terms and conditions of

 

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the BCP Investor Rights Agreement, until March 31, 2019; and (c) a registration right for the sale of its Common Shares.

In accordance with the nomination right, the Company appointed to the Board Chaiwat Kovavisarach, the CEO of Bangchak.

Amended Credit Facility

On July 14, 2017 the Company (as borrower) and 2265866 Ontario Inc., Lithium Nevada and KV Project LLC (as guarantors), Ganfeng. and BCP (as Lenders); BNY Trust Company of Canada (as the administrative agent for the lenders) and The Bank of New York Mellon (as the U.S. Collateral Agent for the Lenders) entered into the Amended Credit Facility.  Under the Amended Credit Facility, Ganfeng agreed to lend the Company US$125 million and BCP agreed to loan the Company US$80 million to fund a portion of the Company’s share of Cauchari-Olaroz’ construction costs. The credit facility has a six-year term, carries an 8.0% interest rate for the first three years, 8.5% in year four, 9.0% in year five and 9.5% in year six on the principal amount drawn.

As security for the indebtedness, LAC granted to the lenders a first priority security interest in all assets except those that represent its ownership interest in the Cauchari-Olaroz Project.

Interests of Experts

Mario Rossi, FAusIMM, of GeoSystems International, Inc.; and Timothy J. Carew, P. Geo, of SRK Consulting (Canada) Inc., prepared the Lithium Nevada TR.

Ernest Burga, P.Eng., and David Burga, P.Geo., of Andeburg Consulting Services Inc., Michael Rosko, CPG, of Montgomery and Associates, Tony Sanford, Pr.Sci.Nat., of Ausenco, Mark King, P.Geo., of Groundwater Insight and Daron Abbey, P.Geo., of Matrix Solutions Inc., Barry Smee, P.Geo. of Smee and Associates Consulting Ltd. and Renee Leblanc, P.Eng. of the Company prepared the Cauchari TR.

All technical and scientific information contained in this AIF has been reviewed and approved by Rene LeBlanc, Senior Process Development Manager of Lithium Nevada, and a QP for the purposes of NI 43-101.

The Company’s auditors are PwC, Chartered Professional Accountants, who have prepared an independent auditor’s report dated March 28, 2018 in respect of the Company’s consolidated financial statements as at December 31, 2017 and December 31, 2016 and for the year ended December 31, 2017 and for the 15 month period ended December 31, 2016. PwC has advised that they are independent with respect to the Corporation within the meaning of the Chartered Professional Accountants of British Columbia Code of Professional Conduct.

Additional Information

Additional information including directors’ and officers’ remuneration and indebtedness, principal holders of the Company’s securities and options to purchase Common Shares of the Company and securities authorized for issuance under equity compensation plans is contained in the management proxy circular dated July 5, 2017 for the annual general meeting of the Company held on August 14, 2017, which is available on SEDAR at www.sedar.com. Additional financial information is contained in the Company’s comparative financial statements and MD&A as at and for the twelve and fifteen month periods ended December 31, 2017 and 2016 and the interim periods ending March 31, 2017, June 30, 2017 and September 30, 2017, which are available on SEDAR at www.sedar.com. Additional information relating to the Company may be found on SEDAR at www.sedar.com.

 

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Schedule “A”DEFINITIONS

Definitions

The abbreviations set forth below have the following meanings in this AIF, or in documents incorporated by reference in this AIF:

“°C” means degrees Celsius;

“AIF” means Annual Information Form;

“ALS” means ALS Chemex Labs Ltd. and its affiliates;

“Amended Credit Facility” means the Amended and Restated Credit and Guarantee Agreement dated July 14, 2017 between the Company (as borrower); 2265866 Ontario Inc., Lithium Nevada and KV Project LLC (as guarantors); Ganfeng. and BCP (as lenders); BNY Trust Company of Canada (as the administrative agent for the lenders); and The Bank of New York Mellon (as the U.S. collateral agent for the lenders);

“Arrangement” means the statutory plan of arrangement between the Company and Former LAC, which resulted in shareholders of Former LAC receiving Common Shares on the basis of 0.159 of a Common Share for each common share of Former LAC;

“Argentina Principles” means the guidelines of the Camara Argentina of Empresarios Mineros that have adopted the Towards Sustainable Mining, a corporate social responsibility program developed by the Mining Association of Canada to improve environmental and social practice in the mining industry;

“Argentine Mining Code” means the Código de Minería, the principle legislation that regulates the mining industry in Argentina;

“Argentine Tax Law” means the comprehensive tax reform enacted in Argentina in December 2017 and became effective as of January 1, 2018;

“ASA” means Alex Stewart Argentina;

“B” means boron;

“BCBCA” means the Business Corporations Act (British Columbia);

“BCP” means BCP Innovation PTE. Ltd., an affiliate of the Bangchak;

“BCP Investment Agreement” means the investment agreement entered into between LAC and BCP dated January 19, 2017, as subsequently amended;

BCP Investor Rights Agreement means the investor rights agreement between LAC and BCP dated January 19, 2017;

“BCP SR Private Placement” means the non-brokered private placement of 9,214,211 subscription receipts to BCP at a price of US$0.54264 per subscription receipt (pre-consolidation);

“BLM” means the U.S. Department of the Interior Bureau of Land Management;

1

“Board” means the board of directors of the Company;

“Ca” means calcium;

“CaCl₂” means calcium chloride;

“CaO” means calcium oxide;

“Cauchari Financing Transactions” means, collectively, the financings and related transactions and agreements contemplated by both the BCP Investment Agreement and the Ganfeng Investment Agreement;

“Cauchari Joint Venture” means the 50/50 co-ownership venture between the Company and SQM on the Cauchari-Olaroz Project, operated through shareholdings in Exar and related agreements;

“Cauchari-Olaroz Project” means the Company’s Cauchari-Olaroz brine lithium project located in the Province of Jujuy in Northwest Argentina;

“Cauchari TR” means the technical report dated January 15, 2018 entitled “NI 43-101 Technical Updated Feasibility Study Reserve Estimation and Lithium Carbonate Production at Cauchari-Olaroz Salars, Jujuy Province, Argentina”;

“CEO” means Chief Executive Officer;

“CFO” means Chief Financial Officer;

“Chevron” means Chevron Resources Company;

“CIM” means Canadian Institute of Mining, Metallurgy and Petroleum;

“CIM Definition Standards” means the CIM Definition Standards on Mineral Resources and Reserves;

“claims” means unpatented mining claims granted pursuant to the Mining Act;

“Common Shares” means the common shares of the Company;

“Company” or “LAC” means Lithium Americas Corp., formerly Western Lithium USA Corporation and, as the context requires, its subsidiaries;

“Convertible Security Funding Agreement” means the convertible security funding agreement between the Company and an entity managed by Lind dated April 30, 2015;

“DD” means diamond drill;

“Delmon” means The Delmon Group of Companies;

“Delmon Agreement” means the means the technical assistance and royalty agreement entered into between Delmon Co Ltd. and RheoMinerals on November 17, 2017;

“EBITDA” means earnings before interest, taxes, depreciation and amortization;

“EIS” means the Environmental Impact Statement prepared for the Cauchari-Olaroz Project;

2

“Exar” means Minera Exar S.A., the Company’s 50% joint venture subsidiary incorporated under the laws of Argentina through which it holds its interest in the Cauchari-Olaroz Project;

“Exchange” means the Toronto Stock Exchange;

“Fernley Facility” means the manufacturing facility based in Fernley, Nevada that manufactures RheoMinerals’ organoclay products;

“Former LAC” means Lithium Americas Corp.; which company became a wholly owned subsidiary of the Company pursuant to the plan of arrangement with LAC that closed in September 2015;

“Ganfeng” means GFL International Co., Ltd.;

“Ganfeng Investment Agreement” means the investment agreement entered into between LAC and Ganfeng dated January 17, 2017 and subsequently amended;

“Ganfeng Investor Rights Agreement” means the investor rights agreement between LAC and Ganfeng dated July 14, 2017;

“ha” means hectares;

“HCl” hydrochloride;

“IFRS” means the International Financial Reporting Standards, a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements;

“Initial Feasibility Study” means an initial Mineral Reserve estimate and mine plan Former LAC completed on the Cauchari-Olaroz in 2012;

“IRR” means internal rate of return;

“JEMSE” means Jujuy Energia y Mineria Sociedad del Estado, the government of Jujuy’s mining investment company, involved in the development and regulations of mining projects in the Argentinean province of Jujuy;

“JEMSE LOI” means the letter of intent between JEMSE and LAC dated November 2012 whereby JEMSE may acquire an equity interest in the Cauchari-Olaroz Project in exchange for providing management services to develop the Cauchari-Olaroz Project;

“K” means potassium;

“km” means kilometre;

“kV” means kilovolt;

“K-UTEC” means K-UTEC Salt Technologies;

“LCE” means lithium carbonate equivalent. Lithium is converted to lithium carbonate (Li2CO3) by multiplying lithium by 5.323;

“Leasing Act” means the Mineral Lands Leasing Act of 1920, as amended;

3

“Li” means lithium;

“LiKSO₄” means pyroelectric lithium potassium sulphate;

“Lind” means The Lind Partners LLC, a New York based asset management firm;

“Listed Warrants” means the Common Share purchase warrants of the Company traded on the Exchange under the symbol LAC.WT, which each entitle the holder to acquire one Common Share at a price of $4.50 at any time prior to June 9, 2017;

“Lithium Nevada” means Lithium Nevada Corporation, formerly Western Lithium Corporation, a wholly-owned subsidiary of the Company;

“Lithium Nevada Project” means the Company’s mineral property, consisting of five clay lenses hosting significant lithium mineralization located in Humboldt County, Nevada;

“Lithium Nevada TR” means the technical report entitled “Independent Technical Report for the Lithium Nevada Property, Nevada, USA” dated December 15, 2017;

“Los Boros” means Grupo Minero Los Boros S.A.;

“Los Boros Option Agreement” means the option agreement between Exar and Los Boros entered into on March 28, 2016;

“m” means metre;

“m³” means cubic metre;

“Exar Management Committee” means the management committee of Exar, which is responsible for the oversight of Exar and has six members (three from the LAC and three from SQM);

“MD&A” means management discussion and analysis;

“mm” means millimetre;

“Mg” means magnesium;

“mg/L” means milligrams per litre;

“Mining Act” means the U.S. General Mining Act of 1872, also known as the Mining Law of 1872, as amended;

“MW/h” means Megawatts per hour;

“MW/y” means Megawatts per year;

“Na” means sodium;

“NaCl” means sodium chloride;

“NaOH” means sodium hydroxide;

“NYSE” means the New York Stock Exchange;

4

“NI 43-101” means National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators;

“NI 52-109” means National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings;

“NI 52-110” means National Instrument 52-110 – Audit Committees of the Canadian Securities Administrators;

“NPV” means net present value;

“Orion” means Orion Mine Finance Fund I, formerly RK Mine Finance (Master) Fund II L.P.;

“PAEE” means the preliminary assessment and economic evaluation completed by URS dated January 22, 2010;

“pH” means the measure of acidity/alkalinity of an aqueous solution;

“PLS” means the pregnant leach solution;

“ppm” means parts per million;

“PoO” means a plan of operation submitted to the BLM and the Nevada Division of Environmental Protection in respect of a proposed mineral project;

“PFS” means a pre-feasibility study;

“PwC” means PricewaterhouseCoopers LLP;

“QA/QC” means quality assurance and quality control;

“QP” means a qualified person as defined under NI 43-101;

“RC” means reverse circulation;

“Reserva” means Reserva International LLC;

“RheoMinerals” means RheoMinerals Inc., a subsidiary of the Company that develops and manufactures organophilic clay-based products;

“SEC” means U.S. Securities and Exchange Commission;

“SO₄” means sulfate;

“Social Responsibility Plan” means the social responsibility plan developed to incorporate best practices on these matters and prepared in accordance with the Argentina Principles, at the Cauchari-Olaroz Project;

“SQM” means Sociedad Química y Minera de Chile S.A.;

“Stage 1” means the initial 25,000 TPA of lithium carbonate production capacity to be covered in the Stage 1 DFS;

5

“Stage 1 Lens” means one of the five clay lenses at the Lithium Nevada Project that hosts lithium mineralization, which was formerly referred to as the “PCD Lens”;

“Stage 2 Lens” means one of the five clay lenses at the Lithium Nevada Project that hosts lithium mineralization, which was formerly referred to as the “South Lens”;

“t” means tonne;

“TEM” means Time Domain Electromagnetic Survey;

“TOLSA” means TOLSA, S.A.;

“TPA” means tonnes per annum;

“URS” means the URS Energy and Construction, Inc.;

“USBM” means the US Bureau of Mines;

“USGS” means the U.S. Geological Survey;

“VAT” means value added tax;

“VES” means a Vertical Electrical Sounding Survey; and

“WEDC” means Western Energy Development Corporation, a subsidiary of Western Uranium Corporation.

6

Schedule “B”AUDIT COMMITTEE CHARTER

The audit committee is a committee of the board of directors to which the board delegates its responsibilities for the oversight of the accounting and financial reporting process and financial statement audits.

The audit committee will:

(a) review and report to the board of directors of the Company on the following before they are published:

(i) the financial statements and MD&A (management discussion and analysis) (as defined in National Instrument 51-102) of the Company,

(ii) the auditor’s report, if any, prepared in relation to those financial statements;

(b) review the Company’s annual and interim earnings press releases before the Company publicly discloses this information;

(c) satisfy itself that adequate procedures are in place for the review of the Company’s public disclosure of financial information extracted or derived from the Company’s financial statements and periodically assess the adequacy of those procedures;

(d) recommend to the board of directors:

(i) the external auditor to be nominated for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Company, and

(ii) the compensation of the external auditor;

(e) oversee the work of the external auditor engaged for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Company, including the resolution of disagreements between management and the external auditor regarding financial reporting;`

(f) monitor, evaluate and report to the board of directors on the integrity of the financial reporting process and the system of internal controls that management and the board of directors have established;

(g) monitor the management of the principal risks that could impact the financial reporting of the Company;

(h) establish procedures for:

(i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and

(ii) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters;

1

(i) authorize the committee Chair to pre-approve all non-audit services to be provided to the Company or its subsidiary entities by the Company’s external auditor, subject to the committee Chair reporting the pre-approval(s) to the committee at the committee meeting subsequent to the said approval(s);

(j) review and approve the Company’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditor of the Company; and

(k) with respect to ensuring the integrity of disclosure controls and internal controls over financial reporting, understand the process utilized by the Chief Executive Officer and Chief Financial Officer to comply with Multilateral Instrument 52-109.

Composition of the Committee

The committee will be composed of three directors from the Company’s board of directors, all of whom are independent.

All members of the committee will be financially literate as defined by applicable legislation. If, upon appointment, a member of the committee is not financially literate as required, the person will be provided a three month period in which to achieve the required level of literacy.

Authority

The committee has the authority to engage independent counsel and other advisors as it deems necessary to carry out its duties and the committee will set the compensation for such advisors.

The committee has the authority to communicate directly with and to meet with the external auditors and the internal auditor, without management involvement. This extends to requiring the external auditor to report directly to the committee.

Reporting

The reporting obligations of the committee will include:

1. reporting to the board of directors on the proceedings of each committee meeting and on the committee’s recommendations at the next regularly scheduled directors’ meeting; and

2. reviewing, and reporting to the board of directors on its concurrence with, the disclosure required by Form 52-110F2 in any management information circular prepared by the Company.

2

EX-99.2

Exhibit 99.2

LITHIUM AMERICAS CORP.

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017

(Expressed in US Dollars)

March 28, 2018

Independent Auditor’s Report

To the Shareholders of Lithium Americas Corp.

We have audited the accompanying consolidated financial statements of Lithium Americas Corp. and its subsidiaries, which comprise the consolidated statements of financial position as at December 31, 2017, and December 31, 2016 and the consolidated statements of comprehensive loss, changes in equity and cash flows for the year ended December 31, 2017 and for the fifteen month period ended December 31, 2016, and the related notes, which comprise a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Lithium Americas Corp. and its subsidiaries as at December 31, 2017, and December 31, 2016 and their financial performance and their cash flows for the year ended December 31, 2017 and for the fifteen month period ended December 31, 2016 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

(Signed) “PricewaterhouseCoopers LLP”

Chartered Professional Accountants

Vancouver, Canada

LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Expressed in thousands of US dollars)

		December 31,			December 31,
	Note	2017			2016
		$			$
CURRENT ASSETS
Cash and cash equivalents			55,394			8,056
Restricted cash	5		833			833
Receivables, prepaids and deposits			1,017			979
Deferred financing costs	9		1,888		-
Organoclay inventories			2,086			531
			61,218			10,399
NON-CURRENT ASSETS
Restricted cash	5		983			1,817
Loans to Joint Venture	5		11,479			-
Investment in Joint Venture	5		19,637			13,136
Property, plant and equipment	6		18,070			18,502
Exploration and evaluation assets	7		2,104			1,447
			52,273			34,902
TOTAL ASSETS			113,491			45,301
CURRENT LIABILITIES
Accounts payable and accrued liabilities			3,546			1,637
Current portion of long-term borrowings	8		178			169
			3,724			1,806
LONG-TERM LIABILITIES
Long-term borrowings	8		751			902
Decommissioning provision			249			170
			1,000			1,072
TOTAL LIABILITIES			4,724			2,878
SHAREHOLDERS’ EQUITY
Share capital			197,390			108,670
Contributed surplus			20,812			11,948
Accumulated other comprehensive loss			(114	)		(2,124	)
Deficit			(109,321	)		(76,071	)
TOTAL SHAREHOLDERS’ EQUITY			108,767			42,423
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY			113,491			45,301

The Company has US$205 million of undrawn credit facility as at December 31, 2017 available to finance its share of the capital costs of the Minera Exar Joint Venture (Note 9).

Approved for issuance on March 28, 2018

On behalf of the Board of Directors:
“Gary Cohn”	Director	“George Ireland”	Director

LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Expressed in thousands of US dollars, except per share amounts; shares in thousands)

		Year ended December 31,			Fifteen months ended December 31,
	Note	2017			2016
		$			$
ORGANOCLAY SALES			4,290			1,154
COST OF SALES
Production costs			(4,565	)		(1,497	)
Inventories write down			(774	)		(648	)
Depreciation			(764	)		(476	)
Total cost of sales			(6,103	)		(2,621	)
GROSS LOSS			(1,813	)		(1,467	)
EXPENSES
Exploration expenditures	13		(4,339	)		(3,448	)
Organoclay research and development			(423	)		(536	)
General and administrative	11		(7,296	)		(6,448	)
Share of loss in Joint Venture			(4,850	)		(3,987	)
Stock-based compensation	9		(11,412	)		(3,193	)
			(28,320	)		(17,612	)
OTHER ITEMS
Foreign exchange (loss)/gain			(3,759	)		351
Convertible security accretion			-			(806	)
Loss on sale of 50% interest in Minera Exar	5		-			(9,015	)
Other income			642			825
			(3,117	)		(8,645	)
NET LOSS			(33,250	)		(27,724	)
OTHER COMPREHENSIVE LOSS
ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO NET LOSS
Reclassification of cumulative translation adjustment on sale of 50% interest in    Minera Exar	5		-			15,098
Unrealized gain/(loss) on translation to reporting currency			2,010			(16,319	)
			2,010			(1,221	)
TOTAL COMPREHENSIVE LOSS			(31,240	)		(28,945	)
LOSS PER SHARE - BASIC AND DILUTED			(0.44	)		(0.50	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES    OUTSTANDING - BASIC AND DILUTED			75,979			58,360

LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of US dollars and shares in thousands)

	Share capital
	Number		Amount			Contributed surplus			Accumulated other comprehensive loss			Deficit			Shareholders’ equity
	of Shares(1)		$			$			$			$			$
Authorized share capital:    Unlimited common shares without par value
Balance, September 30, 2015		53,297		99,318			10,847			(903	)		(48,347	)		60,915
Shares issued on exercise of stock options (Note 9)		1,226		2,106			(1,300	)		-			-			806
Shares issued on exercise of warrants (Note 9)		407		1,256			(107	)		-			-			1,149
Shares issued on conversion of Restricted shares (Note 9)		382		757			(707	)		-			-			50
Deferred share units and Restricted shares issued in lieu of salaries and directors fees (Note 9)		-		-			22			-			-			22
Shares issued for equity financing (Note 9)		3,453		3,500			-			-			-			3,500
Share issuance costs (Note 9)		-		(191	)		-			-			-			(191	)
Shares issued for convertible security		1,608		1,924			-			-			-			1,924
Stock-based compensation		-		-			3,193			-			-			3,193
Net loss		-		-			-			-			(27,724	)		(27,724	)
Other comprehensive loss		-		-			-			(1,221	)		-			(1,221	)
Balance, December 31, 2016		60,373		108,670			11,948			(2,124	)		(76,071	)		42,423
Shares issued on exercise of stock options (Note 9)		857		1,862			(1,050	)		-			-			812
Shares issued on exercise of warrants (Note 9)		1,687		5,871			(331	)		-			-			5,540
Shares issued on conversion of Restricted shares and DSUs		562		1,743			(1,743	)		-			-			-
Deferred share units and Restricted shares issued in lieu of salaries and directors fees		-		-			371			-			-			371
Shares issued for equity financing (Note 9)		25,000		80,999			-			-			-			80,999
Share issuance costs (Note 9)		-		(1,755	)		-			-			-			(1,755	)
Stock-based compensation		-		-			11,617			-			-			11,617
Net loss		-		-			-			-			(33,250	)		(33,250	)
Other comprehensive income		-		-			-			2,010			-			2,010
Balance, December 31, 2017		88,479		197,390			20,812			(114	)		(109,321	)		108,767

⁽¹⁾Share consolidation. Effective November 8, 2017, the Company implemented a consolidation of its outstanding common shares on the basis of one new common share for every five outstanding common shares (Note 2). Number of shares in the table is presented on a post-consolidation basis.

LITHIUM AMERICAS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of US dollars)

	For the twelve months ended December 31,			For the fifteen months ended December 31,
	2017			2016
	$			$
OPERATING ACTIVITIES
Net loss for the period		(33,250	)		(27,724	)
Items not affecting cash:
Stock-based compensation		11,566			3,193
Depreciation		939			894
Foreign exchange loss/(gain)		3,759			(351	)
Share of loss in Joint Venture		4,850			3,987
Convertible security accretion		-			806
Loss on sale of 50% interest in Minera Exar		-			8,374
Inventories write down		774			648
Other expense/(income)		291			(627	)
Changes in non-cash working capital items:
(Increase)/decrease in receivables, prepaids and deposits and deferred financing costs		(596	)		40
(Increase)/decrease in inventories		(2,092	)		88
Increase/(decrease) in accounts payable and accrued liabilities		845			(640	)
Net cash used in operating activities		(12,914	)		(11,312	)
INVESTING ACTIVITIES
Loans to Joint Venture (Note 5)		(11,000	)		-
Equity investment in Joint Venture (Note 5)		(13,700	)		-
Additions to exploration and evaluation assets		(626	)		(991	)
Cash received from Joint Venture, net		-			14,661
Restricted cash		834			(2,500	)
Additions to property, plant and equipment (Note 6)		(1,059	)		(640	)
Net cash (used in)/provided by investing activities		(25,551	)		10,530
FINANCING ACTIVITIES
Proceeds from stock options exercises		812			806
Proceeds from warrants exercises		5,540			1,149
Repayment of convertible security funding		-			(1,653	)
Net proceeds from equity financing (Note 9)		79,244			3,482
Finance lease repayments		(46	)		(52	)
Repayment of long-term borrowing		(125	)		(147	)
Net cash provided by financing activities		85,425			3,585
EFFECT OF FOREIGN EXCHANGE ON CASH		378			(299	)
CHANGE IN CASH AND CASH EQUIVALENTS		47,338			2,504
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		8,056			5,552
CASH AND CASH EQUIVALENTS - END OF PERIOD		55,394			8,056

Supplemental disclosure with respect to cash flows (Note 15)

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

1. NATURE OF OPERATIONS

Lithium Americas Corp. (“Lithium Americas” or the “Company”) is a Canadian based resource company focused on advancing two significant lithium projects, the Cauchari-Olaroz project, located in Jujuy province of Argentina, and the Lithium Nevada project (formerly the Kings Valley project), located in north-western Nevada, USA, and on the manufacturing and sales of organoclay products.

The Company’s organoclay plant located in Fernley, Nevada, USA manufactures specialty organoclay products, derived from clays, for sale to the oil and gas and other sectors.

The Company’s common shares are listed on the Toronto Stock Exchange and, subsequent to the year end, became listed on the New York Stock Exchange under the symbol "LAC".

The Company’s head office and principal address is Suite 1150-355 Burrard Street, Vancouver, British Columbia, Canada, V6C 2G8. Effective August 11, 2017 the Company’s registered and records office is 2200-885 West Georgia Street, Vancouver, British Columbia, Canada, V6C 3E8.

To date, the Company has not generated significant revenues from operations and has relied on equity and other financings to fund operations. The underlying values of exploration and evaluation assets and investment in joint venture are dependent on the existence of economically recoverable reserves, securing and maintaining title and beneficial interest in the properties, the ability of the Company to obtain the necessary financing to complete permitting, development, and to attain future profitable operations.  

2. BASIS OF PREPARATION AND PRESENTATION

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These consolidated financial statements were approved for issuance by the Board of Directors on March 28, 2018.

These consolidated financial statements are expressed in US dollars, the Company’s presentation currency, and have been prepared on a historical cost basis. The accounting policies set out in Note 3 have been applied consistently to all years presented in these consolidated financial statements.

As authorized by its shareholders, the Company implemented a consolidation of its outstanding common shares effective from November 8, 2017 on the basis of one new common share for every five outstanding common shares. The share consolidation affected all issued and outstanding common shares, options and warrants. All information relating to basic and diluted earnings per share, issued and outstanding common shares, share options (note 9), restricted share units (note 9), deferred share units (note 9) and warrants (note 9), and per share amounts in these consolidated financial statements have been adjusted retrospectively to reflect the share consolidation.

The Company changed its fiscal year end from September 30 to December 31, effective 2016, so the comparative period is the fifteen-month period from October 1, 2015 to December 31, 2016. The Company changed its year end in order to align it with the Joint Venture (as defined in Note 5) for reporting and planning purposes as well as to bring its financial reporting timetable in line with the other companies in the industry.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

3. SIGNIFICANT ACCOUNTING POLICIES

Critical Accounting Estimates and Judgements

The preparation of these financial statements in conformity with IFRS requires judgments, estimates, and assumptions that affect the amounts reported.  Those estimates and assumptions concerning the future may differ from actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The following are the estimates, assumptions and areas of judgment applied by management that most significantly affect the Company’s financial statements:

Commercial viability and technical feasibility of the Cauchari-Olaroz project

The application of the Company’s accounting policy for exploration and evaluation assets requires judgement in assessing when the commercial viability and technical feasibility of the Cauchari-Olaroz project has been determined, at which point the asset is reclassified to property, plant and equipment.  In the judgement of the Company, the commercial viability and technical feasibility of the Cauchari-Olaroz project has been demonstrated effective July 1, 2017.

Impairment of exploration and evaluation assets

The application of the Company’s accounting policy for impairment of exploration and evaluation assets requires judgment to determine whether indicators of impairment exist including information such as, the period for which the Company has the right to explore including expected renewals, whether substantive expenditures on further exploration and evaluation of resource properties are budgeted and evaluation of the results of exploration and evaluation activities up to the reporting date. Management has performed an impairment indicators assessment on the Company’s exploration and evaluation assets and has concluded that no impairment indicators exist as of December 31, 2017.

Impairment of other long lived assets

The application of the Company’s accounting policy for impairment of its investment in joint venture and property, plant and equipment requires judgment to determine whether indicators of impairment exist. The review of impairment indicators includes consideration of both external and internal sources of information, including factors such as market and economic conditions, taxation, prices and forecasts, capital expenditure requirements, future operating costs and production volumes. Management has assessed impairment indicators on the Company’s investment in joint venture and property, plant and equipment and has concluded that no impairment indicators exist as of December 31, 2017.

Principles of Consolidation

The consolidated financial statements contained herein include the accounts of Lithium Americas Corp. and its wholly-owned USA subsidiaries Lithium Nevada Corp., KV Project LLC, and RheoMinerals Inc., and Canadian wholly-owned subsidiary 2265866 Ontario Inc. All inter-company transactions and balances have been eliminated.

Subsidiaries are all entities over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

3.SIGNIFICANT ACCOUNTING POLICIES (continued)

Investments in Joint Arrangements

A joint arrangement is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. Joint control is the contractually agreed sharing of control such that significant operating and financial decisions require the unanimous consent of the parties sharing control. The Company’s arrangement with respect to Cauchari-Olaroz project is classified as a joint venture and is accounted for using the equity method. The equity method involves recording the initial investment at cost. When a joint venture is formed from a previous investment in a subsidiary, the Company made a policy choice decision to recognize a gain or loss on change of control in relation to the portion of the investment no longer owned based upon the carrying value of the assets.  Additional funding into an investee is recorded as an increase in the carrying value of the investment. The carrying amount is adjusted by the Company’s share of a joint venture’s net income or loss, depreciation, amortization or impairment and foreign currency differences arising on translation from functional to the presentation currency. When the Company’s share of losses of a joint venture exceeds the Company’s carrying value of the investment, the Company discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the joint venture.

Foreign Currency Translation

Functional and Presentation Currency

Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency).  The consolidated financial statements are presented in US dollars. The functional currency of all subsidiaries in the Company’s group other than Lithium Americas Corporation is the US dollar, while the functional currency of Lithium Americas Corporation is the Canadian dollar. The functional currency of the Company’s Joint Venture is the Argentinian Peso.

Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss. They are deferred in equity if they are attributable to part of the net investment in a foreign operation. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.  

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognized in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equities classified as available-for-sale financial assets are recognized in other comprehensive income.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

3.SIGNIFICANT ACCOUNTING POLICIES (continued)

Parent and Subsidiary Companies

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each reporting date are translated at the closing rate at that reporting date;

• income and expenses are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and

• all resulting exchange differences are recognized in other comprehensive loss.

The Company recognizes its share of the exchange differences of its joint ventures which result from translation of the results and financial position of its foreign joint ventures from the functional to the presentation currency.  

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from the item are considered to form part of the net investment in a foreign operation and are recognized in other comprehensive income.

When an entity disposes of its entire interest in a foreign operation, or loses control, joint control, or significant influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive income related to the foreign operation are recognized in profit or loss. If an entity disposes of part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in other comprehensive income related to the subsidiary is reallocated between controlling and non-controlling interests.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash held with banks and highly liquid short-term investments in high interest saving accounts which can be withdrawn at any time, which is subject to an insignificant risk of changes in value.

Exploration and Evaluation Assets

Exploration expenditures not including the acquisition costs and claim maintenance costs are expensed as incurred until an economic feasibility study has established the presence of proven and probable reserves and development of the project has commenced, at which time exploration and development expenditures incurred on the property thereafter are capitalized. The establishment of technical feasibility and commercial viability of a mineral property is assessed based on a combination of factors, including:

• The extent to which mineral reserves or mineral resources as defined in National Instrument 43-101 (“NI 43-101”) have been identified through a feasibility study or similar document;

• The status of environmental permits; and

• The status of mining leases or permits.

Costs incurred relating to the acquisition and claim maintenance of mineral properties, including option payments and annual fees to maintain the property in good standing, are capitalized and deferred by property until the project to which they relate is sold, abandoned, impaired or placed into production.  After recognition, the Company uses the cost model for exploration and evaluation assets.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company assesses its capitalized mineral property costs for indications of impairment on each balance sheet date and when events and circumstances indicate a risk of impairment.  A property is written down or written off when the Company determines that an impairment of value has occurred or when exploration results indicate that no further work is warranted. Exploration and evaluation assets are tested for impairment immediately prior to reclassification to mineral property development costs.

Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title.  Such properties may be subject to prior agreements or transfers, or title may be affected by undetected defects.

Property, Plant and Equipment

On initial recognition, property, plant and equipment are valued at cost. Cost includes the purchase price and directly attributable cost of acquisition or construction required to bring the asset to the location and condition necessary to be capable of operating in the manner intended by the Company, including appropriate borrowing costs.  During the development and commissioning phase, pre-production expenditures, net of incidental proceeds from sales during this period, are capitalized to the asset under construction and equipment.  Capitalization of costs incurred ceases when commercial production commences in the manner intended by management.  The Company applies judgment in its assessment of when the asset is capable of operating in the manner intended by management.

Property, plant and equipment are subsequently measured at cost less accumulated depreciation, less any accumulated impairment losses, with the exception of land which is not depreciated.  When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items or major components.

Property, plant and equipment that are currently in use are depreciated as follows:

• Organoclay plant – straight-line basis over the estimated useful life of 20 years;

• Buildings – straight-line basis over the estimated useful life of 20 years;

• Organoclay plant equipment included in “Equipment and machinery” – straight line basis over the estimated life of 5-20 years;

• Lithium demo plant equipment included in “Equipment and machinery” – straight-line basis over the estimated useful life of 10 years;

• Office equipment included in “Other” – declining balance method at 20% annual rate; and

• Other equipment included in “Other” – straight-line basis over the estimated useful life of 7-15 years.

The assets’ residual values, useful lives and depreciation methods are reviewed and adjusted, if appropriate, at each financial year-end.  The gain or loss arising on the disposal of an item of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in profit and loss.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of Property, Plant and Equipment

Property, plant and equipment are assessed for impairment indicators at each reporting date or when an impairment indicator arises if not at a reporting date.  Impairment indicators are evaluated and, if considered necessary, an impairment assessment is carried out.  If an impairment loss is identified, it is recognized for the amount by which the asset’s carrying amount exceeds it recoverable amount.  The recoverable amount is the higher of an asset’s fair value less cost of disposal and value in use.  

Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.  For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).  These are typically individual mines, plants or development projects.  

Where the factors which resulted in an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years.  A reversal of an impairment loss is recognized immediately in profit or loss.

Leased Assets

Finance leases, which transfer to the Company substantially all the risks and rewards incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments.  The corresponding lease commitment is shown as a liability.  Lease payments are apportioned between capital and interest. Interest charges are capitalized to asset under construction during the development and commissioning phase. The capital element reduces the balance owed to the lessor.

Inventories

Organoclay products, in-process and stockpile inventories are recorded at the lower of average cost and net realizable value. The cost of finished goods and work-in-progress is determined by the weighted average cost method and comprises raw materials, direct labour, and other direct costs, as well as related production overheads including applicable depreciation on property, plant and equipment.  Net realizable value is the estimated selling price less applicable selling expenses.  When inventories have been written down to net realizable value, a new assessment of net realizable value is made in each subsequent period.  When the circumstances that caused the write down no longer exist, the amount of the write down is reversed.  

Materials and supplies inventories are valued at the lower of average cost and net realizable value.  Cost includes acquisition, freight and other directly attributable costs.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial Instruments

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.  Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

All of the Company’s financial instruments are classified into one of the following categories: loans and receivables or other financial liabilities.  All financial instruments are measured in the statement of financial position at fair value initially.  Loans and receivables and other financial liabilities are subsequently measured at amortized cost.  

The Company does not use derivative instruments or hedges to manage risks.

Cash and receivables and short-term restricted cash have been designated as loans and receivables and are included in current assets due to their short-term nature. Loans to the Joint Venture and long-term restricted cash have been designated as loans and receivables and are included in non-current assets due to their long-term nature. The Company’s other financial liabilities include accounts payable and accrued liabilities, long-term borrowing, convertible security, and obligation under finance leases.

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of assets requiring a substantial period of time to get ready for their intended use or sale are capitalized as part of the cost of that asset. Capitalization of borrowing costs begin when there are borrowings and activities commence to prepare an asset for its intended use. Capitalization of borrowing costs ends when substantially all activity necessary to prepare a qualifying asset for its intended use are complete. When proceeds of project specific borrowings are invested on a temporary basis, borrowing costs are capitalized net of any investment income.  

Provisions

Provisions are recognized when the Company has a present obligation, legal or constructive, as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.  Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Close down and restoration costs include dismantling and demolition of infrastructure and the removal of residual materials and remediation of disturbed areas.  Estimated close down and restoration costs are provided for in the accounting period when the obligation arising from the related disturbance occurs, based on the net present value of estimated future costs.  The cost estimates are updated during the life of the operation to reflect known development, such as revisions to cost estimates and to the estimated lives of the operations, and are subject to formal reviews at regular intervals.  The initial closure provision together with changes resulting from changes in estimated cash flows or discount rates are capitalized within capital assets.  These costs are then depreciated over the lives of the asset to which they relate, typically using the units of production method.  The amortization or unwinding of the discount applied in establishing the net present value of provisions is charged to the statement of comprehensive (loss)/income as a financing cost.  Provision is made for the estimated present value of the costs of environmental cleanup obligations outstanding at the statement of financial position date

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

Income tax expense comprises current and deferred tax.  Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity.  Current tax expense is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at period-end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is recorded using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.  Temporary differences are not provided for the initial recognition of assets or liabilities that affect neither accounting or taxable loss, nor differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.  The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.  To the extent that the Company does not consider it probable that a deferred tax asset will be recovered, the deferred tax asset is not recorded.

Share Capital

Common shares are classified as equity.  Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity.

Revenue

Organoclay products revenue is recognized when it is probable that the economic benefits will flow to the Company, risks and rewards of ownership are transferred to the customer, delivery has occurred, the sales price is reasonably determinable, and collectability is reasonably assured.  These criteria are generally met at the time the product is shipped or delivered to the customer and, depending on the delivery conditions, title and risk have passed to the customer and acceptance of the product, when contractually required, has been obtained.  Revenue is measured based on the price specified in the sales contract, net of discounts, at the time of sale.

Earnings/(Loss) per Share

Basic earnings/(loss) per share is computed by dividing net loss attributable to shareholders of the Company by the weighted average number of common shares outstanding during the reporting period. The diluted loss per share calculation is based on the weighted average number of common shares outstanding during the period, plus the effects of dilutive common share equivalents.  This method requires that the dilutive effect of outstanding options and warrants issued should be calculated using the treasury stock method.  This method assumes that all common share equivalents have been exercised at the beginning of the period (or at the time of issuance, if later), and that the funds obtained thereby were used to purchase common shares of the Company at the average trading price of the common shares during the period, but only if dilutive.

Stock-Based Compensation

The Company grants stock options to buy common shares of the Company to directors, officers, employees and service providers.  The fair value of stock options granted by the Company is treated as compensation costs in accordance with IFRS 2, Share-based Payment.  These costs are charged to the statement of comprehensive (loss)/income over the stock option vesting period.  

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Each tranche in an award is considered a separate award with its own vesting period and grant date fair value.  Fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model.  Compensation expense is recognized over the tranche’s vesting period based on the number of awards expected to vest, by increasing contributed surplus.  The number of awards expected to vest is reviewed at least annually with any impact being recognized immediately. Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in the statement of comprehensive (loss)/income, unless they are related to the issuance of shares.  Amounts related to the issuance of shares are recorded as a reduction of share capital.  When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model.  

The Company’s equity incentive plan also allows the grant of restricted shares and deferred share units. The cost of equity-settled payment arrangements is recorded based on the estimated fair value at the grant date and charged to earning over the vesting period.

Organoclay Product Development

Expenditure on research activities related to the obtaining of new scientific or technical knowledge is expensed as incurred.  Expenditure on development activities, whereby the research results or other knowledge is applied to accomplish new or improved products or processes, is recognized as an intangible asset in the statement of financial position, provided the product or process is technically and commercially feasible and the Company has sufficient resources to complete development, and is subsequently able to use or sell the intangible asset.  The carrying amount includes the directly attributable expenditure, such as the cost of materials and services, costs of employee benefits, fees to register intellectual property rights and amortization of patents and licenses.  In the statement of financial position, product development are stated at cost less accumulated amortization and any impairment losses.

Recent Accounting Pronouncements

Accounting standards and amendments issued but not yet adopted

IFRS 9, Financial Instruments (“IFRS 9”), addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in International Accounting Standard (“IAS”) 39 that relates to the classification and measurement of financial instruments.

IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortized cost, fair value through other comprehensive income (“FVOCI”) and fair value through profit and loss (“FVTPL”). There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39.

For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in OCI, for liabilities designated as FVTPL.  The standard is effective for accounting periods beginning on or after January 1, 2018. The Company has determined that adoption of this standard will have no significant impact on the consolidated financial statements.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

IFRS 15, Revenue from Contracts with Customers (“IFRS 15”), deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.  IFRS 15 was issued in May 2014 by the IASB.  Under IFRS 15, revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service.  The standard replaces IAS 18, Revenue, and IAS 11, Construction Contracts, and related interpretations.  The standard is effective for annual periods beginning on or after January 1, 2018. The Company has determined that adoption of this standard will have no significant impact on the consolidated financial statements.

IFRS 16, Leases (“IFRS 16”), was issued in January 2016 by the IASB.  According to the new standard, all leases will be on the statement of financial position of lessees, except those that meet the limited exception criteria.  The standard is effective for annual periods beginning on or after January 1, 2019.  The Company is currently evaluating the effect the standard will have on its consolidated financial statements.

4. CASH AND CASH EQUIVALENTS

	As at December 31,		As at December 31,
	2017 $		2016 $
Cash		6,319		1,449
Short-term bank deposits		49,075		6,607
		55,394		8,056

As at December 31, 2017 $5,898 of cash is held in CAD (December 31, 2016 – 250) and $421 in USD (December 31, 2016 – 1,199) and earn interest between 0.25-1.5%. Short-term bank deposits are held in USD and earn interest between 1-2%.

5. JOINT VENTURE

On March 28, 2016, the Company entered into an agreement with SQM to form a 50/50 joint venture on the Cauchari-Olaroz project in Jujuy, Argentina (“Joint Venture”).

The Joint Venture is governed by a Shareholders Agreement which provides for (i) equal representation by the Company and SQM on its Shareholders’ Committee, (ii) unanimous approval by the Company and SQM on budgets and timing of expenditures, (iii) the right to purchase a 50% share of production and (iv) buyout and termination provisions in the event that SQM chooses not to proceed with the project.

In May 2016, SQM and the Company also entered into an Escrow Agreement requiring the Company to deposit $2,500 of the $15,000 contribution (the “Escrow Amount”) into an escrow account.  Subject to certain provisions, the Escrow Amount will be released to the Company over three years as follows: $833 was received in April 2017, $833 will be released on March 28, 2018, and $833 will be released on March 28, 2019.  The Escrow Amount can be used to pay certain contingent liabilities of Minera Exar, if any arise, related to the actions prior to the Joint Venture formation.  The Company has also provided a guarantee for up to $354 in transaction related costs in the event that such costs arise in the future. Effective July 1, 2017, the Joint Venture’s Cauchari-Olaroz project entered the development phase.  Accordingly, all costs directly attributable to the project are capitalized.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

5. JOINT VENTURE (continued)

Investment in Joint Venture

The changes in investment in the Joint Venture since initial contribution are as follows:

Initial contribution to Joint Venture – March 28, 2016	$
50% of net asset value of Minera Exar		13,276
50% of contribution for Joint Venture project development		5,000
Total initial contribution		18,276
Share of loss of Joint Venture		(3,987	)
Translation adjustment		(1,153	)
Investment in Joint Venture – December 31, 2016		13,136
Share of loss of Joint Venture		(4,850	)
Translation adjustment		(2,127	)
Contribution to Joint Venture by LAC		13,717
Elimination of unrealized gains on intercompany transactions		(239	)
Investment in Joint Venture – December 31, 2017		19,637

In October 2017, the Company made an irrevocable capital contribution, proportionate to its 50% interest in the Joint Venture, for future capital increases in Minera Exar in an amount of $13,300 to develop, explore, and operate the Cauchari-Olaroz project.

The following amounts represent the amounts presented in the financial statements of Minera Exar. They have been amended to reflect modifications for differences in accounting policies.

	December 31, 2017			December 31, 2016
	$			$
Current assets
Cash and cash equivalents		9,198			3,119
Other current assets		2,410			1,281
Total current assets		11,608			4,400
Non-current assets		66,821			28,261
Current liabilities		(13,189	)		(6,268	)
Non-current liabilities		(26,323	)		(121	)
Net assets		38,917			26,272

Summarized statement of loss from operations	For the year ended December 31, 2017		For the period March 28, 2016 - December 31, 2016
	$		$
Exploration expenditures		8,898		8,060
Depreciation		213		24
Other expenses/(income)		589		(108	)
Loss from continuing operations		9,700		7,976

Loans to Joint Venture

During the year ended December 31, 2017, the Company entered into two loan agreements and advanced $11,000 to Minera Exar. The rate of interest on the first loan with a principal amount of $5,000 is 12-month LIBOR plus 3% and is calculated on the basis of a 360-day year. The maturity date of the first loan is two years following the drawdown date. The rate of interest on the second loan with a principal amount of $6,000 is 12-month LIBOR plus 10% and is calculated on the basis of a 360-day year. The maturity date of the second loan is fifteen years following the drawdown date. The interest on both loans is accrued on a non–compounding basis. The proceeds from the loans were used by Minera Exar for mining exploration or mining construction and development purposes.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

5. JOINT VENTURE (continued)

Joint Venture Commitments and Contingencies

As at December 31, 2017, the Company’s 50% portion of the Joint Venture’s commitments and contingencies are as follows:

• Annual royalty of $100 due in May of every year and expiring in 2041;

• Aboriginal programs agreements with six communities located in the Cauchari-Olaroz project area have terms from five to thirty years.  The annual fees due are $88 between 2017 and 2021 and $131 between 2021 and 2059, assuming that these payments will be extended for the life of the project.  These payments will be incurred only if the Joint Venture starts production.

Los Boros Option Agreement

On March 28, 2016, the Joint Venture entered into a purchase option agreement (“Option Agreement”) with Grupo Minero Los Boros (“Los Boros”) for the transfer of title to the Joint Venture for certain mining properties that comprised a portion of the Cauchari-Olaroz project.  Under the terms of the Option Agreement, the Joint Venture paid $100 (the Company’s portion was $50) upon signing and has a right to exercise the purchase option at any time within 30 months for the total consideration of $12,000 (the Company’s portion is $6,000) to be paid in sixty quarterly instalments of $200 (the Company’s portion is $100).  The first installment becomes due upon occurrence of one of the following two conditions, whichever comes first: third year of the purchase option exercise date or the beginning of commercial exploitation with a minimum production of 20,000 tons of lithium carbonate equivalent. As a security for the transfer of title for the mining properties under the Option Agreement, Los Boros granted to the Joint Venture a mortgage for $12,000.  

If the Joint Venture exercises the purchase option, the following royalties will have to be paid to Los Boros:

• $300 (the Company’s portion is $150) within 10 days of the commercial plant construction start date; and

• 3% net profit interest (the Company’s portion is 1.5%) for 40 years, payable in pesos, annually within the 10 business days after calendar year end.

The Joint Venture can cancel the first 20 years of net profit interest in exchange for a one-time payment of $7,000 (the Company’s portion is $3,500) and the next 20 years for additional $7,000 (the Company’s portion is $3,500).  

JEMSE Arrangement

During 2012 Minera Exar granted a conditional right to Jujuy Energia y Mineria Sociedad del Estado (“JEMSE”), a mining investment company owned by the government of Jujuy Province in Argentina, to acquire an 8.5% equity interest in Minera Exar for one US dollar and provide management services as required to develop the project.  

Ifthe conditions are met and it exercises its right, JEMSE will be required to provide its pro rata (8.5%) share of the financing requirements for the construction of the Cauchari-Olaroz project.  These funds will be loaned to JEMSE by the shareholders of Minera Exar and will be repayable out of one‑third of the dividends to be received by JEMSE over future years from the project. The distribution of dividends to JEMSE and other shareholders in the project will only commence once all annual commitments related to the project debt have been met.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

6. PROPERTY, PLANT AND EQUIPMENT

	Land		Buildings		Equipment and machinery			Organoclay plant		Other			Total
	$		$		$			$		$			$
Cost
As at September 30, 2015		371		1,957		5,068			11,149		356			18,901
Additions		15		184		88			346		70			703
Disposition		-		-		-			-		(29	)		(29	)
Contribution to Joint Venture		-		-		-			-		(12	)		(12	)
Foreign exchange		-		-		-			-		(3	)		(3	)
As at December 31, 2016		386		2,141		5,156			11,495		382			19,560
Additions		-		2		805			-		254			1,061
Write down		-		-		(399	)		-		-			(399	)
As at December 31, 2017		386		2,143		5,562			11,495		636			20,222

	Land		Buildings		Equipment and machinery			Organoclay plant		Other			Total
	$		$		$			$		$			$
Accumulated depreciation
As at September 30, 2015		-		-		112			-		76			188
Depreciation for the year		-		76		335			431		52			894
Disposition		-		-		-			-		(20	)		(20	)
Contribution to Joint Venture		-		-		-			-		(4	)		(4	)
As at December 31, 2016		-		76		447			431		104			1,058
Depreciation for the year		-		107		366			575		76			1,124
Disposition		-		-		(30	)		-		-			(30	)
As at December 31, 2017		-		183		783			1,006		180			2,152

	Land		Buildings		Equipment and machinery		Organoclay plant		Other		Total
	$		$		$		$		$		$
Net book value
As at December 31, 2016		386		2,065		4,709		11,064		278		18,502
As at December 31, 2017		386		1,960		4,779		10,489		456		18,070

7. EXPLORATION AND EVALUATION ASSETS

	December 31, 2017
	Lithium Nevada
	$
Acquisition costs
Balance, beginning		1,447
Additions		706
Write offs		(49	)
Total exploration and evaluation assets		2,104

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

7. EXPLORATION AND EVALUATION ASSETS (continued)

	December 31, 2016
	Lithium Nevada $		Cauchari- Olaroz $			Total $
Acquisition costs
Balance, beginning		958		41,665			42,623
Additions		489		71			560
Change in foreign exchange rate		-		(14,874	)		(14,874	)
Sale of 50% of net assets		-		(13,431	)		(13,431	)
Contribution to Joint Venture		-		(13,431	)		(13,431	)
Total exploration and evaluation assets		1,447		-			1,447

The Company has the following future payments and royalties on Lithium Nevada project. These payments will only be incurred if the Company continues to hold the subject claims in the future and the royalties will only be incurred if the Company starts production from the Lithium Nevada project.  

• $50 annual advance net smelter return royalty payment due on January 21 on certain mining claims.  The Company’s interest in these claims is subject to a 3% net smelter return royalty;

• $2 per year in advance net smelter return royalty payments due on November 15 on four mining claims.  The Company’s interest in these claims is subject to a 1.5% net smelter return royalty;

• 20% royalty on revenue solely in respect of uranium;

• 8% gross revenue royalty on all claims up to a cumulative payment of $22,000.  The royalty will then be reduced to 4% for the life of the project.  The Company has the option at any time to reduce the royalty to 1.75% upon payment of $22,000.

The Company has future royalties from sales of organoclay products manufactured at the facility in Saudi Arabia owned by Delmon Co Ltd. and receivable pursuant to its “Technical Assistance and Royalty Agreement”. The agreement was entered into on November 17, 2016 and includes a 12.5% net profit royalty payable for 7 years from the manufacturing completion date (as defined in the abovementioned agreement) and a 3% gross profit royalty on new products payable for 7 years from the date of sale of any new product.

8. LONG-TERM BORROWING

	As at December 31,		As at December 31,
	2017 $		2016 $
Current portion of long-term borrowings
Promissory note		130		125
Obligation under finance leases		48		44
		178		169
Long-term borrowings
Promissory note		703		833
Obligation under finance leases		48		69
		751		902
		929		1,071

Promissory Note

In July 2013, the Company purchased an industrial complex in the City of Fernley, Nevada to be the production site for its organoclay plant.  

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

8. LONG-TERM BORROWING (continued)

The property was purchased for $1,575, of which $236 was paid at the close of the transaction, and the remaining balance of $1,339 was financed by the seller with a ten-year promissory note payable in monthly instalments.  The promissory note bears 5.25% annual interest for the first five years, and then at a reset interest rate of between 5.5% to 7.5% for the final five years, depending on the prime rate at the time of reset.  Security provided for the promissory note includes a mortgage charge against the purchased property.

9. ISSUED CAPITAL, EQUITY COMPENSATION, AND WARRANTS

Ganfeng and Bangchak Investment Agreements

During the year ended December 31, 2017, the Company completed the closing of the investment agreement (the “Ganfeng Investment Agreement”) with GFL International Co., Ltd. (“Ganfeng”) and the investment agreement (the “Bangchak Investment Agreement”) with The Bangchak Petroleum Public Company Limited (“Bangchak”) through its wholly-owned subsidiary, BCP Innovation Pte Ltd (“BCPI”) for funding to advance the construction of the Cauchari-Olaroz lithium project in Jujuy, Argentina. Pursuant to these agreements, each of Ganfeng and Bangchak agreed to co-invest in the Company through a mixture of equity subscriptions and debt financing.

The investment agreements consisted of four key components:

• An equity financing by each of Ganfeng and Bangchak.  Ganfeng subscribed for 15,000 common shares while BCP subscribed for 10,000 common shares at a price of CDN$4.25 per common share, for gross proceeds of approximately CDN$106,000 ($80,999).

• A $205,000 credit facility.  Under this agreement, each of Ganfeng and Bangchak have committed to advance $125,000 and $80,000 respectively, with proceeds to be used to fund the Company’s share of project development contributions for Stage 1 of the Cauchari-Olaroz project.  As of December 31, 2017, the Company has not drawn down on this credit facility.

• Off-take entitlements in favour of Ganfeng and Bangchak for the purchase of up to 80% and 20% respectively, of the Company’s share of Cauchari-Olaroz Project Stage 1 lithium carbonate production at market prices. The off-take agreements each have a term of 20 years following commencement of commercial production.

• Investor Rights Agreement.  The Company entered into an Investor Rights Agreement with each of Ganfeng and Bangchak.  Pursuant to these agreements, Ganfeng and Bangchak each have the right to nominate one individual to the board of directors of the Company so long as they maintain a 15% or more interest in the Company’s issued share capital.  Each of Ganfeng and Bangchak have a participation right in connection with future financings to maintain a 17.5% interest and 16.4% interest respectively, so long as they maintain a 15% or more interest in the Company’s issued share capital. 

The parties settled relevant agreements and satisfied all conditions over the course of the first half of 2017, and on July 14, 2017 completed the remaining equity subscriptions and entered into definitive agreements. The Company provided corporate guarantees, to both lenders, Bangchak and Ganfeng, in connection with the debt facility.

Financing costs of $1,755, related to the equity portion of the Ganfeng and Bangchak financings, were recorded as share issuance costs. Financing costs of $1,888, related to the debt portion of the Ganfeng and Bangchak financings, are deferred and included in receivables, prepaids, and deposits and will be amortized over the terms of the loans. $1,361 of these costs are included in accounts payable and accrued liabilities on December 31, 2017.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

9. ISSUED CAPITAL, EQUITY COMPENSATION, AND WARRANTS (continued)

Equity Incentive Plan

The Company has an equity incentive plan (“Plan”) in accordance with the policies of the TSX whereby, from time to time, at the discretion of the Board of Directors, eligible directors, officers, employees and consultants are: (1) granted incentive stock options exercisable to purchase common shares (“Stock Options”); (2) awarded restricted share rights (“RSs”) that convert automatically into common shares upon vesting; and (3) for eligible directors, awarded deferred share units (“DSUs”) which the directors are entitled to redeem for common shares upon retirement or termination from the Board.  Under the Plan, common shares reserved for issuance of Stock Options, RSs and DSUs shall not exceed 10% of the outstanding shares from time to time. The exercise price of each stock option is based on the fair market price of the Company’s common shares at the time of the grant.  The options can be granted for a maximum term of five years.

Restricted Shares

During the year ended December 31, 2017, the Company granted 1,589 RSs to its directors, executive officers, consultants and employees.  The total estimated fair value of the RSs was $7,883 based on the market value of the Company’s shares on the grant date.  The fair value of 27 RSs that were granted in lieu of deferred salaries was recorded as a reduction of accrued liabilities, and the fair value of the remaining 1,562 RSs is being recorded as a share-based payments expense and charged to operating expenses over the vesting period.  

As at December 31, 2017, $748 of the fair value of RSs previously granted but not yet vested remains to be expensed in fiscal 2018, $183 in 2019 and $28 in 2020.

During the year ended December 31, 2017, the fair value of RSs of $6,989 was recorded as a share-based payments expense and charged to operating expenses (fifteen-month period ended December 31, 2015 - $1,682), $89 was charged to cost of sales (fifteen-month period ended December 31, 2015 - nil) and $1 was allocated to inventory (fifteen-month period ended December 31, 2015 - nil).  

A summary of changes to the number of restricted shares is as follows:

	Number of RSs (in 000's)
Balance, RSs September 30, 2015		-
Granted		873
Converted into common shares		(383	)
Balance, RSs December 31, 2016		490
Granted		1,589
Converted into common shares		(521	)
Forfeited		(8	)
Balance, RSs December 31, 2017		1,550

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

9. ISSUED CAPITAL, EQUITY COMPENSATION, AND WARRANTS (continued)

Equity Incentive Plan (continued)

Deferred Share Units

During the year ended December 31, 2017 the Company granted 73 DSUs with the total estimated fair value of $336 to the Company’s directors in lieu of the directors’ fees payments.

	Number of DSUs (in 000's)
Balance, DSUs September 30, 2015		-
Granted		9
Balance, DSUs December 31, 2016		9
Granted		73
Converted into common shares		(41	)
Balance, DSUs December 31, 2017		41

Stock Options

During the year ended December 31, 2017, the Company granted a total of 3,085 stock options to its directors, officers, and employees.  The fair value of stock options granted are estimated on the dates of grants using the Black-Scholes Option Pricing Model with the following assumptions used for the grants made during the period:

	April 4, 2017			April 4, 2017			May 16, 2017			Sep 14, 2017			Nov 27, 2017			Dec 22, 2017
Number of options granted (‘000’s)		835			200			100			1,860			60			30
Exercise price per share (CDN$)	$	4.90		$	4.90		$	5.00		$	8.05		$	12.34		$	11.07
Risk-free interest rate		0.7	%		0.7	%		0.7	%		1.6	%		1.6	%		1.8	%
Expected life	3			3			3			3			3			3
Annualized volatility		73	%		73	%		72	%		69	%		66	%		73	%
Dividend rate	-			-			-			-			-			-
Fair value per stock option granted (CDN$)	$	2.10		$	2.10		$	2.35		$	3.75		$	5.52		$	5.32
Total fair value of stock options granted (CDN$)	$	1,754		$	420		$	235		$	6,975		$	331		$	160

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

9. ISSUED CAPITAL, EQUITY COMPENSATION, AND WARRANTS (continued)

Equity Incentive Plan (continued)

Stock Options (continued)

Stock options outstanding and exercisable as at December 31, 2017 are as follows:

	Options Outstanding				Options Exercisable
Range of Exercise Prices CDN$	Number Outstanding as at December 31, 2017 (in 000's)		Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price CDN$	Number Exercisable as at December 31, 2017 (in 000's)		Weighted Average Exercise Price CDN$
$1.35 - $1.50		1,074	1.75	1.44		1,074	1.44
$1.70 - $1.90		327	1.57	1.81		327	1.81
$2.35 - $3.75		820	3.12	2.61		820	2.61
$4.80 - $5.00		1,172	4.19	4.88		624	4.87
$8.05 - $11.05		1,913	4.72	8.23		478	8.23
		5,306	3.56	4.85		3,323	3.39

A summary of changes to stock options outstanding is as follows:

	Number of Options (in 000's)			Weighted Average Exercise Price, (CDN$)
Balance, outstanding September 30, 2015		3,466			2.15
Granted		1,873			2.30
Exercised		(1,602	)		1.75
Expired		(290	)		6.15
Forfeited		(23	)		2.25
Balance, outstanding December 31, 2016		3,424			2.15
Granted		3,085			7.01
Exercised		(1,073	)		2.22
Forfeited		(130	)		5.20
Balance, outstanding December 31, 2017		5,306			4.85

During the year ended December 31, 2017, 608 (fifteen-month period ended December 31, 2016 – 933) options were exercised under the cashless exercise provision of the Company’s stock option plan, resulting in the issuance of 392 (fifteen-month period ended December 31, 2016 – 558) shares of the Company.  

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

9. ISSUED CAPITAL, EQUITY COMPENSATION, AND WARRANTS (continued)

Equity Incentive Plan (continued)

Stock Options (continued)

Stock-based compensation expense related to stock options of $4,423 (fifteen-month period ended December 31, 2016 - $1,511) was charged to operations $65 was charged to cost of sales (fifteen-month period ended December 31, 2015 - nil) and $50 was allocated to inventory (fifteen-month period ended December 31, 2015 - nil). At December 31, 2017, $3,052 of the fair value of stock options previously granted but not yet vested remains to be expensed in fiscal 2018, and $224 in fiscal 2019.  The weighted-average share price on the date of the stock options exercised was CDN$6.22 (fifteen-month period ended December 31, 2016  – CDN$4.25).

Warrants

A summary of the changes in the number of the Company’s share purchase warrants is as follows:

	Number of Warrants (in ‘000’s)			Weighted Average Exercise Price (CDN$)
Balance, September 30, 2015		3,555			4.05
Exercised		(407	)		3.62
Expired		(1,282	)		3.75
Balance, December 31, 2016		1,867			4.35
Exercised		(1,687	)		4.32
Expired		(180	)		4.49
Balance, December 31, 2017		-		-

10. RELATED PARTY TRANSACTIONS

The Company`s 50%-owned joint venture Minera Exar entered in the following transactions with companies controlled by the family of the Company’s director and the President of Minera Exar S.A.:

- Los Boros Option Agreement entered into with Grupo Minero Los Boros(Note 5);

- Construction services contract for Cauchari-Olaroz project with Magna Construcciones S.R.L. for $2,411 (the Company’s portion is $1,206).

In 2017 Minera Exar paid director’s fee of $75 to its President, who is also the director of the Company.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

10. RELATED PARTY TRANSACTIONS (continued)

Compensation of Key Management

Up to August 14, 2017, the Company paid its non-executive directors a base annual fee of $35 per year and an additional $5 per year to a Committee Chair, $10 to the Company’s Audit Committee Chair, and $25 to the Company’s Board Chair.  In addition, the Company paid $1 per meeting in cash for Board meetings in excess of six meetings per year.  

Effective August 14, 2017, the Company revised the remuneration of its non-executive directors to a base annual fee of $80 per year and an additional $18 per year to the Company’s Audit Committee Chair, $13 to the Company’s other Committee Chairs, and $40 to the Company’s Board Chair. In addition, the Company will pay $1 per meeting in cash for Board meetings in excess of six meeting per year. The fees will be settled through a combination of cash and the issuance of DSUs with each board member obligated to receive a minimum of 50% and a maximum of 100% of all such compensation in DSUs.  

The remuneration of directors and members of the executive management team included:

	For the year ended December 31,		For the fifteen months ended December 31,
	2017 $		2016 $
Stock-based compensation		2,507		895
Bonuses - cash		1,425	-
Bonuses - stock-based		6,000		1,499
Salaries, benefits and directors fees included in general    and administrative expenses		1,707		1,901
Salaries and benefits included in exploration    expenditures		368		396
Salaries and benefits capitalized to Investment in the Joint Venture		127	-
		12,134		4,691

	As at December 31, 2017		As at December 31, 2016
	$		$
Total due to directors and executive team		265		411

There were no contractual or other commitments from the related party transactions.  The amounts due to related parties are unsecured, non-interest bearing and have no specific terms for repayment.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

11. GENERAL AND ADMINISTRATIVE EXPENSES

The following table summarizes the Company’s general and administrative expenses during the year ended December  31, 2017 and fifteen months ended December 31, 2016:  

	For the year ended December 31,		For the fifteen months ended December 31,
	2017 $		2016 $
Investor relations		63		253
Marketing		565		875
Office and administration		743		741
Professional fees		926		886
Regulatory and filing fees		403		112
Salaries, benefits and directors fees		3,746		2,619
Travel and conferences		799		493
Transaction costs		-		431
Depreciation		51		38
		7,296		6,448

12. COMMITMENTS AND CONTINGENCIES

As at December 31, 2017, the Company had the following commitments that have not been disclosed elsewhere in these consolidated financial statements:

	Not later than 1 year $		Later than 1 year and not later than 5 years $		Later than 5 years $	Total $
Rent of office spaces		276		310	-		586

13. EXPLORATION EXPENDITURES

The following tables summarize the Company’s exploration expenditures during the year ended December 31, 2017 and fifteen months ended December 31, 2016:

	For the year ended December 31, 2017
	Lithium Nevada $		Cauchari-Olaroz¹ $		Total $
Drilling		1,195		-		1,195
Engineering		14		-		14
Environmental		279		-		279
Geological and consulting		1,871		-		1,871
Field supplies, other services, and taxes		397		471		868
Lithium demo plant equipment depreciation		112		-		112
		3,868		471		4,339

¹Expenditures related to the Cauchari-Olaroz project incurred directly by the Company. Starting from July 1, 2017, construction costs related to the Cauchari-Olaroz project are capitalized into Investment in Joint Venture.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

13. EXPLORATION EXPENDITURES (continued)

	For the fifteen months ended December 31, 2016
	Lithium Nevada $		Cauchari-Olaroz¹ $		Total $
Engineering		169		82		251
Environmental		83	-			83
Geological and consulting		1,800		454		2,254
Field supplies, other services, and taxes		280		440		720
Lithium demo plant equipment depreciation		140	-			140
		2,472		976		3,448

¹Exploration expenditures prior to the formation of the Joint Venture

14. SEGMENTED INFORMATION

The Company operates in three operating segments and four geographical segments.  Organoclay project is in the production stage, Lithium Nevada is in the exploration stage and Cauchari-Olaroz project is in the development stage. The Company’s reportable segments are summarized in the following tables:

	Organoclay $			Lithium Nevada $			Cauchari-Olaroz $		Corporate $			Total $
As at December 31, 2017
Property, plant and equipment		17,011			1,018		-			41			18,070
Exploration and evaluation assets	-				2,104		-		-				2,104
Total assets		19,745			3,642			19,637		70,467			113,491
Total liabilities		(1,323	)		(896	)	-			(2,505	)		(4,724	)
For the year ended December 31, 2017
Property, plant and equipment expenditures		891			143		-			27			1,061
Sales		4,290		-			-		-				4,290
Inventory write-down		774		-			-		-				774
Net loss		3,043			5,183			4,850		20,174			33,250
Exploration expenditures	-				3,868			471	-				4,339
Depreciation		776			157		-			6			939
Organoclay research and development		423		-			-		-				423

	Organoclay $			Lithium Nevada $			Cauchari- Olaroz $		Corporate $			Total $
As at December 31, 2016
Property, plant and equipment		17,450			1,033		-			19			18,502
Exploration and evaluation assets	-				1,447		-		-				1,447
Total assets		18,585			3,056			13,136		10,524			45,301
Total liabilities		(1,513	)		(291	)	-			(1,074	)		(2,878	)
For the fifteen months ended December 31, 2016
Property, plant and equipment expenditures		681			14			2		6			703
Sales		1,154		-			-		-				1,154
Inventory write-down		648		-			-		-				648
Net loss		2,871			3,335			3,987		17,531			27,724
Exploration expenditures	-				2,472			976	-				3,448
Depreciation		720			168		-			6			894
Organoclay research and development		536		-			-		-				536

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

14. SEGMENTED INFORMATION (continued)

The Company’s non-current assets and revenues are segmented geographically as follows:

	Canada $		United States $		Germany $		Argentina $		Total $
Non-current assets (1)
As at December 31, 2017		41		19,377		756		19,637		39,811
As at December 31, 2016		19		19,062		868		13,136		33,085
Revenue
For the year ended December 31, 2017	-			4,290	-		-			4,290
For the fifteen months ended December 31, 2016	-			1,154	-		-			1,154

¹Non-current assets attributed to geographical locations exclude deferred income tax assets and financial and other assets.

15. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

Supplementary disclosure of the Company’s non-cash transactions is provided in the table below:

	For the year ended December 31,		For the fifteen months ended December 31,
	2017 $		2016 $
Accounts payable related to property, plant and equipment		28		50
Assets acquired under finance leases		29	-
Accounts payable related to inventories		197		197
Accounts payable related to financings		1,611		175
Deferred financings costs		1,361	-
Accounts payable for salaries settled with DSUs and RSs		290	-
RSs and DSUs granted in lieu of deferred salaries and directors’ fees		81		80
Interest/finance charges paid	52			77
Income taxes paid	-		-

16. INCOME TAXES

A reconciliation of income taxes at Canadian statutory rates with reported taxes is as follows:

	For the year ended December 31			For the fifteen months ended December 31,
	2017 $			2016 $
Loss for the period		(33,250	)		(27,724	)
Expected income tax recovery		(8,645	)		(7,208	)
Items not deductible for income tax purposes		3,612			1,010
Loss of sale of 50% interest in Minera Exar	-				3,278
Effect of change in deferred income tax rate		3,964		-
Effect of lower (higher) tax rate in foreign jurisdiction		(25	)		(647	)
Change in unrecognized deferred tax assets and other		1,094			3,567
Deferred income tax (expense)/recovery	-			-

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

16. INCOME TAXES (continued)

The significant components of the Company's unrecognized deferred tax assets are as follows:

	December 31, 2017 $		December 31, 2016 $
Tax loss carryforwards		14,359		12,634
Exploration and evaluation assets		124		1,350
Financing costs		573		424
Capital assets		238		607
Other		564		94
Unrecognized deferred tax assets		15,858		15,108

The Company has Canadian non-capital loss carryforwards of CDN$33,500 (2016 - CDN$24,200) and in the US of approximately $34,500 (2016 - $22,700) expiring between 2028 – 2037 which are available to reduce taxable income in Canada and the US respectively.  

17. FINANCIAL INSTRUMENTS

Financial instruments recorded at fair value on the consolidated statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.  The fair value hierarchy has the following levels:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for assets or liabilities, either directly or indirectly; and

Level 3 – Inputs for assets and liabilities that are not based on observable market data.

The fair value hierarchy requires the use of observable market inputs whenever such inputs exist.  A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value.  The Company did not have any financial instruments measured at fair value on the statement of financial position.

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

17. FINANCIAL INSTRUMENTS (continued)

The Company may be exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives. The Company manages risks to minimize potential losses. The main objective of the Company’s risk management process is to ensure that the risks are properly identified and that the capital base is adequate in relation to those risks.  The principal risks to which the Company is exposed are described below.

Credit Risk

Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations.  Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, restricted cash, receivables and loans to the Joint Venture.  The Company’s maximum exposure to credit risk for cash, cash equivalents, restricted cash and receivables is the amount disclosed in the consolidated statements of financial position.  The Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions and invests only in short-term obligations that are guaranteed by the Canadian government or by Canadian and US chartered banks.

Included in the receivables, prepaids and deposits are credit sales receivables of $399. Management’s assessment of recoverability involves judgments regarding classification on the consolidated statements of financial position and the probable outcomes of claimed deductions and/or disputes.  The provisions and classifications made to date may be subject to change.

The Company’s receivables, prepaids and deposits include a $105 bank deposit for the Company’s secured credit cards and other miscellaneous receivables that are subject to normal industry credit risk.

Management believes that the credit risk concentration with respect to financial instruments included in cash, cash equivalents and receivables is minimal.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.  The Company’s approach to managing liquidity is to evaluate current and expected liquidity requirements under both normal and stressed conditions to ensure that it maintains sufficient reserves of cash and cash equivalents to meet its liquidity requirements in the short and long term.  As the industry in which the Company operates is very capital intensive, the majority of the Company’s spending is related to its capital programs.  The Company prepares annual budgets, which are regularly monitored and updated as considered necessary.  

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

17. FINANCIAL INSTRUMENTS (continued)

As at December 31, 2017, the Company had a cash and cash equivalents balance of $55,394 (December 31, 2016 - $8,056) to settle current liabilities of $3,724 (December 31, 2016 - $1,806).  

The following table summarizes the maturities of the Company’s financial liabilities on undiscounted basis:

			Years ending December 31,
	2018		2019		2020 and later		Total
	$		$		$		$
Accounts payable and accrued liabilities		3,546	-		-			3,546
Long-term borrowing¹		172		172		618		962
Obligation under finance leases¹		52		49	-			101
Total		3,770		221		618		4,609

^¹Long-term borrowing and obligation under capital leases include principal and interest/finance charges.

Market Risk

Market risk incorporates a range of risks.  Movement in risk factors, such as market price risk and currency risk, affect the fair values of financial assets and liabilities.  The Company is exposed to these risks as the ability of the Company to develop or market its property and the future profitability of the Company are related to the market price of certain minerals.

Foreign Currency Risk

The Company’s operations in foreign countries are subject of currency fluctuations and such fluctuations may affect the Company’s financial results. The Company reports its financial results in United States dollars and incurs expenditures in Canadian dollars (“CDN$”) and US dollars (“US$”) with the majority of the expenditures being incurred in US$ by the Company’s subsidiaries. As at December 31, 2017, $49,496 of the Company’s $55,394 in cash and cash equivalents was held in United States Dollars.

18. CAPITAL DISCLOSURE

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration and development of its mineral properties and to maintain a flexible capital structure.  During the year ended December 31, 2017, the Company completed the closing of financing transactions with Ganfeng and Bangchak (Note 9). The capital structure of the Company consists of long-term borrowing, project debt facilities and equity attributable to common shareholders, comprising issued capital, contributed surplus, and deficit.  The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets.

In order to carry out the planned exploration and development of its projects and pay for administrative costs, the Company will spend its existing working capital, draw on its project debt facilities or raise additional amounts as needed and if available.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.  There were no changes in the Company’s approach to capital management during the year ended December 31, 2017.  

LITHIUM AMERICAS CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2017 AND THE FIFTEEN MONTHS ENDED DECEMBER 31, 2016

(Expressed in thousands of US dollars, except for per share amounts; shares in thousands)

19. SUBSEQUENT EVENTS

On January 18, 2018 the Company received approval for the listing of its common shares on the NYSE, which began trading on the NYSE under the symbol “LAC” on January 25, 2018.

On February 7, 2018 the Company filed a final short form base shelf prospectus in each province of Canada, other than the Province of Quebec, to qualify the distribution, from time to time over a 25-month period of up to US$500 million of the Company’s debt and equity securities. The Company also filed a corresponding shelf registration statement with the SEC on Form F-10 under the Multijurisdictional Disclosure System.

EX-99.3

Exhibit 99.3

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

BACKGROUND

This Management’s Discussion and Analysis (“MD&A”) of Lithium Americas Corp. (“Lithium Americas”, the “Company”, or “LAC”), prepared as of March 28, 2018, should be read in conjunction with December 31, 2017 audited consolidated financial statements and notes thereto of Lithium Americas Corp. (“Lithium Americas”, the “Company”, or “LAC”).  These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All amounts are expressed in United States dollars, unless otherwise stated.

OUR MISSION AND OUR BUSINESS

Lithium Americas is a Canadian-based resource company focused on the advancement of two significant lithium projects: the Cauchari-Olaroz project, located in Jujuy Province of Argentina, and the Lithium Nevada project (formerly the Kings Valley project), located in north-western Nevada, USA. The Company is also a manufacturer of organoclay products from its Fernley, Nevada plant.  

Our mission is to provide the enabling minerals for better energy solutions through our Lithium business. Lithium-ion technology for energy storage is at the forefront of an environmental shift towards clean energy, and the Company intends, through its Cauchari-Olaroz and Lithium Nevada projects, to supply the critical element for this energy sector transformation.

On March 28, 2016, the Company entered into an agreement with SQM POTASIO S.A., a subsidiary of Sociedad Quimica y Minera de Chile S.A. (“SQM”) to form a 50/50 joint venture (the “Joint Venture”) to develop the Cauchari-Olaroz project.  The Cauchari-Olaroz project is a lithium brine project.  

The Lithium Nevada project is 100% owned by the Company and is a clay-based lithium project. It has been the subject of extensive exploration and processing development work.  The Company has recently expanded its technical and project development team, with a vision of building a world-class lithium products operation. Current efforts are focused on the development of a pre-feasibility study expected to be filed at the end of the second quarter of 2018 which includes updating and finalizing a geological model for a prospective mine operation using geological assay data collected in 2017, development of novel process technologies and associated flow sheets, designing the mine, plant and infrastructure facilities, and advancing relevant permitting processes.

In addition, the Company’s wholly-owned subsidiary RheoMinerals Inc. (“RheoMinerals”) operates an organoclay plant located in Fernley, Nevada, USA and manufactures specialty organoclay products (“RheoMinerals products”), derived from clays.  RheoMinerals products are used by the oil and gas industry as specialty viscosifier additives for drilling fluids and in other sectors.  

The Company’s head office is located at Suite 1150-355 Burrard Street, Vancouver, BC, Canada, V6C 2G8.  The Company trades in Canada on the Toronto Stock Exchange and in the United States on the New York Stock Exchange under the symbol "LAC". The Company operates in the United States through its wholly owned subsidiaries, Lithium Nevada Corp. and RheoMinerals Inc. and in Argentina through a Joint Venture company Minera Exar S.A. (“Minera Exar”).  Additional information relating to the Company is available on SEDAR at www.sedar.com.

1

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

2017 HIGHLIGHTS

Project development and operations

Cauchari-Olaroz:

• US$48.6 million has been advanced to Minera Exar in 2017 by the joint venture partners (including US$24.3 million by the Company) in the form of loans and equity contributions to fund exploration, construction and development.

• Development activities continue with the advancement of detailed engineering, camp construction, design and supplies purchases. Engineering for the infrastructure is close to 50% completed and scheduled to be completed in the first half of 2018, followed by plant design later this year. Evaporation pond construction has begun, and the filling of the ponds is planned to begin in the second half of the year. Earth works, production well drilling and hydrological testing are underway.

• Minera Exar’s board has recently reviewed the progress of the Cauchari-Olaroz Project development. As a result of additional work required on wellfield optimization and an updated pond construction/filling schedule, it has updated the targeted development timeline, with first production expected to commence in 2020.

• In May 2017, a National Instrument 43-101 (“NI 43-101”) technical report that summarizes the Stage 1 DFS (as defined further) was filed on SEDAR (http://www.sedar.com) and an updated technical report was filed on January 17, 2018. The Company’s share of the expected capital expenditures for the construction of Stage 1 of the Cauchari-Olaroz project is approximately US$212.5 million before value-added taxes (“VAT”) taxes and working capital.

Lithium Nevada:

• Assembled an experienced technical team with backgrounds in permitting, lithium processing, exploration, mining and down-stream battery technology.

• Successfully completed the 2017 exploration program on time and budget, including drilling, seismic work and geological mapping.

• Advancing a scalable process to extract lithium products from lithium-bearing claystone.

• Engaged the Advisian WorleyParsons Group (“WorleyParsons”) to complete a NI 43-101 Preliminary Feasibility Study (PFS) by the end of the second quarter of 2018.

• Approved budget of US$10.5 million through to Q3 2018.

• Considering potential partnership and financing scenarios that will advance the Lithium Nevada project.

RheoMinerals:

• RheoMinerals has experienced a growth in sales to oilfield service companies since the start of commercial operations at Fernley plant in Nevada in April 2016. The sales for the year ended December 31, 2017 reached US$4.3 million (2016 period - US$1.2 million).

• RheoMinerals continues the development of new environmental and other products.

• The Company received US$0.5 million progress and expenses reimbursements payments under the “Technical Assistance and Royalty Agreement” with Delmon Co Ltd. Construction of a plant by Delmon in Saudi Arabia as contemplated under the agreement is advancing and expected to be completed in 2018. The Company is entitled to a net profit and gross profit royalties from the future production of the plant.  

2

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Finance

• In February 2018, the Company filed a final short form base shelf prospectus in each province of Canada, other than the Province of Quebec, to qualify the distribution, from time to time over a 25-month period, of up to US$500 million of the Company’s debt and equity securities. The Company also filed a corresponding shelf registration statement with the SEC on Form F-10 under the Multijurisdictional Disclosure System. While the Company has no immediate plans to raise capital, the shelf prospectus provides financial flexibility and the ability to efficiently access capital markets as the Company pursues future growth opportunities in Argentina, Nevada and elsewhere.

• As at December 31, 2017, the Company had US$55.4 million in cash and cash equivalents.  As a result of the closing of the Ganfeng Lithium and Bangchak investment agreements, the Company has US$205 million in undrawn debt facilities to finance its share of capital expenditures in the Minera Exar Joint Venture.

• In July 2017, the Company closed the investment agreement (“Bangchak investment agreement”) with BCP Innovation Pte Ltd., a wholly-owned subsidiary of Bangchak Corporation Public Company Limited (“Bangchak”). Pursuant to the Bangchak investment agreement, Bangchak has agreed to provide Lithium Americas with an aggregate of approximately US$113 million in equity and debt financing primarily to fund a portion of the Company’s share of construction costs for the Cauchari-Olaroz lithium project.  The parties also executed an investor rights agreement pursuant to which a nominee of Bangchak is entitled to be appointed to the Board of Directors.

• On June 7, 2017, the Company announced the closing of the investment agreement (“Ganfeng Lithium investment agreement”) with GFL International Co., Ltd., a wholly-owned subsidiary of Jiangxi Ganfeng Lithium Co., Ltd. (“Ganfeng Lithium”). Pursuant to the investment agreement, Ganfeng Lithium agreed to provide Lithium Americas with an aggregate of approximately US$172 million in equity and debt financing. The parties also executed an investor rights agreement pursuant to which a nominee of Ganfeng is entitled to be appointed to the Board of Directors.

Corporate

• In January 2018, the Company announced that it had received approval for the listing of its Common Shares on the NYSE. The Common Shares opened for trading on the NYSE on January 25, 2018. In connection with the U.S. listing, the Company effected a consolidation of its outstanding Common Shares on the basis of one new common share for every five outstanding Common Shares, effective November 8, 2017.

• In November 2017, Jean Fraser was appointed to Lithium Americas’ Board of Directors. Ms. Fraser has had a distinguished legal career as a partner and leader at Osler, Hoskin & Harcourt LLP, a pre-eminent Canadian law firm.

• In August 2017, the Company appointed Alexi Zawadzki as the President of North American Operations.  Alexi has over 20 years of experience developing and constructing mining and energy projects across North and South America, in addition to the management of technical teams and business units.

• In July 2017, the Company appointed Chaiwat Kovavisarach, the CEO of Bangchak, to the Board of Directors.

• In June 2017, Gary Cohn, Wang Xiaoshen and Jonathan Evans waere appointed to Lithium Americas’ Board of Directors.  Mr. Cohn was previously employed with Magna International Inc. overseeing mergers and acquisitions.  Mr. Wang is Vice Chairman and Executive Vice President of Jiangxi Ganfeng Lithium Co. Ltd. Mr. Evans has more than 20 years of operations and general management experience and was previously Vice President and GM for the Lithium Division at FMC Corporation.

• In May 2017, Gabriel Rubacha was appointed President of South American Operations. Mr. Rubacha is a director of Lithium Americas and was previously the Commercial Director of Techint Engineering and Construction S.A.

3

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

DESCRIPTION OF BUSINESS

Cauchari-Olaroz Project, Jujuy Province, Argentina

The Joint Venture is governed by a Shareholders Agreement which provides for (i) equal representation by the Company and SQM on its Shareholders’ Committee, (ii) unanimous approval by the Company and SQM on budgets and timing of expenditures, (iii) the right to purchase a 50% share of the production and (iv) buyout and termination provisions in the event that SQM chooses not to proceed with the project.

Project Development Status

• In March 2017, the parties completed a mine plan and feasibility study on the Cauchari-Olaroz Project for a mining operation producing 25,000 TPA of lithium carbonate over a 40 year mine life.

• In 2017, the Company and SQM assembled a team to lead the project development with SQM providing specialists for engineering and construction of the project. The team has numerous years of experience and a proven track record of developing similar type lithium brine deposits.

• In 2017, Minera Exar initiated detailed engineering work with engineering for the infrastructure close to 50% completed and will commence the plant design later this year.

• Minera Exar has also started construction activities, with earth works, roads and platforms for the wellfields well underway. There are currently more than 400 people working in Argentina, including direct employees and contractors. A camp expansion that will accommodate approximately 460 personnel during the construction phase of the project is well-advanced, with the first half already commissioned, and the remaining half scheduled to be commissioned in early April 2018.

• Pond layout and design is also complete. A contractor is mobilized at site and pond construction activities started in early February 2018, which should allow Exar to start filling ponds commencing in the second half of 2018.

• Early procurement contracts have been signed and bids were received for the critical items, in accordance with the project schedule in order to be able to have vendor data to progress engineering. Engineering for the gas pipeline is underway and should be completed during second quarter 2018. Proposals for engineering, procurement and construction of gas pipelines and solar generation facilities were requested and are expected to be received in the first half of 2018.

• Minera Exar’s board has recently reviewed the progress of the Cauchari-Olaroz Project development. As a result of additional work required on wellfield optimization and an updated pond construction/filling schedule, it has updated the targeted development timeline, with first production expected to commence in 2020. Production wells are under construction, in accordance with this revised timeline. Further updates to the development plan may occur from time to time as work progresses.

Permitting

Minera Exar has completed numerous environmental studies to support the establishment of Cauchari-Olaroz’s environmental baseline. Environmental evaluations have been performed for each stage of the project: construction, operation and closure. An Environmental Impacts Report for the exploitation phase was originally presented in connection with the mine plan under the initial reserve estimate and mine plan LAC completed on the Cauchari-Olaroz in 2012 (“Initial Feasibility Study”), and was later modified to accommodate the current mine plan.

The update to the Environmental Impacts Report for Exploitation for the Cauchari-Olaroz Project based on a 25,000 TPA rate of production and in the manner contemplated in the Stage 1 DFS (as defined further), was approved by the relevant provincial regulatory authorities in the latter half of 2017. Minera Exar has also received approval for the construction of the Cauchari-Olaroz Project from the agency in Jujuy tasked with assessing the impact and benefits to the province of any proposed lithium project.

4

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

The surface rights of the area subject to exploitation are owned by local aboriginal communities. Minera Exar signed contracts with each aboriginal community to have the right to explore the property and for surface use, water use, transit, and building ponds and facilities. Most of these contracts also cover development and mining operations by Minera Exar. For those contracts in which development and mining are not specifically addressed, Minera Exar is working with the relevant community to extend the coverage of the contract to those areas. Minera Exar has also agreed to support local communities through a number of infrastructure and education programs.

Workforce

Minera Exar’s office in Jujuy is coordinating recruitment and other human resource initiatives in the regional community. Considering the Company’s commitment to the local communities, numerous local service providers were engaged to provide services to Minera Exar and a training program is in place, providing operations training to people in the local communities. A proactive approach was taken to develop a training program for positions to be filled during construction and operations, which includes manuals, practice activities at site and visits to SQM’s Atacama site.

JEMSE Arrangement

During 2012 Minera Exar granted a conditional right to Jujuy Energia y Mineria Sociedad del Estado (“JEMSE”), a mining investment company owned by the government of Jujuy Province in Argentina, to acquire an 8.5% equity interest in Minera Exar for one US dollar and provide management services as required to develop the project.

Ifthe conditions are met and it exercises its right, JEMSE will be required to provide its pro rata (8.5%) share of the financing requirements for the construction of the Cauchari-Olaroz project. These funds will be loaned to JEMSE by the shareholders of Minera Exar and will be repayable out of one‑third of the dividends to be received by JEMSE over future years from the project.  The distribution of dividends to JEMSE and other shareholders in the project will only commence once all annual commitments related to the project’s debt have been met.

Highlights of the Stage 1 DFS

On March 29, 2017 the Company announced results of a Definitive Feasibility Study (the "Stage 1 DFS") on the first stage of the Cauchari-Olaroz project.

Unless otherwise stated, all figures are quoted in U.S. dollars ("$") and are reported on a 100% equity project basis.

• Average annual production of 25,000 tonnes of battery-grade lithium carbonate over a 40-year project life

• Estimated construction capital cost of $425 million, before working capital and VAT

• Average operating costs of $2,495/t for producing battery-grade lithium carbonate

• Average annual EBITDA of $233 million, after-tax NPV of $803 million (at a 10% discount rate) and after-tax IRR of 28.4% assuming a sale price of $12,000/t of battery-grade lithium carbonate sold

• Creation of at least 260 permanent jobs during the 40 years of operations and employment of at least 800 people during the 2-year construction period

• Government confirmation of all necessary permits to commence construction and operate.

The Joint Venture is pursuing a development plan at the Cauchari-Olaroz project for production capacity of 50,000 tonnes per annum ("tpa") of battery-grade lithium carbonate (“Li₂CO₃”) in two stages, with each stage consisting of 25,000 tpa of Li₂CO₃. The Stage 1 DFS covers the first stage (“Stage 1”) and the plant for Stage 1 has been engineered to integrate production from the second stage (“Stage 2”). No estimated mine plan, financial results or reserve estimate associated with Stage 2 are included in the Stage 1 DFS.

5

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

The results of the Stage 1 DFS are provided below:

Cauchari-Olaroz Stage 1 DFS Results

	Stage 1 DFS
Lithium carbonate price	$12,000/t Li2CO3
Average annual production	25,000 tpa Li2CO3
Expected project life	40 years
Project capital costs	$425 million
Operating costs	$2,495/t Li2CO3
Average annual EBITDA	$233 million
Pre-tax NPV 10% discount	$1,266 million
After-tax NPV 10% discount	$803 million
Pre-tax IRR	34.0%
After-tax IRR	28.4%
Payback period	3 years, 5 months

Detailed technical information on the Cauchari-Olaroz Project can be found in a technical report that was filed with the securities regulatory authorities in each of the provinces of Canada on January 17, 2018, entitled “NI 43-101 Technical Report Updated Feasibility Study Reserve Estimation and Lithium Carbonate Production at Cauchari-Olaroz Salars, Jujuy Province, Argentina” (the “Cauchari TR”). The Cauchari TR has an effective date of March 29, 2017. The Cauchari TR is filed on SEDAR (http://www.sedar.com) and on the Company’s website (http://www.lithiumamericas.com).

Project Financing

In 2017, the Company closed two financings with Ganfeng Lithium and with Bangchak. Between the two financings, Lithium Americas raised approximately $285 million in debt and equity, putting it with a strong financial position to fund its remaining share of Cauchari-Olaroz’ capital costs, alongside its joint venture partner, SQM. See further details on the project financings in section Liquidity and Capital Resources below.

Political and Economic Changes in Argentina

The Argentine economy underwent significant positive changes in late 2015, 2016 and 2017 as a result of measures that the new government has taken to reduce or remove controls and restrictions on capital flows.  Since taking office in December 2015, President Mauricio Macri has moved swiftly to appoint a business-friendly cabinet and implement a series of major fiscal, political and regulatory policy measures.  President Macri lifted foreign exchange controls that had been in place since 2011, and abolished export taxes on many agricultural and industrial goods, including lithium.  Additionally, the Province of Jujuy, where the project is located, is very supportive for the development of the project.  

Argentina enacted comprehensive tax reform (Law No. 27,430 (the Law)), through publication in the Official Gazette on 29 December 2017. The Law is generally effective 1 January 2018. Specifically, the Law introduces amendments to corporate income tax, personal income tax, value added tax (VAT), tax procedural law, criminal tax law, social security contributions, excise tax, tax on fuels, and tax on the transfer of real estate. It also establishes a special regime comprising an optional revaluation of assets for income tax purposes.  The reform, coupled with an agreement with Argentina’s provinces to reduce regional sales taxes, are expected to reduce the Company’s tax burden and improve the efficiency of the taxation system.

6

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Lithium Nevada Project, Nevada, USA

The Company is developing the 100% owned Lithium Nevada project, a clay-based lithium property located in the McDermitt Caldera of Nevada, through its wholly owned subsidiary, Lithium Nevada Corp. (“Lithium Nevada”). Building on years of exploration and testing, a Preliminary Feasibility Study (the “PFS”) compliant with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) on the Lithium Nevada project is expected to be complete in the end of the second quarter of 2018 to demonstrate the economic potential of the project.

The Lithium Nevada project is advancing a chemical processing technology with the objective to produce lithium products from claystone. The flowsheet is designed to use leaching to liberate lithium from the ore, and to apply proven purification technology to produce high-quality lithium products. Leaching is believed to be advantageous when compared to previously considered processes as it avoids energy-intensive roasting, reduces tailings volume, and maximizes the recovery of lithium through commercially-available process technology. Test work is underway at a leading lithium manufacturing facility using a combination of laboratory and existing commercial production equipment. This approach accelerates the testing needed for a robust process design. Ongoing process test work is currently focused on refinement of the following aspects of the flowsheet: the characterization, comminution and beneficiation of ore; optimizing leaching and recovery conditions of lithium from claystone; and purification and production of high-value lithium products.

The Lithium Nevada project’s lithium-bearing claystone resource is near-surface and in some areas the overburden consists of hectorite clay, which has commercial value in other industries. Due to the soft nature of the claystone, conventional open pit mining using truck and shovel methods is contemplated with blasting not considered a requirement for day-to-day operations.

An exploration program was conducted in 2017 at the Lithium Nevada project (the “2017 Exploration Program”) which consisted of drilling and seismic work. The program was concluded on time and budget in mid-December 2017. The purpose of the 2017 Exploration Program was to increase the confidence of the identified resource, potentially expand the size of the resource, and better understand areas that are unconfined by drilling.

The Company resumed drilling the Zone 1 Lens (previously referred to as Stage 1 in the Company’s June, 2016 technical report entitled “Independent Technical Report for the Lithium Nevada Property, Nevada, USA”) in June 2017, drilling an additional 86 HQ (63.5 millimeter) diameter core holes totaling 6,852 meters in length. Evaluation of the historic data concluded that the highest probability of expansion was to the west of the known resource. Thirteen (13) holes were drilled to the northwest of the known resource area totaling 1,039 meters. Twenty-two (22) exploration holes (where no historical drilling has been conducted) totaling 2,052 meters were drilled south and along the eastern margin of the caldera to help understand the extent of the resource. Thirty-nine holes (39) designed to improve resource confidence in the previously identified resource area were drilled, totaling 3,438 meters. Three (3) holes drilled within the known resource for geotechnical work and nine (9) holes were drilled around the Lithium Nevada clay mine to provide clay samples for RheoMinerals test work. The drill holes were not assayed as the material was taken to determine the clay’s physical properties.

In 2017, the Company completed five (5) seismic geophysical lines surveyed in the Zone 1 Lens. The first line surveyed in July was to test the suitability of the technology on the clay deposit. The results were promising, thus, four more lines were commissioned. Of these, three lines laid out to determine the subsurface shape of the caldera to guide drilling exploration. The fourth line was designed to determine the depth to the basement rock from the known resource area to the east where drilling shows the basement is over 200 meters below the surface. Seismic work will be analyzed with the drilling data obtained from the 2017 Exploration Program to better understand the geological structures in areas unconfined by drilling to the east of Zone 1 of the Lithium Nevada project. Additional exploration is anticipated in 2018.

7

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Mineral Resource Statement for Zone 1 (as of May 31, 2016)⁽¹⁾⁽²⁾

Category	Tonnage (000 t)	Avg. Li (ppm)	Avg. Li (%)	Avg. Li2O (%)	LCE (000 tonnes)
Measured	50,753	3,120	0.312	0.67	843
Indicated	164,046	2,850	0.285	0.61	2,489
Measured and Indicated	214,799	2,910	0.291	0.624	3,332
Inferred	124,890	2,940	0.294	0.63	1,954

Notes:

1. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves.

2. Resources presented at a Li% 0.20 [0.431 % Li₂O] cut-off grade which was determined using the following economic assumptions: US$3.36 Li carbonate/lb; 87.2% metallurgical recovery; US$66/tonne ore processed; US$2.75/tonne material moved.

The PFS is expected to be completed by the end of the second quarter of 2018. The Advisian WorleyParsons Group (“WorleyParsons”) has been appointed to lead the PFS and project design. WorleyParsons is a global full-service engineering firm with experience in lithium project design, construction, and preparing NI 43-101 compliant reports. WorleyParsons will focus on project infrastructure, mineral processing and metallurgical testing, capital and operating costs and project economics. Mining Plus Pty Ltd., a sub-contractor to WorleyParsons, will focus on potential mineral reserve estimates and mining methods. Mining Plus is a fully integrated global mining consultancy that has experience in open pit mining, including the development and operation of large-scale lithium mining projects in Australia.

In 2017, the Company expanded its technical team to include lithium processing specialists and geologists to 1) define and optimize processing technologies to produce battery-grade lithium products, and 2) expand the resource size with a focused exploration program with the objective of developing a new PFS.

Lithium Americas’ Board of Directors have approved a budget of US$10.5 million to fund the Lithium Nevada project through to Q3 2018. In addition, the Company is considering future strategic partnership/financing alternatives to collaborate and develop the Lithium Nevada project.

Below summarized is current status of the project development:

Metallurgical Process Development

• Lithium Nevada has expanded the Nevada Project Team with experienced chemical engineers, geologists and permitting specialists.

• Lithium Nevada is optimizing its lithium processing technology to ensure the most efficient manufacturing of specialty lithium products. The flowsheet is designed to: (1) use leaching to liberate lithium from the ore, and (2) apply proven purification technology to produce high-quality lithium products.

• Bench test work has been successfully completed at a leading lithium manufacturing facility. Optimization and pilot testing work will continue. This approach was chosen to accelerate the testing needed for a robust process design and provides options for future strategic partnerships.

• Ongoing process test work is currently focused on refinement of the following aspects of the flowsheet:

• comminution and beneficiation of the ore;

• optimizing leaching and recovery conditions of lithium products from claystone;

• purification and production of high-value lithium products; and,

• optimization of tailings composition for low-risk storage.

• The process assembles and optimizes commercially-proven techniques in metallurgy in a novel configuration.

8

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Exploration

• Further exploration drilling is planned for 2018.  Key activities include expansion drilling at the proposed pit area (to be defined in the upcoming PFS), step-out drilling and exploration of new target areas.

Permitting

• To date, Lithium Nevada has performed more than 40 environmental baseline studies within the project area.  Additional baseline environmental surveys have commenced in early 2018 with the major mine plan permit application expected to be initiated in the second half of 2018.

• A Plan of Operations is under development and will be completed later in 2018.  The Plan of Operations is the first step towards obtaining a federal operations permit.

• The permitting team has been expanded to include a senior Nevada-based permitting specialist.

Environmental Sustainability

• Consistent with Lithium Americas’ focus on environmental sustainability, Lithium Nevada and the University of Nevada, Reno (“UNR”) Foundation have founded the Great Basin Sagebrush Restoration Fund (the “Fund”). The Fund’s mission is to improve sagebrush habitat through effective habitat rehabilitation methods. The Fund is administered by the UNR Foundation. Lithium Nevada has provided the seed financing to kick-start the long-term initiative and is entitled to one nominee on the Fund's board of directors. It is anticipated that other industry partners will participate and expand the research program.

Water

• Lithium Nevada has existing fully-certificated water rights within the Quinn River Valley (located 25 km east of the proposed mine site at the Lithium Nevada project) totaling approximately 1,000 acre-feet annually, which is expected to be sufficient for a large-scale lithium mine and processing facility.  The point of diversion and use of the water rights will need to be transferred to the mine through a well-defined administrative process.

• Water is available near the mine. A test well was successfully drilled in late 2017 which indicated sufficient flow rates for process water requirements. Water quality was also deemed to be good.

• An independent groundwater study was completed by Schlumberger Water Services in 2012. An updated study has commenced in 2018 by Piteau and Associates, which includes the drilling of additional groundwater monitoring wells and piezometers and the installation of creek/spring monitoring gauges.

Public Relations

• The Company has developed a stakeholder engagement strategy that includes early and transparent engagement, continuous communication and feedback in the design process, and community benefits.

• As part of this strategy, the Company has assigned a Public Relations specialist to work with nearby communities.

• The Company has provided education funding for three local schools in 2017, and will continue this engagement in 2018.

Anticipated Work Program and Timeline

• Q2 2018 – complete PFS, including updated resource and reserve estimates.

• H2 2018 – initiate major mine plan permitting and continue environmental baseline data collection.

• H2 2018 – continue optimization, testing and design work.

9

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

RheoMineralsBusiness

The organoclay plant, operated by the Company’s wholly-owned subsidiary RheoMinerals, located in Fernley, Nevada, was completed and ready for intended use on April 1, 2016.  Accordingly, sales and costs of sales are recorded in respect of these operations commencing April 1, 2016.  Prior to April 1, 2016, sales of organoclay product of $0.7 million were accounted for as a reduction of the capitalized costs of organoclay property, plant and equipment.  From April 1, 2016 to December 31, 2016 the Company reported $1.2 million in organoclay sales and $4.3 million during the year ended December 31, 2017. Most of RheoMinerals’ sales during the year ended December 31, 2017 were to oil and gas service sector customers.

In fiscal year 2016, RheoMinerals entered into a Technical Assistance and Royalty Agreement (the “Delmon Agreement”) with Delmon Co. Ltd., part of The Delmon Group of Companies (“Delmon”) in Saudi Arabia. Delmon has business interests spanning wide market segments of products and services, and is a leading local supplier of oilfield minerals and chemicals to Saudi Aramco.  Under this agreement, RheoMinerals will collaborate with Delmon in the design and construction of a manufacturing facility (the “Delmon Plant”) for specialty additives used in oil based drilling fluids. The initial product offering will include organophilic bentonite and organophilic lignite products.  RheoMinerals will receive $1.2 million ($0.6 million received) in progress payments upon Delmon achieving certain construction and operational milestones in addition to the reimbursements of expenses and costs of technical personnel.  Under the Delmon Agreement, RheoMinerals will also receive royalties from the future Delmon Plant production, including a 12.5% net profit royalty payable for 7 years from the manufacturing completion date (as defined in the Delmon Agreement) and a 3% gross profit royalty on new products payable for 7 years from the date of sale of any new product.  The new facility is expected to be commissioned in 2018.

Delmon Plant construction update:

• Manufacturing plant commissioning estimated to begin in Q2, 2018.

• Major equipment items including reactors, milling/drying systems and packaging line have been received and positioned in the plant.

• Electrical work has commenced.

• First draft of process control system submitted to electrical/controls contractor. 

• RheoMinerals collaborating with a Middle East leading oil producer to establish product performance certification protocol for organophilic leonardite products and organophilic bentonite products.

10

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

SELECTED FINANCIAL INFORMATION

The following selected financial information is presented in thousands of US dollars, shares in thousands, unless otherwise stated and except per share amounts.

Share Consolidation

As authorized by its shareholders, as part of the NYSE listing process, the Company implemented a consolidation of its outstanding Common Shares effective from November 8, 2017 on the basis of one new common share for every five outstanding Common Shares. The share consolidation affected all issued and outstanding Common Shares, options and warrants. All information relating to basic and diluted earnings per share, issued and outstanding Common Shares, share options, restricted share units, deferred share units and warrants, and per share amounts in this report have been adjusted retrospectively to reflect the share consolidation.

Change in Fiscal Year End

The Company changed its fiscal year end from September 30 to December 31, effective 2016.  As a result, the comparative prior period is the fifteen months period ended December 31, 2016. The Company changed its year end in order to align it with the Joint Venture for reporting and planning purposes as well as to bring its financial reporting timetable in line with the other companies in the industry.

Selected Annual Financial Information

The following table provides a brief summary of the Company’s financial operations for the year ended December 31, 2017 (“FY 2017”), the fifteen months ended December 31, 2016 (“FY 2016”), and for the year ended September 30, 2015 (“FY 2015”).  For more detailed information, refer to the audited consolidated financial statements for the FY 2017, FY 2016, and FY 2015 which can be found on the SEDAR website (www.sedar.com).

	Year ended December 31, 2017			Fifteen months ended December 31, 2016			Year ended September 30, 2015
	$			$			$
Organoclay sales		4,290			1,154		-
Expenses		(28,320	)		(17,612	)		(6,603	)
Net loss		(33,250	)		(27,724	)		(7,555	)
Comprehensive loss		(31,240	)		(28,945	)		(8,121	)
Loss per share - basic and diluted		(0.44	)		(0.50	)		(0.06	)
Cash and cash equivalents		55,394			8,056			5,552
Loans to Joint Venture		11,479			-			-
Investment in Joint Venture		19,637			13,136		-
Total assets		113,491			45,301			68,541
Total long-term liabilities		(1,000	)		(1,072	)		(1,411	)

The comparative December 31, 2016 period in the table is for fifteen months and is not comparable to the year ended December 31, 2017 due to the change in fiscal year end from September 30 to December 31, effective 2016.

The Company started to recognize revenues from organoclay sales on April 1, 2016, upon the organoclay plant achieving intended use status and sales have been increasing in 2017 as operations ramped up. Expenses and net loss have been increasing in the past three years primarily due to increases in exploration expenditures, stock-based compensation and general and administrative expenses as a result of increases in corporate activities and expansion of Lithium Nevada project development activities. Foreign currency differences on translation of Lithium Americas balances from Canadian dollar and Minera Exar operations from Argentinian peso to the US dollar presentation currency resulted in other comprehensive gains in 2017 and losses in the previous 2 years.

11

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Cash and cash equivalents increased in 2017 as a result of closing of equity financings with Ganfeng Lithium and Bangchak.  In 2016 the Company sold 50% of its equity interest in Minera Exar to SQM which resulted in a decrease in total assets. Investment in Joint Venture increased in 2017 as a result of contributions of the Company and SQM to advance construction activities.  Increase in Loans to Joint Venture and in Total assets is analyzed in Quarterly information below.  

Quarterly Information

Selected consolidated financial information is presented as follows:

	2017												2016
	Q4			Q3			Q2			Q1			Q5			Q4			Q3			Q2			Q1
	$			$			$			$			$			$			$			$			$
Total assets		113,491			118,462			86,017			48,517			45,301			50,537			53,845			57,664			57,876
Exploration and evaluation assets		2,104			1,901			1,457			1,457			1,447			1,444			1,010			1,010			31,361
Investment in Joint Venture		19,637			7,981			7,507			11,649			13,136			16,074			17,673			18,163			-
Loans to Joint Venture		11,479			11,255			5,079			5,019			-			-			-			-			-
Property, plant and equipment		18,070			18,078			17,876			18,066			18,502			18,618			18,862			19,164			18,932
Working capital		57,494			73,804			50,923			9,620			8,593			11,260			13,384			13,667			2,532
Organoclay sales		452			1,059			1,612			1,167			534			452			168			-			-
Organoclay sales capitalized during the development stage	-			-			-			-			-			-				156			307			99
Expenses		(5,863	)		(10,098	)		(7,969	)		(4,390	)		(5,308	)		(3,651	)		(3,276	)		(2,742	)		(2,635	)
Net loss for the period		(5,805	)		(12,759	)		(9,726	)		(4,960	)		(5,598	)		(3,723	)		(3,766	)		(11,365	)		(3,272	)
Basic and diluted loss per common share		(0.01	)		(0.03	)		(0.03	)		(0.02	)		(0.01	)		(0.01	)		(0.01	)		(0.03	)		(0.01	)

The Company’s total assets have been increasing through 2017 due to proceeds from financings offset by expenses incurred. The Company received $7,297 in Q1 2017 and $40,163 in Q2 2017 pursuant to an investment agreement with Ganfeng Lithium and $33,539 in Q3 2017 in accordance with the investment agreement with Bangchak.

In Q2 2016 the Company sold 50% of its share in Minera Exar and formed a Joint Venture with SQM which resulted in a decrease in exploration and evaluation assets and recognition of an investment in Joint Venture. The investment in the Joint Venture decreased in 2016 as a result of exploration expenditures at the Cauchari-Olaroz project, which were expensed in the Joint Venture’s income statement. The Company provided $5,000 loan to the Joint Venture in Q1 2017, followed by $6,000 loan in Q3 2017 and an equity contribution of $13,300 in Q4 2017 to finance development activities at Minera Exar. Effective July 1, 2017, the Joint Venture’s Cauchari-Olaroz project entered the development phase.  Accordingly, all costs directly attributable to the project are capitalized from that date.

Working capital increased in Q2, 2016 due to $13,333 receivable from the Joint Venture, which was formed on March 28, 2016. From Q2 2016 the working capital has been decreasing due to the exploration and general and administrative expenditures and in Q1 2017, in Q2 2017 and then in Q3 2017 the working capital increased due to closing of financings with Ganfeng Lithium and Bangchak. The working capital decreased in Q4 2017 as a result of an equity contribution into the Joint Venture of $13,300, exploration expenditures at Lithium Nevada and general and administrative expenditures.

The Company started to recognize revenues from organoclay sales on April 1, 2016, upon the organoclay plant achieving intended use status. The decrease in the Company’s sales in Q4 2017 compared to Q3 2017 was due to a decrease in oil drilling product orders. The Company considers that this decline is due to the timing of oilfield activities.

The increase in the Company’s expenses in Q3 2017 compared to Q2 2017 was primarily due to an increase in exploration expenditures incurred as a result of the increase in activity on the Lithium Nevada project, an increase in salaries, benefits, and directors’ fees expense due to executive bonuses awarded in Q3 2017, and an increase in stock-based compensation expense due to new stock options and restricted share grants in Q3 2017. The increase in the Company’s net loss in Q3 2017 was a result of the increase in expenses and higher foreign exchange loss due to the strengthening of the Canadiandollar against the US dollar during the period. The Company holds most of its cash in US currency.The increase in the Company’s expenses in Q2 2017 compared to Q1 2017 was primarily due to an increase in the Company’s share of loss in

12

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

the Joint Venture due to the increase in activity on the Cauchari-Olaroz project and to an increase in stock-based compensation expense due to new stock options and restricted share grants in Q2 2017. The increase in the Company’s expenses in Q5 2016, compared to Q4 2016 was mostly due to increase in consulting fees, legal expenses, marketing, and wages and salaries due to an increase in corporate activities and increase in the number of employees. In Q2 2016, the Company recorded a loss of $8,979 on the sale of 50% of its equity interest in Minera Exar to SQM mainly due to $15,098 of cumulative exchange differences (“CTA”) in Minera Exar which was reflected in the income statement upon sale.

Results of Operations – Year Ended December 31, 2017 Compared to the Fifteen Months Ended December 31, 2016

The following table summarises the key items that resulted in the increase in net loss for the year ended December 31, 2017 versus the fifteen months ended December 31, 2016:

Net loss, fifteen months ended December 31, 2016 $

	(27,724	)
Increase in organoclay sales	3,136
Increase in cost of sales	(3,482	)
Increase in exploration expenditures	(891	)
Decrease in organoclay research and development	113
Increase in general and administrative expenses	(848	)
Increase in share of loss in Joint Venture	(863	)
Increase in stock-based compensation	(8,219	)
Increase in foreign exchange (loss)/gain	(4,110	)
One-off convertible security accretion in 2016	806
One-off loss on sale of 50% interest in Minera Exar in 2016	9,015
Decrease in other income	(183	)
Net loss, year ended December 31, 2017	(33,250	)

Net loss for the year ended December 31, 2017 was $33,250 compared to $27,724 for the fifteen months ended December 31, 2016. The increase in the loss was mainly attributed to the increase in the stock-based compensation and increase in foreign exchange loss partially offset by a one-off loss on sale of the 50% interest in Minera Exar in 2016. Comprehensive loss for the year ended December 31, 2017 was $31,241 compared to $28,945 for the fifteen months ended December 31, 2016.

Organoclay Sales and Cost of Sales

The organoclay sales revenue in the period ended December 31, 2017 was $4,290 (2016 - $1,154), with related production costs of $4,565 (2016 - $1,497), depreciation expense of $764 (2016 - $476), and inventories write down of $774 (2016 - $648) resulting in gross loss from organoclay sales of $1,813 (2016 - $1,467). Increase in revenue and production costs is driven by significantly increased sales as the operations are ramping up.

Expenses

Exploration phase expenditures (which include drilling, feasibility study, metallurgical process development, permitting, engineering, environmental, geological and other expenses – refer to Note 13 of the Company’s audited financial statements for the year ended December 31, 2017) of $4,339 (2016 – $3,448) include expenditures incurred for the Lithium Nevada project of $3,868 (2016 - $2,472) and $471 (2016 - $976) in expenditures incurred directly by the Company related to the Cauchari-Olaroz project. The increase in the Company’s exploration expenditures from quarter to quarter is mostly due to advancing the Lithium Nevada project and the drilling campaign in the second half of 2017. Included in the Lithium Nevada expenditures is $170 (FY 2016 - $1,086) related to the lithium demonstration plant. Exploration expenditures related to the lithium demonstration plant decreased due to timing of the campaigns.

13

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Organoclay research and development costs are consistent from period to period and include costs of operating the research and development team and lab for new organoclay products development.

Loss from the Joint Venture of $4,850 (2016 - $3,987) represents the Company’s share of the Joint Venture expenses for the Cauchari-Olaroz project. Starting July 1, 2017 the Cauchari-Olaroz project entered into a construction phase with expenses related to the construction being capitalized.

Stock-based compensation of $11,412 (2016 - $3,193) is a non-cash expense and consists of the $4,423 estimated fair value of stock options vested during the period and the $6,989 fair market value of restricted shares. During the period ended December 31, 2017, the Company granted 3,085 stock options and 1,589 restricted shares to its directors, executive officers, and employees. The increase in this category was due to new stock options grants and restricted shares awards to the Company’s employees and officers and increase in the share price of the Company.

Included in General and Administrative expenses of $7,296 (2016 - $6,448) are:

- Office expenses of $743 (2016 - $741) includes Vancouver, Reno, and Toronto office rent, insurance, IT, depreciation expense, telephone, and other related expenses and RheoMinerals general office expenses.  

- Professional fees of $926 (2016 - $886) consist of legal fees of $436 (2016 – $411), consulting fees of $256 (2016 - $294), public relations fees of $95 (2016 - $69), and accounting fees of $139 (2016 - $112).

- Salaries and benefits of $3,746 (2016 - $2,619) include salaries, benefits, and bonuses for the Company’s employees and directors’ fees. The increase in salaries and benefits is due to hiring new employees in 2017 and awarding bonuses to the Company’s two senior executives upon completion of the Bangchak and Ganfeng Lithium financings in Q3 2017.

- Travel and conferences expenses were $799 (2016 - $493). The increase is due to an increase in corporate activities.

- Changes in all other general and administrative expenses categories are disclosed in Note 11 of the Company’s audited financial statements for the year ended December 31, 2017 and are due to the changes in corporate activities and the timing and changes in the investor relations and marketing activities.

Other Items

Foreign exchange loss in 2017 was $3,759 compared to a gain of $351 in 2016. The loss was caused by the effect of depreciation of US$ against CDN$ in 2017 on the cash proceeds from Bangchak and Ganfeng Lithium equity financings, which were held in USD in Lithium Americas Corporation which has CDN$ as a functional currency.

Other income in 2017 was $642 compared to $825 in 2016. Included in other income in 2017 are $522 progress and expenses reimbursement payments received under the Delmon Agreement offset by $112 expenses incurred related to the Delmon agreement, $400 interest income on cash, $240 interest income on the loan to the Joint Venture, offset by $400 of equipment write off at RheoMinerals. Included in other income during FY2016 are $300 proceeds received under the Delmon Agreement, $544 write off of the previously recorded provision for settlement of liability with the Company’s former officer, net of related legal and administrative costs.

During FY 2016, the Company realized a loss of $9,015 on the sale of 50% of its interest in Minera Exar to SQM on the formation of the Joint Venture mainly due to $15,098 of cumulative exchange differences (“CTA”) in Minera Exar which were recycled to the statement of loss.

During FY 2016, the Company recorded $806 convertible security accretion cost.

14

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Results of Operations – Three Months Ended December 31, 2017 Compared to the Three Months Ended December 31, 2016

The following table summarises the key items that resulted in the increase in net loss for the three months ended December 31, 2017 versus the three months ended December 31, 2016:

Net loss, quarter ended December 31, 2016	$
		(5,598	)
Decrease in organoclay sales		(82	)
Decrease in cost of sales		286
Increase in exploration expenditures		(1,158	)
Decrease in organoclay research and development		8
Increase in general and administrative expenses		(448	)
Decrease in share of loss in Joint Venture		2,217
Increase in stock-based compensation		(1,176	)
Increase in foreign exchange (loss)/gain		128
Increase in other income		17
Net loss, quarter ended December 31, 2017		(5,805	)

Net loss for the three months ended December 31, 2017 was $5,805 compared to $5,598 for the three months ended December 31, 2016. The increase in the loss was mainly attributed to the higher exploration expenses at Lithium Nevada and higher stock-based compensation partially offset by the lower gross loss from organoclay sales and lower loss from the Joint Venture.

Organoclay Sales and Cost of Sales

The organoclay sales revenue in Q4 2017 were $452 (2016 - $534), with related production costs of $601 (2016 - $804), depreciation expense of $59 (2016 - $285), and inventory writedown of $442 (2016 - $299) resulting in gross loss from organoclay sales of $650 (2016 - $854).

Expenses

Exploration expenditures of $1,716 (2016 – $559) include expenditures incurred for the Lithium Nevada project. The increase in the Company’s exploration expenditures from quarter to quarter is mostly due to advancing the Lithium Nevada project and the drilling campaign in the second half of 2017.

Organoclay research and development costs are consistent from period to period and include costs of operating the research and development team and lab for new organoclay products development.

Loss from the Joint Venture of $398 (2016 – $2,615) represents the Company’s share of the Joint Venture losses for the Cauchari-Olaroz project. In July 2017, the Joint Venture’s Cauchari Olaroz project entered the development phase. Effective July 1, 2017, all costs directly attributable to the project are being capitalized. The Company’s share of the Joint Venture losses decreased in Q4 2017 compared to 2016 as the majority of costs were capitalized as project development costs.

Stock-based compensation of $1,683 (2016 - $507) is a non-cash expense and consists of the $1,407 estimated fair value of stock options vested during the period and the $276 fair market value of restricted shares. In Q4 2017 the Company granted 90 stock options and 20 restricted shares to its directors, executive officers, and employees. The increase in this category was due to new stock options grants and restricted shares awards to the Company’s employees and officers and increase in the share price of the Company.

15

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Included in General and Administrative expenses of $1,961 (2016 - $1,513) are:

- Office expenses of $245 (2016 - $136) includes Vancouver, Reno, and Toronto office rent, insurance, IT, depreciation expense, telephone, and other related expenses and RheoMinerals general office expenses.  

- Professional fees of $355 (2016 - $302) consist of legal fees of $180 (2016 – $112), consulting fees of $97 (2016 - $114), public relations fees of $16 (2016 - $40), and accounting fees of $62 (2016 - $36).

- Salaries and benefits of $653 (2016 - $575) include salaries, benefits, and bonuses for the Company’s employees and directors’ fees. The increase in salaries and benefits is due to hiring new employees in 2017.

- Regulatory and filing fees were $294 (2016 - $3). The increase is due to the costs of registration of the Company on the NYSE.

Other items.

The Company recognized in Q4 2017 a foreign exchange gain of $397 (2016 – $269). The increase in the Company’s foreign exchange gain was due to the strengthening of the US dollar against the Canadian dollar and higher US$ denominated cash balance in the Q4 2017 period. The Company holds most of its cash in US currency.

Other income in Q4 2017 was $313 compared to $296 in 2016. Included in other income in Q4 2017 are $169 interest income on cash and $112 interest income on the loan to the Joint Venture. Included in other income in Q4 2016 are proceeds from transactions with Delmon.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow Highlights	Period ended December 31,
	2017 $			2016 $
Cash used in operating activities		(12,914	)		(11,312	)
Cash (used in)/provided by investing activities		(25,551	)		10,530
Cash provided by financing activities		85,425			3,585
Effect of foreign exchange on cash		378			(299	)
Change in cash and cash equivalents		47,338			2,504
Cash and cash equivalents - beginning of period		8,056			5,552
Cash and cash equivalents - end of period		55,394			8,056

As at December 31, 2017, the Company had cash and cash equivalents of $55,394 and working capital of $57,494 compared to cash and cash equivalents of $8,056 and working capital of $8,593 on December 31, 2016.

On January 27, 2017, pursuant to the Ganfeng Lithium investment agreement, the Company issued to Ganfeng 2,250 Common Shares at a price of CDN$4.25 per share, for an aggregate cash subscription of CDN$9,563 ($7,297). On June 7, 2017, the Company issued to Ganfeng an additional 12,750 Common Shares at a price of CDN$4.25 per share, for an aggregate cash subscription of CDN$54,188 ($40,163).

On July 14, 2017, pursuant to the Bangchak investment agreement, the Company issued to Bangchak 10,000 Common Shares at a price of CDN$4.25 per common share, for an aggregate cash subscription of CDN$42,500 ($33,539).

Financing costs of $1,755, related to the equity portion of the Ganfeng and Bangchak financings, were recorded as share issuance costs. Financing costs of $1,888, related to the debt portion of the Ganfeng and Bangchak financings, are deferred and will be amortized over the terms of the loans. $1,361 of these costs are included in accounts payable and accrued liabilities on December 31, 2017.

In January 2016, the Company received $3,500 from a non-brokered private placement of subscription receipts and incurred related costs of $42.

16

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

In April 2016, the Company received $14,754, net of $246 transaction costs from the sale of 50% equity interest in Minera Exar.

The Company will require additional working capital to continue development of its organoclay business and for further development of its lithium projects.  The timing and the amount of RheoMinerals and Lithium Nevada expenditures are within the control of the Company due to its direct and sole ownership.  Pursuant to the agreements governing the Joint Venture on the Cauchari-Olaroz project, decisions regarding capital and operating budgets for the project require agreement between LAC and its Joint Venture partner, SQM.  

The Company is in the development stage and as such, does not generate significant revenues from operations. The Company’s capital resources are determined by the status of the Company’s projects, and its ability to compete for investor support of its projects.  The Company’s access to financing is always uncertain. There can be no assurance that the Company will be successful in having continued access to significant equity and/or debt funding. Except as disclosed, the Company does not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, its liquidity and capital resources either materially increasing or decreasing at present or in the foreseeable future. The Company does not now nor does it expect in the future to engage in currency hedging to offset any risk of currency fluctuations.

Financings

Ganfeng and Bangchak Investment Agreements

During the year ended December 31, 2017, the Company completed the closing of the investment agreement (the “Ganfeng Investment Agreement”) with GFL International Co., Ltd. (“Ganfeng”) and the investment agreement (the “Bangchak Investment Agreement”) with The Bangchak Petroleum Public Company Limited (“Bangchak”) through its wholly-owned subsidiary, BCP Innovation Pte Ltd (“BCPI”) for funding to advance the construction of the Cauchari-Olaroz lithium project in Jujuy, Argentina. Pursuant to these agreements, each of Ganfeng and Bangchak agreed to co-invest in the Company through a mixture of equity subscriptions and debt financing.

The investment agreements consisted of four key components:

• An equity financing by each of Ganfeng and Bangchak.  Ganfeng subscribed for 15,000 Common Shares while BCP subscribed for 10,000 Common Shares at a price of CDN$4.25 per common share, for gross proceeds of approximately CDN$106,000 ($80,999).

• A $205,000 credit facility agreement.  Under this agreement, each of Ganfeng and Bangchak have committed to advance $125,000 and $80,000 respectively, with proceeds to be used to fund the Company’s share of project development contributions for Stage 1 of the Cauchari-Olaroz project.  As of December 31, 2017, the Company has not drawn down on this credit facility.

• Off-take entitlements in favour of Ganfeng and Bangchak for the purchase of up to 80% and 20% respectively, of the Company’s share of Cauchari-Olaroz Project Stage 1 lithium carbonate production at market prices. The off-take agreements each have a term of 20 years following commencement of commercial production.

• Investor rights agreement.  The Company entered into an investor rights agreement with each of Ganfeng and Bangchak.  Pursuant to these agreements, Ganfeng and Bangchak each have the right to nominate one individual to the board of directors of the Company so long as they maintain a 15% or more interest in the Company’s issued share capital.  Each of Ganfeng and Bangchak have a participation right in connection with future financings to maintain a 17.5% interest and 16.4% interest respectively, so long as they maintain a 15% or more interest in the Company’s issued share capital. 

The parties settled relevant agreements and satisfied all conditions over the course of the first half of 2017, and on July 14, 2017 completed the remaining equity subscriptions and entered into definitive agreements. The Company provided corporate guarantees, to both lenders, Bangchak and Ganfeng, in connection with the debt facility and provided first priority security interest to both lenders on all assets except the interest in Minera Exar. The credit facility agreements contain certain representations and warranties, restrictions, events of default, and covenants, customary for agreements of these types.

17

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Base Shelf Prospectus

On February 7, 2018, the Company filed a final short form base shelf prospectus in each province of Canada, other than the Province of Quebec, to qualify the distribution, from time to time over a 25-month period, of up to US$500 million of the Company’s debt and equity securities. The Company also filed a corresponding shelf registration statement with the SEC on Form F-10 under the Multijurisdictional Disclosure System. While the Company has no immediate plans to raise capital, the shelf prospectus provides financial flexibility and the ability to efficiently access capital markets as the Company pursues future growth opportunities in Argentina, Nevada and elsewhere.

Operating Activities

Cash used in operating activities during FY 2017, was $12,914 compared to $11,312 net cash used during FY 2016.  The significant components of operating activities are discussed in the Results of Operations sections.

Investing Activities

Investing activities consumed cash of $25,551 in FY 2017, compared to $10,530 cash invested during the FY 2016.  In 2017, the Company entered into two loan agreements and advanced $11,000 to Minera Exar. The rate of interest on the first loan with a principal amount of $5,000 is 12-month LIBOR plus 3% and is calculated on the basis of a 360-day year. The maturity date of the loan is two years following the drawdown date. The rate of interest on the second loan with a principal amount of $6,000 is 12-month LIBOR plus 10% and is calculated on the basis of a 360-day year. The maturity date of the loan is fifteen years following the drawdown date. The interest on both loans is accrued on a non–compounding basis. The loans will be used by Minera Exar for mining exploration or mining construction and development purposes. In Q4 2017, the Company made an equity investment in Minera Exar of $13,300. In the comparative 2016 period the Company received $14,661 pursuant to the Joint Venture agreement with SQM and placed $2,500 into an escrow deposit, $834 of which was released in 2017.  The remaining cash used in investing activities was for the additions to property, plant and equipment of $1,059 (2016 - $640) and additions to exploration and evaluation assets of $626 (2016 - $991).

Financing Activities

During FY 2017, the Company received $47,460 in connection with the Ganfeng investment agreement and $33,539 in connection with the Bangchak investment agreement and incurred costs related to equity portion of financings of $1,755, received $812 (2016 - $806) from the exercise of stock options and $5,540 (2016 - $1,149) from the warrant exercises.

In FY 2016, the Company received $3,500 from Bangchak subscription receipt financing and repaid the remaining balance of $1,653 related to convertible security note.

CURRENT SHARE DATA

As at the date of this report, the Company has 88,512 Common Shares issued and outstanding, 1,537 restricted shares, 63 deferred share units, and 5,394 stock options.

RELATED PARTY TRANSACTIONS

The Company`s 50%-owned joint venture Minera Exar entered in the following transactions with companies controlled by the family of the Company’s director, who is the President of Minera Exar S.A.:

- Los Boros Option Agreement entered into with Grupo Minero Los Boros(See Note 5 in December 31, 2017 financial statements);

- Construction services contract for Cauchari-Olaroz project with Magna Construcciones S.R.L. for $2,411 (the Company’s portion is $1,206).

In 2017 Minera Exar paid director’s fee of $75 to its President, who is also the director of the Company.

18

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Compensation of Key Management

Up to August 14, 2017, the Company paid its non-executive directors a base annual fee of $35 per year and an additional $5 per year to a Committee Chair, $10 to the Company’s Audit Committee Chair, and $25 to the Company’s Board Chair.  In addition, the Company paid $1 per meeting in cash for Board meetings in excess of six meetings per year.  

Effective August 14, 2017, the Company revised the remuneration of its non-executive directors to a base annual fee of $80 per year and an additional $18 per year to the Company’s Audit Committee Chair, $13 to the Company’s other Committee Chairs, and $40 to the Company’s Board Chair. In addition, the Company will pay $1 per meeting in cash for Board meetings in excess of six meeting per year. The fees will be settled through a combination of cash and the issuance of DSUs with each board member obligated to receive a minimum of 50% and a maximum of 100% of all such compensation in DSUs.  

The remuneration of directors and members of the executive management team included:

	For the year ended December 31,		For the fifteen months ended December 31,
	2017 $		2016 $
Stock-based compensation		2,507		895
Bonuses - cash		1,425	-
Bonuses - stock-based		6,000		1,499
Salaries, benefits and directors fees included in general and administrative  expenses		1,707		1,901
Salaries and benefits included in exploration expenditures		368		396
Salaries and benefits capitalized to Investment in the Joint Venture		127	-
		12,134		4,691

Amounts due to directors and members of the executive management team were as follows:

	As at December 31, 2017		As at December 31, 2016
	$		$
Non-executive directors' fees		251		174
President		14		115
Non-executive director of the Company and the President of Minera Exar S.A	-			37
CFO	-			30
CEO	-			44
Senior Vice-President, Project Development	-			6
Chief Technical Officer	-			5
Total		265		411

There were no contractual or other commitments from the related party transactions.  The amounts due to related parties are unsecured, non-interest bearing and have no specific terms for repayment.

19

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

CONTRACTUAL OBLIGATIONS

As at December 31, 2017, the Company had the following contractual obligations:

	Not later than 1 year $		Later than 1 year and not later than 5 years $		Later than 5 years $		Total $
Rent of office spaces		276		310	-			586
Promissory note for RheoMinerals plant		172		689		101		962
Equipment finance leases		52		49		-		101
Total		500		1,048		101		1,649

The Company`s other obligations and commitments related to royalties, option payments and annual fees to the aboriginal communities are disclosed in Notes 5 and 7 of the Company’s December 31, 2017 audited consolidated financial statements and will only be incurred if the Company continues to hold the subject property, starts production or exercises the Los Boros Option Agreement entered into with Grupo Minero Los Boros. The Company has US$205 million of available undrawn credit facilities as at December 31, 2017 available to finance its share of the capital costs of the Minera Exar Joint Venture.

FINANCIAL INSTRUMENTS

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.  Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the company has transferred substantially all risks and rewards of ownership.

All of the Company’s financial instruments are classified into one of two categories: loans and receivables, or other financial liabilities.  All financial instruments are initially measured in the statement of financial position at fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.  

Subsequent measurement and changes in fair value will depend on their initial classification.  Loans and receivables and other financial liabilities are measured at amortized cost.  

Cash and receivables and short-term restricted cash have been designated as loans and receivables and are included in current assets due to their short-term nature. Loans to the Joint Venture and long-term restricted cash have been designated as loans and receivables and are included in non-current assets due to their long-term nature. The Company’s other financial liabilities include accounts payable and accrued liabilities, long-term borrowing, convertible security obligation, and obligations under finance leases.  Accounts payable, accrued liabilities, convertible security obligation, and the current portion of long-term borrowing and finance leases that is due within twelve months from the financial statement reporting date are included in current liabilities due to their short-term nature.  Long-term borrowing and obligations under finance leases are included in long-term liabilities due to their long-term nature.

OFF-BALANCE SHEET ARRANGEMENTS

The Company’s off-balance sheet arrangements related to the exploration and evaluation assets are disclosed in notes 5 and 7 of the Company’s audited consolidated financial statements for the year ended December 31, 2017.  The Company’s reclamation bond arrangement is disclosed below.

20

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

DECOMMISSIONING PROVISION AND RECLAMATION BOND

The carrying value of the liability for decommissioning provision that arose to date as a result of exploration activities is $249 for the Lithium Nevada project as at December 31, 2017. In December 2017, the Company’s $1,008 reclamation bond payable to the Bureau of Land Management was guaranteed by a third-party insurance company upon the issuance of Lithium Nevada clay mine project permit to the Company in 2014.  The bond guarantee is renewed annually and secured by the Company’s $150 security deposit.

SIGNIFICANT ACCOUNTING POLICIES

Critical Accounting Estimates and Judgements

The preparation of the financial statements in conformity with IFRS requires judgments, estimates, and assumptions that affect the amounts reported.  Those estimates and assumptions concerning the future may differ from actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting judgments pertain to accounting policies that have been identified as being complex or involving subjective judgments or assessments, as follows:

Commercial viability and technical feasibility of the Cauchari-Olaroz project

The application of the Company’s accounting policy for exploration and evaluation assets requires judgement in assessing when the commercial viability and technical feasibility of the Cauchari-Olaroz project has been determined, at which point the asset is reclassified to property, plant and equipment.  In the judgement of the Company, the commercial viability and technical feasibility of the Cauchari-Olaroz project has been demonstrated effective July 1, 2017.

Impairment of long-lived assets

The application of the Company’s accounting policy for impairment of exploration and evaluation assets and investment in the Joint Venture requires judgment to determine whether indicators of impairment exist including information such as, the period for which the Company has the right to explore including expected renewals, whether substantive expenditures on further exploration and evaluation of resource properties are budgeted and evaluation of the results of exploration and evaluation activities up to the reporting date. Management has performed an impairment indicators assessment on the Company’s exploration and evaluation assets and the investment in Joint Venture and has concluded that no impairment indicators exist as of December 31, 2017.

Impairment of property, plant and equipment

The application of the Company’s accounting policy for impairment of property, plant and equipment requires judgment to determine whether indicators of impairment exist. The review of impairment indicators includes consideration of both external and internal sources of information, including factors such as market and economic conditions, taxation, prices and forecasts, capital expenditure requirements, future operating costs and production volumes. Management has assessed impairment indicators on the Company’s property, plant and equipment and has concluded that no impairment indicators exist as of December 31, 2017.

21

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Accounting Policies

Exploration and Evaluation Assets

Exploration expenditures not including the acquisition costs and claim maintenance costs are expensed as incurred until an economic feasibility study has established the presence of proven and probable reserves and development of the project has commenced, at which time exploration and development expenditures incurred on the property thereafter are capitalized. The establishment of technical feasibility and commercial viability of a mineral property is assessed based on a combination of factors, including:

• The extent to which mineral reserves or mineral resources as defined in National Instrument 43-101 (“NI 43-101”) have been identified through a feasibility study or similar document;

• The status of environmental permits; and

• The status of mining leases or permits.

Costs incurred relating to the acquisition and claim maintenance of mineral properties, including option payments and annual fees to maintain the property in good standing, are capitalized and deferred by property until the project to which they relate is sold, abandoned, impaired or placed into production.  After recognition, the Company uses the cost model for exploration and evaluation assets.

The Company assesses its capitalized mineral property costs for indications of impairment on each balance sheet date and when events and circumstances indicate a risk of impairment.  A property is written down or written off when the Company determines that an impairment of value has occurred or when exploration results indicate that no further work is warranted. Exploration and evaluation assets are tested for impairment immediately prior to reclassification to mineral property development costs.

Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title.  Such properties may be subject to prior agreements or transfers, or title may be affected by undetected defects.

Property, Plant and Equipment

On initial recognition, property, plant and equipment are valued at cost. Cost includes the purchase price and directly attributable cost of acquisition or construction required to bring the asset to the location and condition necessary to be capable of operating in the manner intended by the Company, including appropriate borrowing costs. During the development and commissioning phase, pre-production expenditures, net of incidental proceeds from sales during this period, are capitalized to the asset under construction and equipment. Capitalization of costs incurred ceases when commercial production commences in the manner intended by management. The Company applies judgment in its assessment of when the asset is capable of operating in the manner intended by management.

Property, plant and equipment are subsequently measured at cost less accumulated depreciation, less any accumulated impairment losses, with the exception of land which is not depreciated.  When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items or major components.

Property, plant and equipment that are currently in use are depreciated as follows:

• Organoclay plant – straight-line basis over the estimated useful life of 20 years;

• Buildings – straight-line basis over the estimated useful life of 20 years;

• Organoclay plant equipment included in “Equipment and machinery” – straight line basis over the estimated life of 5-20 years;

• Lithium demo plant equipment included in “Equipment and machinery” – straight-line basis over the estimated useful life of 10 years;

• Office equipment included in “Other” – declining balance method at 20% annual rate; and

• Other equipment included in “Other” – straight-line basis over the estimated useful life of 7-15 years.

22

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

The assets’ residual values, useful lives and depreciation methods are reviewed and adjusted, if appropriate, at each financial year-end.  The gain or loss arising on the disposal of an item of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in profit and loss.

Impairment of Property, Plant and Equipment

Property, plant and equipment are assessed for impairment indicators at each reporting date or when an impairment indicator arises if not at a reporting date.  Impairment indicators are evaluated and, if considered necessary, an impairment assessment is carried out.  If an impairment loss is identified, it is recognized for the amount by which the asset’s carrying amount exceeds it recoverable amount.  The recoverable amount is the higher of an asset’s fair value less cost to sell and value in use.  Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.  For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).  These are typically individual mines, plants or development projects.  

Where the factors which resulted in an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years.  A reversal of an impairment loss is recognized immediately in profit or loss.

Investments in Joint Arrangements

A joint arrangement is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. Joint control is the contractually agreed sharing of control such that significant operating and financial decisions require the unanimous consent of the parties sharing control. The Company’s arrangement with respect to Cauchari-Olaroz project is classified as a joint venture and is accounted for using the equity method. The equity method involves recording the initial investment at cost. When a joint venture is formed from a previous investment in a subsidiary, the Company made a policy choice decision to recognize a gain or loss on change of control in relation to the portion of the investment no longer owned based upon the carrying value of the assets.  Additional funding into an investee is recorded as an increase in the carrying value of the investment. The carrying amount is adjusted by the Company’s share of a joint venture’s net income or loss, depreciation, amortization or impairment. When the Company’s share of losses of a joint venture exceeds the Company’s carrying value of the investment, the Company discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the joint venture.

Stock-Based Compensation

The Company grants stock options to buy Common Shares of the Company to directors, officers, employees and service providers.  The fair value of stock options granted by the Company is treated as compensation costs in accordance with IFRS 2, Share-based Payment.  These costs are charged to the statement of comprehensive (loss)/income over the stock option vesting period.  

Each tranche in an award is considered a separate award with its own vesting period and grant date fair value.  Fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model.  Compensation expense is recognized over the tranche’s vesting period based on the number of awards expected to vest, by increasing contributed surplus.  The number of awards expected to vest is reviewed at least annually with any impact being recognized immediately. Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in the statement of comprehensive (loss)/income, unless they are related to the issuance of shares.  Amounts related to the issuance of shares are recorded as a reduction of share capital.  When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model.  

23

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Share-based payments

In the prior reporting year the Company implemented a new equity incentive plan that allows the grant of restricted shares and deferred share units.  The cost of equity-settled payment arrangements is recorded based on the estimated fair value at the grant date and charged to earning over the vesting period.

Revenue

Organoclay products revenue is recognized when it is probable that the economic benefits will flow to the Company, risks and rewards of ownership are transferred to the customer, delivery has occurred, the sales price is reasonably determinable, and collectability is reasonably assured.  These criteria are generally met at the time the product is shipped or delivered to the customer and, depending on the delivery conditions, title and risk have passed to the customer and acceptance of the product, when contractually required, has been obtained.  Revenue is measured based on the price specified in the sales contract, net of discounts, at the time of sale.

NEW ACCOUNTING STANDARDS AND RECENT PRONOUNCEMENTS

IFRS 9, Financial Instruments (“IFRS 9”), addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in International Accounting Standard (“IAS”) 39 that relates to the classification and measurement of financial instruments.

IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortized cost, fair value through other comprehensive income (“OCI”) and fair value through profit and loss (“FVTPL”). There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39.

For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in OCI, for liabilities designated as FVTPL.  The standard is effective for accounting periods beginning on or after January 1, 2018. The Company has determined that adoption of this standard will have no significant impact on the consolidated financial statements.

IFRS 15, Revenue from Contracts with Customers (“IFRS 15”), deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.  IFRS 15 was issued in May 2014 by the IASB.  Under IFRS 15, revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service.  The standard replaces IAS 18, Revenue, and IAS 11, Construction Contracts, and related interpretations.  The standard is effective for annual periods beginning on or after January 1, 2018. The Company has determined that adoption of this standard will have no significant impact on the consolidated financial statements.

IFRS 16, Leases (“IFRS 16”), was issued in January 2016 by the IASB.  According to the new standard, all leases will be on the statement of financial position of lessees, except those that meet the limited exception criteria.  The standard is effective for annual periods beginning on or after January 1, 2019.  The Company is currently evaluating the effect the standard will have on its consolidated financial statements.

RISKS AND UNCERTAINTIES

The Company’s operations and results are subject to a number of different risks at any given time.  These factors, include but are not limited to disclosure regarding exploration, additional financing, project delay, titles to properties, price fluctuations and share price volatility, operating hazards, insurable risks and limitations of insurance, management, foreign country and regulatory requirements, currency fluctuations and environmental regulations risks.  Exploration for mineral resources involves a high degree of risk.  The cost of conducting programs may be substantial and the likelihood of success is difficult to assess. The Company seeks to counter this risk as much as possible by selecting exploration areas on the basis of their recognized geological potential to host economic deposits.

24

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

A summary of the Company’s financial instruments risk exposure is provided in Note 17 of the Company’s December 31, 2017 audited consolidated financial statements.

The following are additional risk factors that the Company’s management believes are most important in the context of the Company’s business.  It should be noted that this list is not exhaustive and that other risk factors may apply.  Additional risks are disclosed in the Company’s Annual Information Form, which is available on SEDAR at www.sedar.com.

Risks related to resource development

The Cauchari-Olaroz Project and the Lithium Nevada Project may not be developed as planned.

The Company’s business strategy depends in large part on developing the Cauchari-Olaroz Project and the Lithium Nevada Project into one or more commercially viable mines. Whether a mineral deposit will be commercially viable depends on numerous factors, including: (i) the particular attributes of the deposit, such as size, grade and proximity to infrastructure; (ii) commodity prices, which are highly cyclical; and (iii) government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of Mineral Resources, environmental protection and capital and operating cost requirements. Exar has completed a feasibility study for a 25,000 TPA lithium carbonate production operation at the fully-permitted Cauchari-Olaroz Project. The Cauchari Joint Venture has also completed preparatory development work and is currently executing early construction activities, including pond construction, in accordance with the Cauchari-Olaroz Project schedule. LAC has also secured funding that it believes will be sufficient to cover its share of capital expenditure obligations for the first stage of development of the Cauchari-Olaroz Project, and believes that SQM has the financial resources necessary to cover its share. Nevertheless, Exar has not yet approved the final development plan, which requires approval of both Cauchari Joint Venture partners. Accordingly, there can be no assurance that the Company will ever develop either one of these projects. If the Company is unable to develop all or any of its projects into a commercial operating mine, its business and financial condition will be materially adversely affected.

Market prices for key end-use products will greatly affect the value of the Company and the ability of the Company to develop the Cauchari-Olaroz Project and the Lithium Nevada Project.

The ability of the Company to develop the Cauchari-Olaroz Project and the Lithium Nevada Project will be significantly affected by changes in the market price of lithium-based end products, such as lithium carbonate. The market price of these commodity-based products fluctuates widely and is affected by numerous factors beyond LAC’s control, including world supply and demand, pricing characteristics for alternate energy sources such as oil and gas, the level of interest rates, the rate of inflation and the stability of currency exchange rates. Such external economic factors are influenced by changes in international investment patterns, various political developments and macro-economic circumstances. In addition, the price of lithium products is determined by their purity and performance. A fluctuation in these product prices may affect the value of the Company and the potential value of its properties.

There are risks associated with co-ownership arrangements.

The Company and SQM share ownership of the Cauchari-Olaroz Project.  This arrangement is subject to the risks normally associated with the conduct of co-ownership structures. The existence or occurrence of one or more of the following circumstances and events could have a material adverse impact on the Company and the viability of its interest in Exar, the holding company that owns the Cauchari-Olaroz Project, which could have a material adverse impact on the Company’s business prospects, results of operations and financial condition: (i) disagreements with SQM on how to conduct development and operations; (ii) inability of the parties to meet their obligations under the relevant agreements or to third parties; and (iii) disputes or litigation between the parties regarding budgets, development activities, reporting requirements and other matters.

There is risk to the growth of lithium markets.

The development of lithium operations at the Cauchari-Olaroz Project and the Lithium Nevada Project is almost entirely dependent on the adoption of lithium-ion batteries for electric vehicles and other large format batteries that currently have limited market share and whose projected adoption rates are not assured. To the extent that such markets do not develop

25

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

in the manner contemplated by the Company, then the long-term growth in the market for lithium products will be adversely affected, which would inhibit the potential for development of the projects, their potential commercial viability and would otherwise have a negative effect on the business and financial condition of the Company.

There is a risk that LAC will not obtain required government permits and operations will be limited by government-imposed limitations.

Government regulations relating to mineral rights tenure, permission to disturb areas and the right to operate can adversely affect LAC. The Company may not be able to obtain all necessary licenses and permits that may be required to carry out exploration or mining at the Cauchari-Olaroz Project and the Lithium Nevada Project. Obtaining the necessary governmental permits is a complex, time‐consuming and costly process. The duration and success of efforts to obtain permits are contingent upon many variables not within the Company’s control. While LAC holds permits to construct and operate the contemplated Stage 1 of the Cauchari-Olaroz Project at a production rate of 25,000 TPA, any amendments to this mine plan or an increase in production, including a Stage 2 expansion, would need to be approved by regulatory authorities in Argentina. At the Lithium Nevada Project, the permitting process for lithium mining operations is incomplete at this time. There can be no assurance that all necessary approvals and permits will be obtained and, if obtained, that the costs involved will not exceed the Company’s prior estimates. It is possible that the costs and delays associated with the compliance with such standards and regulations could become such that the Company would not proceed with the development of the Cauchari-Olaroz Project or the Lithium Nevada Project.

There are also habitat conservation laws that affect the Lithium Nevada Project. As a result of a review conducted in 2015, the U.S. Fish and Wildlife Service determined not to list sage-grouse under the Endangered Species Act. However, the BLM finalized a land use plan amendment that helps to conserve greater sage-grouse habitat. The BLM considers the sage-grouse to be a special status species, and has designated the Lithium Nevada Project area as a Priority Habitat Management Area. On October 11, 2017, BLM published a Notice of Cancellation of Withdrawal Application and Withdrawal Proposal and Notice of Termination of Environmental Impact Study for Sagebrush Focal Areas Withdrawal in Idaho, Montana, Nevada, Oregon, Utah and Wyoming.  The Notice confirmed that the segregation from mineral entry of the Lithium Nevada Project area expired. The public lands within the Lithium Nevada Project areas are open for mineral entry.  On October 11, 2017, BLM also published notice that it intended to consider amending the land use plan amendment adopted in 2015 and initiated a public comment period.  

On June 7, 2017, the Secretary of the Interior issued Order 3353 which ordered BLM and the United States Fish and Wildlife Service and Geological Survey to review plans and programs developed by affected states, including Nevada, and the 2015 Sage Grouse Plans and related BLM Instruction Memoranda to identify modifications consistent with the multiple use policies stated in Order 3349 which implemented the Executive Order signed March 28, 2017, Promoting Energy Independence and Economic Growth, and to identify opportunities to conserve sage grouse and its habitat without inhibiting job creation and economic growth.  On December 27, 2017, BLM issued Instruction Memoranda providing guidance to BLM regarding the Sage Grouse Habitat Assessment Policy.

LAC anticipates that it will be required by BLM to implement varying stages of mitigation measures for sage-grouse habitat throughout any development of its Lithium Nevada Project. LAC understands that the BLM can impose conditions on access, project design and periods of use where needed to limit impacts to sage-grouse habitat. There is a risk that development may be subject to time delays or restrictions or mitigation measures in order to address sage-grouse habitat protection that could compromise the economic viability of future development of the Lithium Nevada Project.

There is technology risk to the development of the Cauchari-Olaroz Project and the Lithium Nevada Project.

To the Company’s knowledge, lithium carbonate has never been commercially produced from a smectite hectorite clay resource. While the Company has conducted extensive testing that has produced high quality lithium carbonate using known industry processes and equipment, the processes contemplated by LAC for production of lithium at the Lithium Nevada Project have not yet been demonstrated at commercial scale and there is a risk that the Company will not be able to do so. With respect to the Cauchari-Olaroz Project, similar to solid rock deposits, production from brine-recovery projects may be less than in situ volume/grade-based estimates. In the case of brine-recovery projects, the primary extractability limitations are related to low permeability zones, from which brine does not readily flow. A possible analogy in solid rock deposits may be high grade zones for which recovery is not economically feasible due to

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

surrounding lower grade materials, therefore actual production from brine-recovery projects may be less than in situ grades or quantities.

The Company may not be able to achieve and manage its expected growth.

The Cauchari-Olaroz Project is in a development stage, which will require a substantial increase in personnel and business operations. The transition of a mineral project to a development and operating stage, may place a strain on managerial, financial and human resources. The Company’s ability to succeed in these endeavours will depend on a number of factors, including the availability of working capital, existing and emerging competition and the ability to recruit and train additional qualified personnel.

There are political risks associated with the Company's foreign operations.

The Company’s properties are located in Argentina and the United States, exposing it to the laws governing the mining industry in those countries. Changes, if any, in mining or investment policies or shifts in political attitude in any of the jurisdictions in which the Company operates may adversely affect the Company’s operations or profitability. Regardless of the economic viability of the Company’s interest in the Company’s properties, and despite being beyond the Company’s control, such political changes could have a substantive impact on the Company that may prevent or restrict mining of some or all of any deposits on the Company’s properties.

Risk Associated with an Emerging and Developing Market

The Company actively operates in Argentina, which is considered an emerging market. Emerging market investments generally pose a greater degree of risk than investment in more mature market economies because the economies in the developing world are more susceptible to destabilization resulting from domestic and international developments. The Company’s operations in Argentina expose LAC to heightened risks relating to prevailing political and socioeconomic conditions which have historically included, but are not limited to: high rates of inflation; military repression; social and labour unrest; violent crime; civil disturbance; extreme fluctuations in currency exchange rates; expropriation and nationalization; renegotiation or nullification of existing concessions, licenses, permits and contracts; changes in taxation policies; underdeveloped industrial and economic infrastructure; unenforceability of contractual rights; restrictions on foreign exchange and repatriation; and changing political norms, currency controls and governmental regulations that favour or require the Company to award contracts in, employ citizens of, or purchase supplies from, a particular jurisdiction. As an example, in May 2012, the previous government of Argentina re-nationalized YPF, the country’s largest oil and gas company. There can be no assurance that the government of Argentina will not nationalize other businesses operating in the country, including the business of theCompany.  The Company has not purchased any “political risk” insurance coverage and currently has no plans to do so.

Argentinean regulators have broad authority to shut down and/or levy fines against operations that do not comply with regulations or standards. In addition to factors such as those listed above, the Company’s mineral exploration and potential future mining activities in Argentina may also be affected in varying degrees by government regulations with respect to restrictions on production, price controls, foreign exchange controls, export controls, taxes, royalties, environmental legislation and mine safety. Regardless of the economic viability of the Company’s interest in the Company’s properties, and despite being beyond the Company’s control, such factors may prevent or restrict mining of some or all of any deposits which the Company may find on the Company’s properties.

Government authorities in emerging market countries often have a high degree of discretion and at times appear to act selectively or arbitrarily, without hearing or prior notice, and sometimes in a manner that may not be in full accordance with the law or that may be influenced by political or commercial considerations. Unlawful, selective or arbitrary governmental actions could include denial or withdrawal of licences, sudden and unexpected tax audits, forced liquidation, criminal prosecutions and civil actions. Although unlawful, selective or arbitrary government action may be challenged in court, such action, if directed at the Company or its shareholders, could have a material adverse effect on the Company’s business, results of operations, financial condition and future prospects.

Companies operating in emerging markets are subject from time to time to the illegal activities of others, corruption or claims of illegal activities. Often in these markets the bribery of officials remains common, relative to developed markets. Social instability caused by criminal activity and corruption could increase support for renewed central authority,

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

nationalism or violence and thus materially adversely affect the Company’s ability to conduct its business effectively. Such activities have not had a significant effect on the Company’s operations; however, there can be no assurance that they will not in the future, in which case they could restrict the Company’s operations, business, financial condition, results of operations and future prospects, and the value of the Company could be adversely affected by illegal activities by others, corruption or by claims, even if groundless, implicating the Company in illegal activities.

Investors in emerging markets should be aware that these markets are subject to greater risk than more developed markets, including in some cases significant legal, fiscal, economic and political risks. Accordingly, investors should exercise particular care in evaluating the risks involved in an investment in the Company and must decide for themselves whether, in the light of those risks, their investment is appropriate. Generally, investment in emerging and developing markets is suitable only for sophisticated investors who fully appreciate the significance of the risks involved.

The Company does not have any experience in putting a mining project into production.

The Company has never completed a mining development project. The future development of properties found to be economically feasible will require the construction and operation of mines, processing plants and related infrastructure and the Company does not have any experience in taking a mining project to production. As a result of these factors, it is difficult to evaluate the Company’s prospects, and the Company’s future success is more uncertain than if it had a more proven history. In addition, the Company is and will continue to be subject to all the risks associated with establishing new mining operations, including: the timing and cost, which can be considerable, of the construction of mining and processing facilities; the availability and cost of skilled labour and mining equipment; the need to obtain necessary environmental and other governmental approvals and permits and the timing of the receipt of those approvals and permits; the availability of funds to finance construction and development activities; potential opposition from non-governmental organizations, indigenous peoples, environmental groups or local groups which may delay or prevent development activities; and potential increases in construction and operating costs due to changes in the costs of fuel, power, materials and supplies.

It is common in new mining operations to experience unexpected costs, problems and delays during construction, development and mine start-up. In addition, delays in the early stages of mineral production often occur. Accordingly, the Company cannot provide assurance that its activities will result in profitable mining operations at its mineral properties.

Mineral development projects are subject to operational risks.

The Company’s operations are subject to all of the risks normally incidental to the exploration for, and the development and operation of, mineral properties. The Company has implemented comprehensive safety and environmental measures designed to comply with or exceed government regulations and ensure safe, reliable and efficient operations in all phases of its business. Nevertheless, mineral exploration and exploitation involves a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Unusual or unexpected formations, formation pressures, fires, power outages, labour disruptions, flooding, explosions, tailings impoundment failures, cave-ins, landslides and the inability to obtain adequate machinery, equipment or labour are some of the risks involved in mineral exploration and exploitation activities.

Changes in government regulations may affect the Company’s development of the Cauchari-Olaroz Project and the Lithium Nevada Project.

Changes to government laws and regulations may affect the development of the Cauchari-Olaroz Project and the Lithium Nevada Project. Such changes could include laws relating to taxation, royalties, the repatriation of profits, restrictions on production, export controls, environmental and ecological compliance, mine safety and numerous other aspects of the business.

Provincial governments of Argentina have considerable authority over exploration and mining in their province, and there are Argentinean provinces where the provincial government has taken an anti-mining stance by passing laws to curtail or ban mining in those provinces. The Fraser Institutes’, Annual Survey of Mining Companies: 2017, demonstrates a significant improvement of the Province of Jujuy among mining jurisdictions on several of its measurement indices. LAC believes the current provincial government of Jujuy Province, where the Cauchari-Olaroz Project is situated, is supportive of the exploration and mining industry generally, and the project in particular, and the Company and JEMSE, the Jujuy

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

government’s mining Company, have entered into a letter of intent whereby JEMSE will receive an 8.5% equity interest in Exar and is to pay for this interest from dividends from future profits from operations. Further evidence of this support occurred in June 2017, when senior executives from the Company, Exar and SQM attended a meeting in Buenos Aires with government officials from Argentina, including the President of Argentina, Mauricio Macri, and the Governor of the Province of Jujuy, Gerardo Morales. At this meeting, all parties reaffirmed their commitment to support the development of the Cauchari-Olaroz Project. Nevertheless, the political climate for mineral development can change quickly, and there is no assurance that such sentiment will be maintained.

Changes to environmental requirements could significantly increase the Company’s costs.

LAC must comply with stringent environmental regulation in carrying out work on the Cauchari-Olaroz Project and the Lithium Nevada Project. Environmental regulations are evolving in a manner that is expected to require stricter standards and enforcement, increased fines and penalties for non‐compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. Changes in environmental regulations and associated agency requirements could delay and/or increase the cost of exploration and development of the Cauchari-Olaroz Project and the Lithium Nevada Project.

The Company may not be insured against all risks involved in its business operations.

In the course of exploration, development and production of mineral properties, certain risks, and in particular, unexpected or unusual geological operating conditions and other environmental occurrences may occur. It is not always possible to fully insure against such risks and, even where such insurance is available, the Company may decide to not take out insurance against such risks. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the Company.

RheoMinerals’ business operations are subject to risks and hazards, such as fire and explosion. These risks and hazards may be caused by, among other things, the explosive suppression systems and technologies which will be used at the Fernley Facility to remove explosive gases. The Company maintains liability insurance in accordance with industry standards, however the nature of these types of risks is such that liabilities could exceed policy limits and the Company could incur significant costs that could have a material adverse effect on its business, results of operations and financial condition.

There is mineral tenure risk associated with the Lithium Nevada Project.

The Mining Act authorizes the Company to develop and mine the minerals on the claims that form the Lithium Nevada Project which are locatable under the Mining Act. The Mining Act does not explicitly authorize the owner of an unpatented mining claim to sell minerals that are leasable under the Leasing Act. Leasable minerals include potassium and sodium. The Interior Board of Land Appeals of the Department of the Interior has held that, under certain circumstances, the owner of an unpatented mining claim has the authority and right to process and sell minerals governed by the Leasing Act, particularly when they are by-products of the processing of minerals which are locatable under the Mining Act. This matter has not yet been definitively determined in respect of the Lithium Nevada Project.

The Company operates in a highly competitive mining industry.

The mining industry is competitive in all of its phases and requires significant capital, technical resources, personnel and operational experience to effectively compete. Because of the high costs associated with exploration, the expertise required to analyse a project’s potential and the capital required to develop a mine, larger companies with significant resources may have a competitive advantage over LAC. The Company faces strong competition from other mining companies, some with greater financial resources, operational experience and technical capabilities than LAC possesses.

The Company also plans to purchase certain supplies and retain the services of various companies in Argentina to meet its future business plans. It may be difficult to find or hire qualified people in the mining industry who are situated in Argentina or to obtain all of the necessary services or expertise in Argentina or to conduct operations on its projects at reasonable rates. If qualified people and services or expertise cannot be obtained in Argentina, the Company may need to seek and obtain those services from people located outside of Argentina, which will require work permits and compliance with applicable laws, and could result in delays and higher costs to the Company to conduct its operations in Argentina.

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

As a result of this competition, the Company may be unable to maintain or acquire financing, personnel, technical resources or attractive mining properties on terms it considers acceptable.

There is market risk associated with the RheoMinerals Business.

The success of RheoMinerals will depend upon its current and proposed products meeting acceptable cost and performance criteria in the marketplace. There can be no assurances that the Company’s products will meet applicable price or performance objectives or that unanticipated technical, regulatory or other problems will not occur which would result in increased costs or material delays.  The use of RheoMinerals’ organoclay products also depends in large part on the state of deep well and directional drilling to access deposits of oil and gas. In the case of certain product applications, RheoMinerals’ products compete with a number of other materials, such as polymers and other competitors of organoclay. Improvements in the technology, production, pricing or acceptance of these competitive materials relative to RheoMinerals’ products, or other changes in the industries for these competitive materials, could have a material adverse effect on the Company’s business, results of operations and financial condition.

Mineral Resources and Mineral Reserves are only estimates.

The Mineral Resource and Mineral Reserves estimates included in this REPORT are estimates only. No assurance can be given that any particular level of recovery of minerals will in fact be realized or that identified Mineral Reserves or Mineral Resources will ever qualify as a commercially mineable (or viable) deposit which can be legally and economically exploited. In addition, the grade of mineralization which may ultimately be mined may differ from that indicated by drilling results and such differences could be material. Production can be affected by such factors as permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. The estimated Mineral Resources and Mineral Reserves described in this REPORT should not be interpreted as assurances of commercial viability or potential or of the profitability of any future operations. Investors are cautioned not to place undue reliance on these estimates.

In addition, Inferred Mineral Resources are quoted in the Lithium Nevada TR. Inferred Mineral Resources have a great amount of uncertainty as to their existence, and economic and legal feasibility. Accordingly, there is no assurance that Inferred Mineral Resources will ever be upgraded to a higher category. Investors are cautioned not to assume that part or all of an Inferred Mineral Resource exists, or is economically or legally mineable.

The Company may face opposition to mining projects.

The Cauchari-Olaroz Project and the Lithium Nevada Project, like many mining projects, may have opponents. Opponents of other mining projects have, in some cases, been successful in bringing public and political pressure against mining projects. In the event there is opposition to Cauchari-Olaroz Project and/or the Lithium Nevada Project, the Company’s development of such properties may be delayed or prevented, even if such development is found to be economically viable and legally permissible.

The Cauchari and Olaroz salt lakes are not subject to reservoir management rules.

There are no general unitization or reservoir management rules governing the salt lakes on which the Company’s Cauchari-Olaroz Project is situated or on any of the other salt lakes at which the Company holds mining or exploration permits. Unitization is the joint, coordinated operation of a reservoir by all the owners of rights in the separate tracts overlying the reservoir. Without unitized operation of the reservoir, the “rule of capture” results in competitive drilling, extraction and production with consequent economic and physical waste, as each separate owner attempts to secure his or her “fair share” of the underground resource by drilling more and pumping faster than its neighbour. As a result, the lack of unitization and reservoir management rules on the salt lakes on which the Company operates may materially adversely affect the Company’s operations and production. Exar and Sales de Jujuy S.A. (an Orocobre subsidiary) have entered into a Joint Operation Protocol for the Olaroz and Cauchari Salt Flats designed to coordinate their activities in the area, particularly in respect of the tenements adjacent to, and between those held by each company, in accordance to the current environmental permit that each company has been granted by the Province of Jujuy authority. 

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

The aboriginal communities located on the Cauchari-Olaroz Project may not honour the current surface access agreements with Exar.

Exar has entered into seven agreements for surface access with the aboriginal communities located on the exploitation area of the Cauchari-Olaroz Project. Should any of the aboriginal communities decide not to honour such agreements, Exar would be required to enforce its statutory access rights under the provisions of the Argentine Mining Code; however this would be a disruptive and potentially costly process. To date, there are settled agreements covering construction and development of the Cauchari-Olaroz Project with all but two aboriginal communities. Exar is currently under advance negotiation with these two communities to finalize agreements covering development and operations. A failure to settle these agreements could disrupt the development timetable for the Cauchari-Olaroz Project. In addition, lack of surface access agreements with local communities could affect the renewal of the EIS.

Business risks

The Company has not yet achieved profitable operations and expects to incur further losses in the development of its business.

The Company’s ability to continue as a going concern is dependent upon the ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company has reported net losses and comprehensive losses for the financial year ending December 31, 2017. The Company’s business does not currently operate on a self-sustaining basis and its ability to continue as a going concern is dependent on raising additional funds.

The Amended Credit Facility contains covenants which the Company could fail to meet.

The Amended Credit Facility contains financial, operating and reporting covenants, and compliance with those covenants may increase the Company's administrative, legal and financial costs, make some activities more difficult, time-consuming or costly and increase demand on the Company's system and resources.

While the Company has not yet drawn down on the Amended Credit Facility, it expects to do so soon. The failure of the Company to comply with restrictions and covenants under its indebtedness, which may be affected by events beyond the Company's control, could result in a default under such indebtedness, which could result in acceleration thereunder and the Company being required to repay amounts owing thereunder. If the Company's indebtedness is accelerated, the Company may not be able to repay its indebtedness or borrow sufficient funds to refinance it, and any such prepayment or refinancing could adversely affect the Company's financial condition. Even if the Company is able to obtain new financing, it may not be on commercially reasonable terms or terms that are acceptable to the Company.

If the Company is unable to repay amounts owing, the lenders under its indebtedness could proceed to realize upon the security, as applicable, granted to them to secure the indebtedness. The Amended Credit Facility is secured against collateral of the Company, a realization by the lenders thereunder of any or all of the security will have a material adverse effect on the Company's business, financial condition, results of operations, cash flows and prospects and may result in a substantial reduction or elimination entirely of assets available for distribution to equity holders on a dissolution or wind-up of the Company.

The acceleration of the Company's indebtedness under one agreement may permit acceleration of indebtedness under other agreements that contain cross default or cross-acceleration provisions. Even if the Company is able to comply with all applicable covenants, restrictions on its ability to manage its business in its sole discretion could adversely affect its business by, among other things, limiting its ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that the Company believes may be beneficial to it.

Indebtedness owing under the Amended Credit Facility could have other significant consequences on the Company, including: (i) increasing the Company's vulnerability to general adverse economic and industry conditions; (ii) requiring the Company to dedicate a substantial portion of its expected cash flow from expected operations to making interest and principal payments on its indebtedness, reducing the availability of the Company's cash flow to fund capital expenditures, working capital and other general corporate purposes; (iii) limiting the Company's flexibility in planning for, or reacting

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

to, changes in its business; (iv) placing the Company at a competitive disadvantage compared with its competitors that have less debt or greater financial resources; and (v) limiting, including pursuant to any financial and other restrictive covenants in such indebtedness, the Company's ability to, among other things, borrow additional funds or raise capital on commercially reasonable terms, if at all, enter into a reorganization, amalgamation, arrangement, merger or other similar transaction, make an investment in or otherwise acquire the property of another person, and materially amend or provide waivers or consents with respect to material contracts.

The Company will require additional funding, potentially diluting the holdings of existing shareholders or increasing financial risk through debt issuance.

The Company has limited financial resources and is subject to significant capital requirements associated with its projects. There is no assurance that the Company will be able to obtain sufficient financing in the future on terms acceptable to it. The ability of the Company to arrange additional financing in the future will depend, in part, on prevailing capital market conditions as well as the business performance of the Company. Failure to obtain additional financing on a timely basis may cause the Company to postpone, abandon, reduce or terminate its operations and could have a material adverse effect on the Company’s business, results of operations and financial condition.

A likely source of future financing is the sale of additional Common Shares, which would mean that each existing shareholder would own a smaller percentage of the Common Shares then outstanding. Alternatively, the Company may rely on debt financing and assume debt obligations that require it to make substantial interest and capital payments. Also, the Company may issue or grant warrants or options in the future pursuant to which additional Common Shares may be issued. Exercise of such warrants or options will result in dilution of equity ownership to the Company’s existing shareholders.

The Company may also sell a further interest in the Cauchari-Olaroz Project, or all or a portion of the Lithium Nevada Project or an additional royalty therein, or may also sell an interest in RheoMinerals, any of which would mean that each existing shareholder would own a smaller percentage of the Cauchari-Olaroz Project, Lithium Nevada Project or RheoMinerals, respectively.

There is intellectual property risk associated with the Company.

The Company relies on the ability to protect its intellectual property rights and depend on patent, trademark and trade secret legislation to protect its proprietary know-how. There is no assurance that the Company has adequately protected or will be able to adequately protect its valuable intellectual property rights, or will at all times have access to all intellectual property rights that are required to conduct its business or pursue its strategies, or that the Company will be able to adequately protect itself against any intellectual property infringement claims. There is also no assurance that competitors of LAC will not be able to develop similar technology, processes or know how independently, that the Company’s trade secrets will not be revealed, that the claims allowed with respect to any current or future patents pending, or patents now held, will be broad enough to protect the Company’s intellectual property rights, or that foreign intellectual property laws will adequately protect such rights. Failure of any intellectual property rights to provide protection to the Company could result in its competitors offering similar products to RheoMinerals’ organophilic clay-based products or utilizing its lithium extraction process. Any adverse outcome that the Company may experience whilst attempting to obtain, maintain or enforce its intellectual property rights could have a material adverse effect on the Company’s business, results of operations and financial condition.

The Company is dependent on the expertise of consultants.

The Company has relied on, and may continue to rely on, consultants and others for mineral exploration and exploitation expertise. The Company believes that those consultants are competent and that they have carried out their work in accordance with internationally recognized industry standards. However, if the work conducted by those consultants is ultimately found to be incorrect or inadequate in any material respect, the Company may experience delays or increased costs in developing its properties.

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

The Company has no history of paying dividends.

LAC has not paid dividends on its Common Shares since incorporation and presently has no ability to generate earnings as its mineral properties are in the exploration stage. If the Lithium Nevada Project or the Cauchari-Olaroz Project are successfully developed, the Company anticipates that it will retain future earnings and other cash resources for the future operation and development of its business. The Company does not intend to declare or pay any cash dividends in the foreseeable future. Payment of any future dividends is solely at the discretion of the Board, which will take into account many factors including the Company’s operating results, financial conditions and anticipated cash needs. For these reasons, LAC may never pay dividends.

The success of the Company is largely dependent on a few key individuals.

The success of the Company will be largely dependent upon the performance of its key officers, consultants and employees. Failure to retain key individuals or to attract, and, if attracted, retain additional key individuals with necessary skills could have a materially adverse impact upon the Company’s success. The Company has not purchased any “key-man” insurance with respect to any of its directors, officers or key employees and has no current plans to do so.

The Company’s business is affected by fluctuations in currency exchange rates.

Business is transacted by the Company primarily in Canadian, U.S. and Argentinean currencies. Fluctuations in exchange rates may have a significant effect on the cash flows of the Company. The Argentinean peso has been subject to large devaluations and revaluations in the past and may be subject to significant fluctuations in the future. Future changes in exchange rates could materially affect the Company’s results in either a positive or negative direction. The Company’s Lithium Nevada Project and its RheoMinerals business are located in Nevada, and most of the property related expenditures, exploration and development costs are denominated in U.S. dollars. The Company’s Cauchari-Olaroz Project is located in Argentina, where certain costs are denominated in the Argentinean peso and certain costs are denominated in U.S. dollars. Appreciation of U.S. or Argentinean currency compared to Canadian currency could make property expenditures more expensive for the Company. While the Company does not engage in foreign exchange hedging, it holds a significant portion of its cash balance in U.S. currency in order to meet its US currency obligations.

Conflicts of interest may arise for certain directors and officers of the Company.

Certain directors and officers of the Company are, or may become, associated with other natural resource companies which may give rise to conflicts of interest. In accordance with the BCBCA, directors who have a material interest in any person who is a party to a material contract or a proposed material contract with the Company are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve the contract. In addition, directors and the officers are required to act honestly and in good faith with a view to the best interests of the Company.

The Company’s share price is subject to market volatility.

The market price of a publicly traded stock, especially a resource issuer such as LAC, is affected by many variables in addition to those directly related to exploration successes or failures. Such factors include the general condition of markets for resource stocks, the strength of the economy generally, the availability and attractiveness of alternative investments, and the breadth of the public markets for the stock. Therefore, investors could suffer significant losses if the Company’s Common Shares are depressed or illiquid when an investor seeks liquidity.

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LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

The Company may face cyber-security risks and threats

Threats to information technology systems associated with cyber-security risks and cyber incidents or attacks continue to grow. It is possible that the business, financial and other systems of the Company or the companies in which it has invested could be compromised, which might not be noticed for some period of time. Risks associated with these threats include, among other things, loss of intellectual property, disruption of business operations and safety procedures, loss or damage to worksite data delivery systems, and increased costs to prevent, respond to or mitigate cyber-security events

INVESTOR RELATIONS

Tom Hodgson, CEO, and John Kanellitsas, President and Vice-Chairman coordinate investor relations’ activities for the Company.

CHANGES IN DIRECTORS AND MANAGEMENT

In November 2017, Jean Fraser was appointed to Lithium Americas’ Board of Directors. Ms. Fraser has had a distinguished legal career as a partner and leader at Osler, Hoskin & Harcourt LLP, a pre-eminent Canadian law firm.

In August 2017, the Company appointed Alexi Zawadzki as the President of North American Operations.  Alexi has over 20 years of experience developing and constructing mining and energy projects across North and South America, in addition to the management of technical teams and business units.

John Macken did not stand for re-election at the Company’s AGM on August 14, 2017 and retired from the Board.

In July 2017, Chaiwat Kovavisarach was appointed to Lithium Americas’ Board of Directors.  Mr. Kovavisarach is currently Chief Executive Officer of Bangchak.

In June 2017, Gary Cohn, Wang Xiaoshen and Jonathan Evans were appointed to Lithium America’s Board of Directors. Prior to his recent consulting work on corporate development matters, Mr. Cohn had a lengthy career with Magna International Inc. which began in 1989. His roles with Magna included overseeing the mergers and acquisitions function, serving as in-house legal counsel and acting as corporate secretary.  He was a member of the Board of Directors of the former Lithium Americas Corp. from 2014 until its merger with the Company.  Mr. Wang was appointed as the nominee of Jiangxi Ganfeng Lithium Co. Ltd., which has a board nomination right pursuant to the strategic financing with the Company. Mr. Wang is currently Vice Chairman and Executive Vice President of Ganfeng Lithium.

Mr. Evans has more than 20 years of operations and general management experience across businesses of various sizes and industry applications. Previously, he served as Vice President and GM for the Lithium Division at FMC Corporation. Mr. Evans is currently the Chief Operating Officer of DiversiTech Corporation. Mr. Evans has also held executive management roles at Arysta LifeScience, AMRI Corporation and General Electric.

Coincident with the appointment of Mr. Wang and Mr. Evans to the Board, Lenard Boggio and Nicole Adshead-Bell voluntarily stepped down as directors of the Company.

In May 2017 the Company announced the appointment of Gabriel Rubacha as the Company’s President, South American Operations.  Mr. Rubacha was previously the Commercial Director of Techint Engineering and Construction S.A. (“Techint”).  Mr. Rubacha continues to serve as a director of the Company and as the Company’s representative on the Board of the Joint Venture company Minera Exar.

TECHNICAL INFORMATION AND QUALIFIED PERSON

All technical information contained in this MD&A has been reviewed and approved by Dr. Rene LeBlanc and/or Randal Burns, both full-time employees of Lithium Nevada Corp. They are considered, by virtue of education, experience and professional association, Qualified Persons (“QPs”) for the purposes of NI 43-101.

34

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed under securities legislation is recorded, processed, summarized and reported within the time periods specified by securities regulators and include controls and procedures designed to ensure that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed under securities legislation is accumulated and communicated to the issuer’s management, including its certifying officers, as appropriate to allow timely decisions regarding required disclosure.  The Company’s management designed the disclosure controls and procedures to provide reasonable assurance that material information relating to the Company, including its consolidated subsidiaries, is made known to them on a timely basis.  The Company’s management believes that any disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.  

Management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings).  Based on that evaluation and as at December 31, 2017, the certifying officers have each concluded that such disclosure controls and procedures are effective to achieve the purpose for which they have been designed.

INTERNAL CONTROLS OVER FINANCIAL REPORTING

As a U.S. listed public company with less than US$1.07 billion in gross revenue, we qualify as an “emerging growth company” (“EGC”) under the Jumpstart Our Business Startups Act, or the JOBS Act. As an EGC, we are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002, which generally requires that a public company’s registered public accounting firm provide an attestation report relating to management’s assessment of internal control over financial reporting. We will retain the status of an EGC until the earliest of (a) the last day of the fiscal year in which we have annual gross revenues of US$1.07 billion or more; (b) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act of 1933; (c) the date on which we have, during the previous three-year period, issued more than US$1 billion in nonconvertible debt; or (d) the date on which we are deemed to be a “large accelerated filer”, as defined in Rule 12b-2 under the Securities Exchange Act of 1934.

Internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS.  Management is responsible for the design of the Company’s internal controls over financial reporting.  

The Company’s internal controls over financial reporting include policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of assets, provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the financial statements in accordance with IFRS and that receipts and expenditures are being made only in accordance with authorization of management and directors of the Company, and provide reasonable assurance regarding prevention or timely detection of authorized acquisition, use or disposition of assets that could have a material effect on the financial statements.

Because of their inherent limitations, internal controls over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements.  Furthermore, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management, under the supervision of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s internal controls over financial reporting using framework and criteria established in Internal Control-Integrated Framework, issued by the 2013 Committee of Sponsoring Organizations of the Treadway Commission.  Based on that evaluation, management has concluded that internal controls over financial reporting were effective as at December 31, 2017.  

35

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

There has been no change in the Company’s internal controls over financial reporting that occurred during the most recently completed quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.

FORWARD-LOOKING STATEMENTS

This report contains “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward-looking information”). These statements relate to future events or the Company’s future performance. All statements, other than statements of historical fact, may be forward-looking information. Information concerning mineral resource and mineral reserve estimates also may be deemed to be forward-looking information in that it reflects a prediction of mineralization that would be encountered if a mineral deposit were developed and mined. Forward-looking information generally can be identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “propose”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information.

In particular, this report contains forward-looking information, including, without limitation, with respect to the following matters or the Company’s expectations relating to such matters: capital expenditures and programs; estimates of the mineral resources and reserves at its properties; development of mineral resources and reserves; government regulation of mining operations and treatment under governmental and taxation regimes; the future price of commodities, including lithium; the realization of mineral resources and reserves estimates; the timing and amount of future production; currency exchange and interest rates, expected outcome and timing of environmental surveys and permit applications and other environmental matters; the Company’s ability to raise capital; expected expenditures to be made by the Company on its properties; the timing, cost, quantity, capacity and product quality of production of the Cauchari-Olaroz Project, which is held and operated through the Company’s joint venture with SQM; capital costs, operating costs, sustaining capital requirements, after tax net present value and internal rate of return and sensitivity analyses, net cash flows and EBITDA of the Cauchari-Olaroz Project; the cost, timing and size of a potential expansion of the Cauchari-Olaroz Project; the completion of a preliminary feasibility study in respect of lithium production at the Lithium Nevada Project; and the development of new organoclay products and the timing, cost, quantity, capacity and product quality of sales and commercial production at the Fernley Facility.

Forward-looking information does not take into account the effect of transactions or other items announced or occurring after the statements are made. Forward-looking information is based upon a number of expectations and assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. With respect to forward-looking information listed above and incorporated by reference herein, the Company has made assumptions regarding, among other things:

• uncertainties relating to receiving mining, exploration, environmental and other permits or approvals in Nevada and Argentina;

• the impact of increasing competition in the lithium business;

• unpredictable changes to the market prices for lithium and clay-based organoclay products;

• exploration, development and construction costs for the Cauchari-Olaroz Project and the Lithium Nevada Project;

• anticipated timing and results of exploration, development and construction activities;

• the Company’s ability to obtain additional financing on satisfactory terms or at all;

• the ability to achieve production at any of the Company’s mineral exploration and development properties;

• completion of a preliminary feasibility study in respect of the Lithium Nevada Project;

• preparation of a development plan for lithium production at the Lithium Nevada Project; and

• the continued growth of the shale gas and ultra-deep oil drilling and the growth of demand for lithium chemicals.

36

LITHIUM AMERICAS CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2017

Although the Company believes that the assumptions and expectations reflected in such forward-looking information are reasonable, we can give no assurance that these assumptions and expectations will prove to be correct, and since forward-looking information inherently involves risks and uncertainties, undue reliance should not be placed on such information.

The Company’s actual results could differ materially from those anticipated in any forward-looking information as a result of the risk factors contained in this report, including but not limited to, the factors referred to under the heading “Risk Factors” in this report. Such risks also include, but are not limited to the following: volatility in the market price for minerals; uncertainties associated with estimating mineral resources and mineral reserves, including uncertainties relating to the assumptions underlying mineral resource and mineral reserve estimates; uncertainty of whether there will ever be production at the Company’s mineral exploration properties; geological, technical, drilling or processing problems; uncertainties in estimating capital and operating costs, cash flows and other project economics; liabilities and risks, including environmental liabilities and risks inherent in mineral extraction operations; fluctuations in currency exchange and interest rates; incorrect assessments of the value of acquisitions; unanticipated results of exploration activities; competition for, amongst other things, capital, undeveloped lands and skilled personnel; lack of availability of additional financing on terms acceptable to the Company and/or joint venture partners; unpredictable weather conditions; unanticipated delays in preparing technical studies; the ability to manufacture organoclay products that meets customer requirements; an increase in the costs of manufacturing organoclay products, including the costs of any raw materials used in the process; and a reduction in the demand for shale or ultra-deep drilling or in the demand for lithium. Consequently, actual results and events may vary significantly from those included in, contemplated or implied by such statements.

Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking information contained in this report is expressly qualified by these cautionary statements. All forward-looking information in this report speaks as of the date of this report. The Company does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. Additional information about these assumptions and risks and uncertainties is contained in our filings with securities regulators, including our most recent management’s discussion and analysis for our most recently completed financial year, which are available on SEDAR at www.sedar.com.

37

EX-99.4

Exhibit 99.4

       Consent of Independent Auditor

We hereby consent to the incorporation by reference in this Annual Report on Form 40-F for the year ended December 31, 2017 of Lithium Americas Corp. of our report dated March 28, 2018 relating to the consolidated financial statements, which appears in the Exhibit incorporated by reference in this Annual Report.

We also consent to the incorporation by reference in the Registration Statement on Form F-10 (No. 333-222595) of Lithium Americas Corp. of our report dated March 28, 2018 referred to above.

/s/ PricewaterhouseCoopers LLP

Chartered Professional Accountants

Vancouver, Canada

March 28, 2018

EX-99.5

Exhibit 99.5

CERTIFICATION

I, Thomas Hodgson, CEO of Lithium Americas Corp., certify that:

1. I have reviewed this annual report on Form 40-F of Lithium Americas Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the issuer and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date:  March 28, 2018

/s/ “Thomas Hodgson”

Thomas Hodgson, CEO

EX-99.6

Exhibit 99.6

CERTIFICATION

I, Eduard Epshtein, CFO of Lithium Americas Corp., certify that:

1. I have reviewed this annual report on Form 40-F of Lithium Americas Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the issuer and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date: March 28, 2018

/s/ “Eduard Epshtein”

Eduard Epshtein, CFO

EX-99.7

Exhibit 99.7

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ENACTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Lithium Americas Corp. (the “Company”) on Form 40-F for the year ended December 31, 2017 (the “Report”) as filed with the U.S. Securities and Exchange Commission,

I, Thomas Hodgson, CEO of Lithium Americas Corp., certify, pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002, that to my knowledge:

(i) the Report fully complies with the requirements of Section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  March 28, 2018

/s/ “Thomas Hodgson”

Thomas Hodgson, CEO

EX-99.8

Exhibit 99.8

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ENACTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Lithium Americas Corp (the “Company”) on Form 40-F for the year ended December 31, 2017 (the “Report”) as filed with the U.S. Securities and Exchange Commission,

I, Eduard Epshtein, CFO of Lithium Americas Corp., certify, pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002, that to my knowledge:

(i) the Report fully complies with the requirements of Section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 28, 2018

/s/ “Eduard Epshtein”

Eduard Epshtein, CFO

EX-99.9

Exhibit 99.9

CONSENT OF DARON ABBEY

March 28, 2018

VIA EDGAR

United States Securities and Exchange Commission

Re: Lithium Americas Corp. (the “Company”)

Annual Report on Form 40-F of the Company for the year ended December 31, 2017 (the “Form 40-F”)

I, Daron Abbey, hereby consent to the use of my name in connection with reference to my involvement in the preparation of the following technical report (the “Technical Report”):

• Technical Report titled “Updated Feasibility Study, Reserve Estimation and Lithium Carbonate Production at the Cauchari-Olaroz Salars, Jujuy Province, Argentina”, dated January 15, 2018, effective March 29, 2017.

and to references to the Technical Report, or portions thereof, in the Form 40-F, which is being filed pursuant to the Securities Exchange Act of 1934, as amended, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the Form 40-F. This consent extends to any amendments to the Form 40-F.

I also hereby consent to the use of my name in connection with reference to my involvement in the preparation of the Technical Report, to references to the Technical Report, or portions thereof, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the registration statement (No. 333-222595) on Form F-10. This consent extends to any amendments to the Form F-10, including post-effective amendments.

/s/ Daron Abbey

Daron Abbey

EX-99.10

Exhibit 99.10

CONSENT OF MARK KING

March 28, 2018

VIA EDGAR

United States Securities and Exchange Commission

Re: Lithium Americas Corp. (the “Company”)

Annual Report on Form 40-F of the Company for the year ended December 31, 2017 (the “Form 40-F”)

I, Mark King, hereby consent to the use of my name in connection with reference to my involvement in the preparation of the following technical report (the “Technical Report”):

• Technical Report titled “Updated Feasibility Study, Reserve Estimation and Lithium Carbonate Production at the Cauchari-Olaroz Salars, Jujuy Province, Argentina”, dated January 15, 2018, effective March 29, 2017.

and to references to the Technical Report, or portions thereof, in the Form 40-F, which is being filed pursuant to the Securities Exchange Act of 1934, as amended, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the Form 40-F. This consent extends to any amendments to the Form 40-F.

I also hereby consent to the use of my name in connection with reference to my involvement in the preparation of the Technical Report, to references to the Technical Report, or portions thereof, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the registration statement (No. 333-222595) on Form F-10. This consent extends to any amendments to the Form F-10, including post-effective amendments.

/s/ Mark King

Mark King

EX-99.11

Exhibit 99.11

CONSENT OF DAVID BURGA

March 28, 2018

VIA EDGAR

United States Securities and Exchange Commission

Re: Lithium Americas Corp. (the “Company”)

Annual Report on Form 40-F of the Company for the year ended December 31, 2017 (the “Form 40-F”)

I, David Burga, hereby consent to the use of my name in connection with reference to my involvement in the preparation of the following technical report (the “Technical Report”):

• Technical Report titled “Updated Feasibility Study, Reserve Estimation and Lithium Carbonate Production at the Cauchari-Olaroz Salars, Jujuy Province, Argentina”, dated January 15, 2018, effective March 29, 2017.

and to references to the Technical Report, or portions thereof, in the Form 40-F, which is being filed pursuant to the Securities Exchange Act of 1934, as amended, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the Form 40-F. This consent extends to any amendments to the Form 40-F.

I also hereby consent to the use of my name in connection with reference to my involvement in the preparation of the Technical Report, to references to the Technical Report, or portions thereof, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the registration statement (No. 333-222595) on Form F-10. This consent extends to any amendments to the Form F-10, including post-effective amendments.

/s/ David Burga

David Burga

EX-99.12

Exhibit 99.12

CONSENT OF ERNEST BURGA

March 28, 2018

VIA EDGAR

United States Securities and Exchange Commission

Re: Lithium Americas Corp. (the “Company”)

Annual Report on Form 40-F of the Company for the year ended December 31, 2017 (the “Form 40-F”)

I, Ernest Burga, hereby consent to the use of my name in connection with reference to my involvement in the preparation of the following technical report (the “Technical Report”):

• Technical Report titled “Updated Feasibility Study, Reserve Estimation and Lithium Carbonate Production at the Cauchari-Olaroz Salars, Jujuy Province, Argentina”, dated January 15, 2018, effective March 29, 2017.

and to references to the Technical Report, or portions thereof, in the Form 40-F, which is being filed pursuant to the Securities Exchange Act of 1934, as amended, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the Form 40-F. This consent extends to any amendments to the Form 40-F.

I also hereby consent to the use of my name in connection with reference to my involvement in the preparation of the Technical Report, to references to the Technical Report, or portions thereof, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the registration statement (No. 333-222595) on Form F-10. This consent extends to any amendments to the Form F-10, including post-effective amendments.

/s/ Ernest Burga

Ernest Burga

EX-99.13

Exhibit 99.13

CONSENT OF MICHAEL J. ROSKO

March 28, 2018

VIA EDGAR

United States Securities and Exchange Commission

Re: Lithium Americas Corp. (the “Company”)

Annual Report on Form 40-F of the Company for the year ended December 31, 2017 (the “Form 40-F”)

I, Michael J. Rosko, hereby consent to the use of my name in connection with reference to my involvement in the preparation of the following technical report (the “Technical Report”):

• Technical Report titled “Updated Feasibility Study, Reserve Estimation and Lithium Carbonate Production at the Cauchari-Olaroz Salars, Jujuy Province, Argentina”, dated January 15, 2018, effective March 29, 2017.

and to references to the Technical Report, or portions thereof, in the Form 40-F, which is being filed pursuant to the Securities Exchange Act of 1934, as amended, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the Form 40-F. This consent extends to any amendments to the Form 40-F.

I also hereby consent to the use of my name in connection with reference to my involvement in the preparation of the Technical Report, to references to the Technical Report, or portions thereof, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the registration statement (No. 333-222595) on Form F-10. This consent extends to any amendments to the Form F-10, including post-effective amendments.

/s/ Michael J. Rosko

Michael J. Rosko

EX-99.14

Exhibit 99.14

CONSENT OF TONY SANFORD

March 28, 2018

VIA EDGAR

United States Securities and Exchange Commission

Re: Lithium Americas Corp. (the “Company”)

Annual Report on Form 40-F of the Company for the year ended December 31, 2017 (the “Form 40-F”)

I, Tony Sanford, hereby consent to the use of my name in connection with reference to my involvement in the preparation of the following technical report (the “Technical Report”):

• Technical Report titled “Updated Feasibility Study, Reserve Estimation and Lithium Carbonate Production at the Cauchari-Olaroz Salars, Jujuy Province, Argentina”, dated January 15, 2018, effective March 29, 2017.

and to references to the Technical Report, or portions thereof, in the Form 40-F, which is being filed pursuant to the Securities Exchange Act of 1934, as amended, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the Form 40-F. This consent extends to any amendments to the Form 40-F.

I also hereby consent to the use of my name in connection with reference to my involvement in the preparation of the Technical Report, to references to the Technical Report, or portions thereof, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the registration statement (No. 333-222595) on Form F-10. This consent extends to any amendments to the Form F-10, including post-effective amendments.

/s/ Tony Sanford

Tony Sanford

EX-99.15

Exhibit 99.15

CONSENT OF BARRY W. SMEE

March 28, 2018

VIA EDGAR

United States Securities and Exchange Commission

Re: Lithium Americas Corp. (the “Company”)

Annual Report on Form 40-F of the Company for the year ended December 31, 2017 (the “Form 40-F”)

I, Barry W. Smee, hereby consent to the use of my name in connection with reference to my involvement in the preparation of the following technical report (the “Technical Report”):

• Technical Report titled “Updated Feasibility Study, Reserve Estimation and Lithium Carbonate Production at the Cauchari-Olaroz Salars, Jujuy Province, Argentina”, dated January 15, 2018, effective March 29, 2017.

and to references to the Technical Report, or portions thereof, in the Form 40-F, which is being filed pursuant to the Securities Exchange Act of 1934, as amended, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the Form 40-F. This consent extends to any amendments to the Form 40-F.

I also hereby consent to the use of my name in connection with reference to my involvement in the preparation of the Technical Report, to references to the Technical Report, or portions thereof, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the registration statement (No. 333-222595) on Form F-10. This consent extends to any amendments to the Form F-10, including post-effective amendments.

/s/ Barry W. Smee, Ph.D., P.Geo., FGC

Barry W. Smee, Ph.D., P.Geo., FGC

EX-99.16

Exhibit 99.16

CONSENT OF MARIO E. ROSSI

March 28, 2018

VIA EDGAR

United States Securities and Exchange Commission

Re: Lithium Americas Corp. (the “Company”)

Annual Report on Form 40-F of the Company for the year ended December 31, 2017 (the “Form 40-F”)

I, Mario E. Rossi, hereby consent to the use of my name in connection with reference to my involvement in the preparation of the following technical report (the “Technical Report”):

• Technical Report titled “Independent Technical Report for the Lithium Nevada Property, Nevada, USA”, dated June 2, 2016, effective May 31, 2016, as amended on December 15, 2017.

and to references to the Technical Report, or portions thereof, in the Form 40-F, which is being filed pursuant to the Securities Exchange Act of 1934, as amended, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the Form 40-F. This consent extends to any amendments to the Form 40-F.

I also hereby consent to the use of my name in connection with reference to my involvement in the preparation of the Technical Report, to references to the Technical Report, or portions thereof, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the registration statement (No. 333-222595) on Form F-10. This consent extends to any amendments to the Form F-10, including post-effective amendments.

/s/ Mario E. Rossi

Mario E. Rossi

EX-99.17

Exhibit 99.17

CONSENT OF RENE LEBLANC

March 28, 2018

VIA EDGAR

United States Securities and Exchange Commission

Re: Lithium Americas Corp. (the “Company”)

Annual Report on Form 40-F of the Company for the year ended December 31, 2017 (the “Form 40-F”)

I, Rene LeBlanc, hereby consent to the use of my name in connection with reference to my involvement in the preparation of the following technical report (the “Technical Report”):

• Technical Report titled “Updated Feasibility Study, Reserve Estimation and Lithium Carbonate Production at the Cauchari-Olaroz Salars, Jujuy Province, Argentina”, dated January 15, 2018, effective March 29, 2017.

and to references to the Technical Report, or portions thereof, in the Form 40-F, which is being filed pursuant to the Securities Exchange Act of 1934, as amended, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the Form 40-F. This consent extends to any amendments to the Form 40-F.

I also hereby consent to the use of my name in connection with reference to my involvement in the preparation of the Technical Report, to references to the Technical Report, or portions thereof, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the registration statement (No. 333-222595) on Form F-10. This consent extends to any amendments to the Form F-10, including post-effective amendments.

/s/ Rene LeBlanc

Rene LeBlanc

EX-99.18

Exhibit 99.18

CONSENT OF TIMOTHY J. CAREW

March 28, 2018

VIA EDGAR

United States Securities and Exchange Commission

Re: Lithium Americas Corp. (the “Company”)

Annual Report on Form 40-F of the Company for the year ended December 31, 2017 (the “Form 40-F”)

I, Timothy J. Carew, hereby consent to the use of my name in connection with reference to my involvement in the preparation of the following technical report (the “Technical Report”):

• Technical Report titled “Independent Technical Report for the Lithium Nevada Property, Nevada, USA”, dated June 2, 2016, effective May 31, 2016, as amended on December 15, 2017.

and to references to the Technical Report, or portions thereof, in the Form 40-F, which is being filed pursuant to the Securities Exchange Act of 1934, as amended, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the Form 40-F. This consent extends to any amendments to the Form 40-F.

I also hereby consent to the use of my name in connection with reference to my involvement in the preparation of the Technical Report, to references to the Technical Report, or portions thereof, and to the inclusion or incorporation by reference of the information derived from the Technical Report related to me in the registration statement (No. 333-222595) on Form F-10. This consent extends to any amendments to the Form F-10, including post-effective amendments.

/s/ Timothy J. Carew

Timothy J. Carew

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Document and Entity Information	12 Months Ended
	Dec. 31, 2017 shares
Document And Entity Information [Abstract]
Document Type	40-F
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Trading Symbol	LAC
Entity Registrant Name	LITHIUM AMERICAS CORP.
Entity Central Index Key	0001440972
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	88,479,107

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Consolidated Statements of Financial Position - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
CURRENT ASSETS
Cash and cash equivalents	$ 55,394	$ 8,056
Restricted cash	833	833
Receivables, prepaids and deposits	1,017	979
Deferred financing costs	1,888
Organoclay inventories	2,086	531
Total current assets	61,218	10,399
NON-CURRENT ASSETS
Restricted cash	983	1,817
Loans to Joint Venture	11,479
Investment in Joint Venture	19,637	13,136
Property, plant and equipment	18,070	18,502
Exploration and evaluation assets	2,104	1,447
Total non-current assets	52,273	34,902
TOTAL ASSETS	113,491	45,301
CURRENT LIABILITIES
Accounts payable and accrued liabilities	3,546	1,637
Current portion of long-term borrowings	178	169
Total current liabilities	3,724	1,806
LONG-TERM LIABILITIES
Long-term borrowings	751	902
Decommissioning provision	249	170
Total long-term liabilities	1,000	1,072
TOTAL LIABILITIES	4,724	2,878
SHAREHOLDERS’ EQUITY
Share capital	197,390	108,670
Contributed surplus	20,812	11,948
Accumulated other comprehensive loss	(114)	(2,124)
Deficit	(109,321)	(76,071)
TOTAL SHAREHOLDERS’ EQUITY	108,767	42,423
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	$ 113,491	$ 45,301

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Consolidated Statements of Financial Position (Parenthetical) (Details) $ in Millions	Dec. 31, 2017 USD ($)
Ganfeng and Bangchak Investment Agreements
Statements [Line Items]
Undrawn line of credit	$ 205

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Consolidated Statements of Comprehensive Loss (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
ORGANOCLAY SALES	$ 4,290	$ 1,154
COST OF SALES
Production costs	(4,565)	(1,497)
Inventories write down	(774)	(648)
Depreciation	(764)	(476)
Total cost of sales	(6,103)	(2,621)
GROSS LOSS	(1,813)	(1,467)
EXPENSES
Exploration expenditures	(4,339)	(3,448)
Organoclay research and development	(423)	(536)
General and administrative	(7,296)	(6,448)
Share of loss in Joint Venture	(4,850)	(3,987)
Stock-based compensation	(11,412)	(3,193)
Total expenses	(28,320)	(17,612)
OTHER ITEMS
Foreign exchange (loss)/gain	(3,759)	351
Convertible security accretion		(806)
Loss on sale of 50% interest in Minera Exar		(9,015)
Other income	642	825
Total other items	(3,117)	(8,645)
NET LOSS	(33,250)	(27,724)
OTHER COMPREHENSIVE LOSS ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO NET LOSS
Reclassification of cumulative translation adjustment on sale of 50% interest in Minera Exar		15,098
Unrealized gain/(loss) on translation to reporting currency	2,010	(16,319)
Other comprehensive income (loss) that may be reclassified subsequently to net loss	2,010	(1,221)
TOTAL COMPREHENSIVE LOSS	$ (31,240)	$ (28,945)
LOSS PER SHARE - BASIC AND DILUTED	$ (0.44)	$ (0.50)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED	75,979	58,360

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Consolidated Statements of Comprehensive Loss (Parenthetical) (Details)	12 Months Ended
	Dec. 31, 2017
Income Statement [Abstract]
Ownership interest in joint venture	50.00%

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Consolidated Statements of Changes in Equity - USD ($) shares in Thousands, $ in Thousands	Total	Share Capital	Contributed Surplus	Accumulated Other Comprehensive Loss	Deficit
Beginning balance at Sep. 30, 2015	$ 60,915	$ 99,318	$ 10,847	$ (903)	$ (48,347)
Beginning balance, Shares at Sep. 30, 2015		53,297
Shares issued on exercise of stock options	806	$ 2,106	(1,300)
Shares issued on exercise of stock options, shares		1,226
Shares issued on exercise of warrants	1,149	$ 1,256	(107)
Shares issued on exercise of warrants, shares		407
Shares issued on conversion of Restricted shares and DSUs	50	$ 757	(707)
Shares issued on conversion of restricted shares and DSUs, shares		382
Deferred share units and Restricted shares issued in lieu of salaries and directors fees	22		22
Shares issued for equity financing	3,500	$ 3,500
Shares issued for equity financing, shares		3,453
Share issuance costs	(191)	$ (191)
Shares issued for convertible security	1,924	$ 1,924
Shares issued for convertible security, shares		1,608
Stock-based compensation	3,193		3,193
Net loss	(27,724)				(27,724)
Other comprehensive income (loss)	(1,221)			(1,221)
Ending balance at Dec. 31, 2016	42,423	$ 108,670	11,948	(2,124)	(76,071)
Ending balance, Shares at Dec. 31, 2016		60,373
Shares issued on exercise of stock options	812	$ 1,862	(1,050)
Shares issued on exercise of stock options, shares		857
Shares issued on exercise of warrants	5,540	$ 5,871	(331)
Shares issued on exercise of warrants, shares		1,687
Shares issued on conversion of Restricted shares and DSUs		$ 1,743	(1,743)
Shares issued on conversion of restricted shares and DSUs, shares		562
Deferred share units and Restricted shares issued in lieu of salaries and directors fees	371		371
Shares issued for equity financing	80,999	$ 80,999
Shares issued for equity financing, shares		25,000
Share issuance costs	(1,755)	$ (1,755)
Stock-based compensation	11,617		11,617
Net loss	(33,250)				(33,250)
Other comprehensive income (loss)	2,010			2,010
Ending balance at Dec. 31, 2017	$ 108,767	$ 197,390	$ 20,812	$ (114)	$ (109,321)
Ending balance, Shares at Dec. 31, 2017		88,479

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Consolidated Statements of Changes in Equity (Parenthetical)	Nov. 08, 2017 shares
Statement Of Changes In Equity [Abstract]
Share consolidation, number of outstanding common shares for each new common share	5

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Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
OPERATING ACTIVITIES
Net loss	$ (33,250)	$ (27,724)
Items not affecting cash:
Stock-based compensation	11,566	3,193
Depreciation	939	894
Foreign exchange loss/(gain)	3,759	(351)
Share of loss in Joint Venture	4,850	3,987
Convertible security accretion		806
Loss on sale of 50% interest in Minera Exar		8,374
Inventories write down	774	648
Other expense/(income)	291	(627)
Changes in non-cash working capital items:
(Increase)/decrease in receivables, prepaids and deposits and deferred financing costs	(596)	40
(Increase)/decrease in inventories	(2,092)	88
Increase/(decrease) in accounts payable and accrued liabilities	845	(640)
Net cash used in operating activities	(12,914)	(11,312)
INVESTING ACTIVITIES
Loans to Joint Venture (Note 5)	(11,000)
Equity investment in Joint Venture (Note 5)	(13,700)
Additions to exploration and evaluation assets	(626)	(991)
Cash received from Joint Venture, net		14,661
Restricted cash	834	(2,500)
Additions to property, plant and equipment (Note 6)	(1,059)	(640)
Net cash (used in)/provided by investing activities	(25,551)	10,530
FINANCING ACTIVITIES
Proceeds from stock options exercises	812	806
Proceeds from warrants exercises	5,540	1,149
Repayment of convertible security funding		(1,653)
Net proceeds from equity financing (Note 9)	79,244	3,482
Finance lease repayments	(46)	(52)
Repayment of long-term borrowing	(125)	(147)
Net cash provided by financing activities	85,425	3,585
EFFECT OF FOREIGN EXCHANGE ON CASH	378	(299)
CHANGE IN CASH AND CASH EQUIVALENTS	47,338	2,504
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	8,056	5,552
CASH AND CASH EQUIVALENTS - END OF PERIOD	$ 55,394	$ 8,056

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Consolidated Statements of Cash Flows (Parenthetical) (Details)	12 Months Ended
	Dec. 31, 2017
Statement Of Cash Flows [Abstract]
Ownership interest in joint venture	50.00%

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Nature of Operations

12 Months Ended

Dec. 31, 2017

Nature Of Operations [Abstract]

Nature of Operations

1. NATURE OF OPERATIONS

Lithium Americas Corp. (“Lithium Americas” or the “Company”) is a Canadian based resource company focused on advancing two significant lithium projects, the Cauchari-Olaroz project, located in Jujuy province of Argentina, and the Lithium Nevada project (formerly the Kings Valley project), located in north-western Nevada, USA, and on the manufacturing and sales of organoclay products.

The Company’s organoclay plant located in Fernley, Nevada, USA manufactures specialty organoclay products, derived from clays, for sale to the oil and gas and other sectors.

The Company’s common shares are listed on the Toronto Stock Exchange and, subsequent to the year end, became listed on the New York Stock Exchange under the symbol "LAC".

The Company’s head office and principal address is Suite 1150-355 Burrard Street, Vancouver, British Columbia, Canada, V6C 2G8. Effective August 11, 2017 the Company’s registered and records office is 2200-885 West Georgia Street, Vancouver, British Columbia, Canada, V6C 3E8.

To date, the Company has not generated significant revenues from operations and has relied on equity and other financings to fund operations. The underlying values of exploration and evaluation assets and investment in joint venture are dependent on the existence of economically recoverable reserves, securing and maintaining title and beneficial interest in the properties, the ability of the Company to obtain the necessary financing to complete permitting, development, and to attain future profitable operations.  

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Basis of Preparation and Presentation

12 Months Ended

Dec. 31, 2017

Basis Of Preparation And Presentation [Abstract]

Basis of Preparation and Presentation

2. BASIS OF PREPARATION AND PRESENTATION

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These consolidated financial statements were approved for issuance by the Board of Directors on March 28, 2018.

These consolidated financial statements are expressed in US dollars, the Company’s presentation currency, and have been prepared on a historical cost basis. The accounting policies set out in Note 3 have been applied consistently to all years presented in these consolidated financial statements.

As authorized by its shareholders, the Company implemented a consolidation of its outstanding common shares effective from November 8, 2017 on the basis of one new common share for every five outstanding common shares. The share consolidation affected all issued and outstanding common shares, options and warrants. All information relating to basic and diluted earnings per share, issued and outstanding common shares, share options (note 9), restricted share units (note 9), deferred share units (note 9) and warrants (note 9), and per share amounts in these consolidated financial statements have been adjusted retrospectively to reflect the share consolidation.

The Company changed its fiscal year end from September 30 to December 31, effective 2016, so the comparative period is the fifteen-month period from October 1, 2015 to December 31, 2016. The Company changed its year end in order to align it with the Joint Venture (as defined in Note 5) for reporting and planning purposes as well as to bring its financial reporting timetable in line with the other companies in the industry.

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Disclosure Of Significant Accounting Policies [Abstract]

Significant Accounting Policies

3. SIGNIFICANT ACCOUNTING POLICIES

Critical Accounting Estimates and Judgements

The preparation of these financial statements in conformity with IFRS requires judgments, estimates, and assumptions that affect the amounts reported.  Those estimates and assumptions concerning the future may differ from actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The following are the estimates, assumptions and areas of judgment applied by management that most significantly affect the Company’s financial statements:

Commercial viability and technical feasibility of the Cauchari-Olaroz project

The application of the Company’s accounting policy for exploration and evaluation assets requires judgement in assessing when the commercial viability and technical feasibility of the Cauchari-Olaroz project has been determined, at which point the asset is reclassified to property, plant and equipment.  In the judgement of the Company, the commercial viability and technical feasibility of the Cauchari-Olaroz project has been demonstrated effective July 1, 2017.

Impairment of exploration and evaluation assets

The application of the Company’s accounting policy for impairment of exploration and evaluation assets requires judgment to determine whether indicators of impairment exist including information such as, the period for which the Company has the right to explore including expected renewals, whether substantive expenditures on further exploration and evaluation of resource properties are budgeted and evaluation of the results of exploration and evaluation activities up to the reporting date. Management has performed an impairment indicators assessment on the Company’s exploration and evaluation assets and has concluded that no impairment indicators exist as of December 31, 2017.

Impairment of other long lived assets

The application of the Company’s accounting policy for impairment of its investment in joint venture and property, plant and equipment requires judgment to determine whether indicators of impairment exist. The review of impairment indicators includes consideration of both external and internal sources of information, including factors such as market and economic conditions, taxation, prices and forecasts, capital expenditure requirements, future operating costs and production volumes. Management has assessed impairment indicators on the Company’s investment in joint venture and property, plant and equipment and has concluded that no impairment indicators exist as of December 31, 2017.

Principles of Consolidation

The consolidated financial statements contained herein include the accounts of Lithium Americas Corp. and its wholly-owned USA subsidiaries Lithium Nevada Corp., KV Project LLC, and RheoMinerals Inc., and Canadian wholly-owned subsidiary 2265866 Ontario Inc. All inter-company transactions and balances have been eliminated.

Subsidiaries are all entities over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

3.SIGNIFICANT ACCOUNTING POLICIES (continued)

Investments in Joint Arrangements

A joint arrangement is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. Joint control is the contractually agreed sharing of control such that significant operating and financial decisions require the unanimous consent of the parties sharing control. The Company’s arrangement with respect to Cauchari-Olaroz project is classified as a joint venture and is accounted for using the equity method. The equity method involves recording the initial investment at cost. When a joint venture is formed from a previous investment in a subsidiary, the Company made a policy choice decision to recognize a gain or loss on change of control in relation to the portion of the investment no longer owned based upon the carrying value of the assets.  Additional funding into an investee is recorded as an increase in the carrying value of the investment. The carrying amount is adjusted by the Company’s share of a joint venture’s net income or loss, depreciation, amortization or impairment and foreign currency differences arising on translation from functional to the presentation currency. When the Company’s share of losses of a joint venture exceeds the Company’s carrying value of the investment, the Company discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the joint venture.

Foreign Currency Translation

Functional and Presentation Currency

Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency).  The consolidated financial statements are presented in US dollars. The functional currency of all subsidiaries in the Company’s group other than Lithium Americas Corporation is the US dollar, while the functional currency of Lithium Americas Corporation is the Canadian dollar. The functional currency of the Company’s Joint Venture is the Argentinian Peso.

Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss. They are deferred in equity if they are attributable to part of the net investment in a foreign operation. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.  

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognized in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equities classified as available-for-sale financial assets are recognized in other comprehensive income.

3.SIGNIFICANT ACCOUNTING POLICIES (continued)

Parent and Subsidiary Companies

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each reporting date are translated at the closing rate at that reporting date;

• income and expenses are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and

• all resulting exchange differences are recognized in other comprehensive loss.

The Company recognizes its share of the exchange differences of its joint ventures which result from translation of the results and financial position of its foreign joint ventures from the functional to the presentation currency.  

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from the item are considered to form part of the net investment in a foreign operation and are recognized in other comprehensive income.

When an entity disposes of its entire interest in a foreign operation, or loses control, joint control, or significant influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive income related to the foreign operation are recognized in profit or loss. If an entity disposes of part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in other comprehensive income related to the subsidiary is reallocated between controlling and non-controlling interests.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash held with banks and highly liquid short-term investments in high interest saving accounts which can be withdrawn at any time, which is subject to an insignificant risk of changes in value.

Exploration and Evaluation Assets

Exploration expenditures not including the acquisition costs and claim maintenance costs are expensed as incurred until an economic feasibility study has established the presence of proven and probable reserves and development of the project has commenced, at which time exploration and development expenditures incurred on the property thereafter are capitalized. The establishment of technical feasibility and commercial viability of a mineral property is assessed based on a combination of factors, including:

• The extent to which mineral reserves or mineral resources as defined in National Instrument 43-101 (“NI 43-101”) have been identified through a feasibility study or similar document;

• The status of environmental permits; and

• The status of mining leases or permits.

Costs incurred relating to the acquisition and claim maintenance of mineral properties, including option payments and annual fees to maintain the property in good standing, are capitalized and deferred by property until the project to which they relate is sold, abandoned, impaired or placed into production.  After recognition, the Company uses the cost model for exploration and evaluation assets.

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company assesses its capitalized mineral property costs for indications of impairment on each balance sheet date and when events and circumstances indicate a risk of impairment.  A property is written down or written off when the Company determines that an impairment of value has occurred or when exploration results indicate that no further work is warranted. Exploration and evaluation assets are tested for impairment immediately prior to reclassification to mineral property development costs.

Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title.  Such properties may be subject to prior agreements or transfers, or title may be affected by undetected defects.

Property, Plant and Equipment

On initial recognition, property, plant and equipment are valued at cost. Cost includes the purchase price and directly attributable cost of acquisition or construction required to bring the asset to the location and condition necessary to be capable of operating in the manner intended by the Company, including appropriate borrowing costs.  During the development and commissioning phase, pre-production expenditures, net of incidental proceeds from sales during this period, are capitalized to the asset under construction and equipment.  Capitalization of costs incurred ceases when commercial production commences in the manner intended by management.  The Company applies judgment in its assessment of when the asset is capable of operating in the manner intended by management.

Property, plant and equipment are subsequently measured at cost less accumulated depreciation, less any accumulated impairment losses, with the exception of land which is not depreciated.  When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items or major components.

Property, plant and equipment that are currently in use are depreciated as follows:

• Organoclay plant – straight-line basis over the estimated useful life of 20 years;

• Buildings – straight-line basis over the estimated useful life of 20 years;

• Organoclay plant equipment included in “Equipment and machinery” – straight line basis over the estimated life of 5-20 years;

• Lithium demo plant equipment included in “Equipment and machinery” – straight-line basis over the estimated useful life of 10 years;

• Office equipment included in “Other” – declining balance method at 20% annual rate; and

• Other equipment included in “Other” – straight-line basis over the estimated useful life of 7-15 years.

The assets’ residual values, useful lives and depreciation methods are reviewed and adjusted, if appropriate, at each financial year-end.  The gain or loss arising on the disposal of an item of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in profit and loss.

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of Property, Plant and Equipment

Property, plant and equipment are assessed for impairment indicators at each reporting date or when an impairment indicator arises if not at a reporting date.  Impairment indicators are evaluated and, if considered necessary, an impairment assessment is carried out.  If an impairment loss is identified, it is recognized for the amount by which the asset’s carrying amount exceeds it recoverable amount.  The recoverable amount is the higher of an asset’s fair value less cost of disposal and value in use.  

Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.  For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).  These are typically individual mines, plants or development projects.  

Where the factors which resulted in an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years.  A reversal of an impairment loss is recognized immediately in profit or loss.

Leased Assets

Finance leases, which transfer to the Company substantially all the risks and rewards incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments.  The corresponding lease commitment is shown as a liability.  Lease payments are apportioned between capital and interest. Interest charges are capitalized to asset under construction during the development and commissioning phase. The capital element reduces the balance owed to the lessor.

Inventories

Organoclay products, in-process and stockpile inventories are recorded at the lower of average cost and net realizable value. The cost of finished goods and work-in-progress is determined by the weighted average cost method and comprises raw materials, direct labour, and other direct costs, as well as related production overheads including applicable depreciation on property, plant and equipment.  Net realizable value is the estimated selling price less applicable selling expenses.  When inventories have been written down to net realizable value, a new assessment of net realizable value is made in each subsequent period.  When the circumstances that caused the write down no longer exist, the amount of the write down is reversed.  

Materials and supplies inventories are valued at the lower of average cost and net realizable value.  Cost includes acquisition, freight and other directly attributable costs.

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial Instruments

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.  Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

All of the Company’s financial instruments are classified into one of the following categories: loans and receivables or other financial liabilities.  All financial instruments are measured in the statement of financial position at fair value initially.  Loans and receivables and other financial liabilities are subsequently measured at amortized cost.  

The Company does not use derivative instruments or hedges to manage risks.

Cash and receivables and short-term restricted cash have been designated as loans and receivables and are included in current assets due to their short-term nature. Loans to the Joint Venture and long-term restricted cash have been designated as loans and receivables and are included in non-current assets due to their long-term nature. The Company’s other financial liabilities include accounts payable and accrued liabilities, long-term borrowing, convertible security, and obligation under finance leases.

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of assets requiring a substantial period of time to get ready for their intended use or sale are capitalized as part of the cost of that asset. Capitalization of borrowing costs begin when there are borrowings and activities commence to prepare an asset for its intended use. Capitalization of borrowing costs ends when substantially all activity necessary to prepare a qualifying asset for its intended use are complete. When proceeds of project specific borrowings are invested on a temporary basis, borrowing costs are capitalized net of any investment income.  

Provisions

Provisions are recognized when the Company has a present obligation, legal or constructive, as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.  Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Close down and restoration costs include dismantling and demolition of infrastructure and the removal of residual materials and remediation of disturbed areas.  Estimated close down and restoration costs are provided for in the accounting period when the obligation arising from the related disturbance occurs, based on the net present value of estimated future costs.  The cost estimates are updated during the life of the operation to reflect known development, such as revisions to cost estimates and to the estimated lives of the operations, and are subject to formal reviews at regular intervals.  The initial closure provision together with changes resulting from changes in estimated cash flows or discount rates are capitalized within capital assets.  These costs are then depreciated over the lives of the asset to which they relate, typically using the units of production method.  The amortization or unwinding of the discount applied in establishing the net present value of provisions is charged to the statement of comprehensive (loss)/income as a financing cost.  Provision is made for the estimated present value of the costs of environmental cleanup obligations outstanding at the statement of financial position date

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

Income tax expense comprises current and deferred tax.  Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity.  Current tax expense is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at period-end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is recorded using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.  Temporary differences are not provided for the initial recognition of assets or liabilities that affect neither accounting or taxable loss, nor differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.  The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.  To the extent that the Company does not consider it probable that a deferred tax asset will be recovered, the deferred tax asset is not recorded.

Share Capital

Common shares are classified as equity.  Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity.

Revenue

Organoclay products revenue is recognized when it is probable that the economic benefits will flow to the Company, risks and rewards of ownership are transferred to the customer, delivery has occurred, the sales price is reasonably determinable, and collectability is reasonably assured.  These criteria are generally met at the time the product is shipped or delivered to the customer and, depending on the delivery conditions, title and risk have passed to the customer and acceptance of the product, when contractually required, has been obtained.  Revenue is measured based on the price specified in the sales contract, net of discounts, at the time of sale.

Earnings/(Loss) per Share

Basic earnings/(loss) per share is computed by dividing net loss attributable to shareholders of the Company by the weighted average number of common shares outstanding during the reporting period. The diluted loss per share calculation is based on the weighted average number of common shares outstanding during the period, plus the effects of dilutive common share equivalents.  This method requires that the dilutive effect of outstanding options and warrants issued should be calculated using the treasury stock method.  This method assumes that all common share equivalents have been exercised at the beginning of the period (or at the time of issuance, if later), and that the funds obtained thereby were used to purchase common shares of the Company at the average trading price of the common shares during the period, but only if dilutive.

Stock-Based Compensation

The Company grants stock options to buy common shares of the Company to directors, officers, employees and service providers.  The fair value of stock options granted by the Company is treated as compensation costs in accordance with IFRS 2, Share-based Payment.  These costs are charged to the statement of comprehensive (loss)/income over the stock option vesting period.  

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Each tranche in an award is considered a separate award with its own vesting period and grant date fair value.  Fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model.  Compensation expense is recognized over the tranche’s vesting period based on the number of awards expected to vest, by increasing contributed surplus.  The number of awards expected to vest is reviewed at least annually with any impact being recognized immediately. Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in the statement of comprehensive (loss)/income, unless they are related to the issuance of shares.  Amounts related to the issuance of shares are recorded as a reduction of share capital.  When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model.  

The Company’s equity incentive plan also allows the grant of restricted shares and deferred share units. The cost of equity-settled payment arrangements is recorded based on the estimated fair value at the grant date and charged to earning over the vesting period.

Organoclay Product Development

Expenditure on research activities related to the obtaining of new scientific or technical knowledge is expensed as incurred.  Expenditure on development activities, whereby the research results or other knowledge is applied to accomplish new or improved products or processes, is recognized as an intangible asset in the statement of financial position, provided the product or process is technically and commercially feasible and the Company has sufficient resources to complete development, and is subsequently able to use or sell the intangible asset.  The carrying amount includes the directly attributable expenditure, such as the cost of materials and services, costs of employee benefits, fees to register intellectual property rights and amortization of patents and licenses.  In the statement of financial position, product development are stated at cost less accumulated amortization and any impairment losses.

Recent Accounting Pronouncements

Accounting standards and amendments issued but not yet adopted

IFRS 9, Financial Instruments (“IFRS 9”), addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in International Accounting Standard (“IAS”) 39 that relates to the classification and measurement of financial instruments.

IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortized cost, fair value through other comprehensive income (“FVOCI”) and fair value through profit and loss (“FVTPL”). There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39.

For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in OCI, for liabilities designated as FVTPL.  The standard is effective for accounting periods beginning on or after January 1, 2018. The Company has determined that adoption of this standard will have no significant impact on the consolidated financial statements.

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

IFRS 15, Revenue from Contracts with Customers (“IFRS 15”), deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.  IFRS 15 was issued in May 2014 by the IASB.  Under IFRS 15, revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service.  The standard replaces IAS 18, Revenue, and IAS 11, Construction Contracts, and related interpretations.  The standard is effective for annual periods beginning on or after January 1, 2018. The Company has determined that adoption of this standard will have no significant impact on the consolidated financial statements.

IFRS 16, Leases (“IFRS 16”), was issued in January 2016 by the IASB.  According to the new standard, all leases will be on the statement of financial position of lessees, except those that meet the limited exception criteria.  The standard is effective for annual periods beginning on or after January 1, 2019.  The Company is currently evaluating the effect the standard will have on its consolidated financial statements.

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Cash and Cash Equivalents

12 Months Ended

Dec. 31, 2017

Cash And Cash Equivalents [Abstract]

Cash and Cash Equivalents

4. CASH AND CASH EQUIVALENTS

	As at December 31,		As at December 31,
	2017 $		2016 $
Cash		6,319		1,449
Short-term bank deposits		49,075		6,607
		55,394		8,056

As at December 31, 2017 $5,898 of cash is held in CAD (December 31, 2016 – 250) and $421 in USD (December 31, 2016 – 1,199) and earn interest between 0.25-1.5%. Short-term bank deposits are held in USD and earn interest between 1-2%.

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Joint Venture

12 Months Ended

Dec. 31, 2017

Disclosure Of Joint Ventures [Abstract]

Joint Venture

5. JOINT VENTURE

On March 28, 2016, the Company entered into an agreement with SQM to form a 50/50 joint venture on the Cauchari-Olaroz project in Jujuy, Argentina (“Joint Venture”).

The Joint Venture is governed by a Shareholders Agreement which provides for (i) equal representation by the Company and SQM on its Shareholders’ Committee, (ii) unanimous approval by the Company and SQM on budgets and timing of expenditures, (iii) the right to purchase a 50% share of production and (iv) buyout and termination provisions in the event that SQM chooses not to proceed with the project.

In May 2016, SQM and the Company also entered into an Escrow Agreement requiring the Company to deposit $2,500 of the $15,000 contribution (the “Escrow Amount”) into an escrow account.  Subject to certain provisions, the Escrow Amount will be released to the Company over three years as follows: $833 was received in April 2017, $833 will be released on March 28, 2018, and $833 will be released on March 28, 2019.  The Escrow Amount can be used to pay certain contingent liabilities of Minera Exar, if any arise, related to the actions prior to the Joint Venture formation.  The Company has also provided a guarantee for up to $354 in transaction related costs in the event that such costs arise in the future. Effective July 1, 2017, the Joint Venture’s Cauchari-Olaroz project entered the development phase.  Accordingly, all costs directly attributable to the project are capitalized.

5. JOINT VENTURE (continued)

Investment in Joint Venture

The changes in investment in the Joint Venture since initial contribution are as follows:

Initial contribution to Joint Venture – March 28, 2016	$
50% of net asset value of Minera Exar		13,276
50% of contribution for Joint Venture project development		5,000
Total initial contribution		18,276
Share of loss of Joint Venture		(3,987	)
Translation adjustment		(1,153	)
Investment in Joint Venture – December 31, 2016		13,136
Share of loss of Joint Venture		(4,850	)
Translation adjustment		(2,127	)
Contribution to Joint Venture by LAC		13,717
Elimination of unrealized gains on intercompany transactions		(239	)
Investment in Joint Venture – December 31, 2017		19,637

In October 2017, the Company made an irrevocable capital contribution, proportionate to its 50% interest in the Joint Venture, for future capital increases in Minera Exar in an amount of $13,300 to develop, explore, and operate the Cauchari-Olaroz project.

The following amounts represent the amounts presented in the financial statements of Minera Exar. They have been amended to reflect modifications for differences in accounting policies.

	December 31, 2017			December 31, 2016
	$			$
Current assets
Cash and cash equivalents		9,198			3,119
Other current assets		2,410			1,281
Total current assets		11,608			4,400
Non-current assets		66,821			28,261
Current liabilities		(13,189	)		(6,268	)
Non-current liabilities		(26,323	)		(121	)
Net assets		38,917			26,272

Summarized statement of loss from operations	For the year ended December 31, 2017		For the period March 28, 2016 - December 31, 2016
	$		$
Exploration expenditures		8,898		8,060
Depreciation		213		24
Other expenses/(income)		589		(108	)
Loss from continuing operations		9,700		7,976

Loans to Joint Venture

During the year ended December 31, 2017, the Company entered into two loan agreements and advanced $11,000 to Minera Exar. The rate of interest on the first loan with a principal amount of $5,000 is 12-month LIBOR plus 3% and is calculated on the basis of a 360-day year. The maturity date of the first loan is two years following the drawdown date. The rate of interest on the second loan with a principal amount of $6,000 is 12-month LIBOR plus 10% and is calculated on the basis of a 360-day year. The maturity date of the second loan is fifteen years following the drawdown date. The interest on both loans is accrued on a non–compounding basis. The proceeds from the loans were used by Minera Exar for mining exploration or mining construction and development purposes.

5. JOINT VENTURE (continued)

Joint Venture Commitments and Contingencies

As at December 31, 2017, the Company’s 50% portion of the Joint Venture’s commitments and contingencies are as follows:

• Annual royalty of $100 due in May of every year and expiring in 2041;

• Aboriginal programs agreements with six communities located in the Cauchari-Olaroz project area have terms from five to thirty years.  The annual fees due are $88 between 2017 and 2021 and $131 between 2021 and 2059, assuming that these payments will be extended for the life of the project.  These payments will be incurred only if the Joint Venture starts production.

Los Boros Option Agreement

On March 28, 2016, the Joint Venture entered into a purchase option agreement (“Option Agreement”) with Grupo Minero Los Boros (“Los Boros”) for the transfer of title to the Joint Venture for certain mining properties that comprised a portion of the Cauchari-Olaroz project.  Under the terms of the Option Agreement, the Joint Venture paid $100 (the Company’s portion was $50) upon signing and has a right to exercise the purchase option at any time within 30 months for the total consideration of $12,000 (the Company’s portion is $6,000) to be paid in sixty quarterly instalments of $200 (the Company’s portion is $100).  The first installment becomes due upon occurrence of one of the following two conditions, whichever comes first: third year of the purchase option exercise date or the beginning of commercial exploitation with a minimum production of 20,000 tons of lithium carbonate equivalent. As a security for the transfer of title for the mining properties under the Option Agreement, Los Boros granted to the Joint Venture a mortgage for $12,000.  

If the Joint Venture exercises the purchase option, the following royalties will have to be paid to Los Boros:

• $300 (the Company’s portion is $150) within 10 days of the commercial plant construction start date; and

• 3% net profit interest (the Company’s portion is 1.5%) for 40 years, payable in pesos, annually within the 10 business days after calendar year end.

The Joint Venture can cancel the first 20 years of net profit interest in exchange for a one-time payment of $7,000 (the Company’s portion is $3,500) and the next 20 years for additional $7,000 (the Company’s portion is $3,500).  

JEMSE Arrangement

During 2012 Minera Exar granted a conditional right to Jujuy Energia y Mineria Sociedad del Estado (“JEMSE”), a mining investment company owned by the government of Jujuy Province in Argentina, to acquire an 8.5% equity interest in Minera Exar for one US dollar and provide management services as required to develop the project.  

Ifthe conditions are met and it exercises its right, JEMSE will be required to provide its pro rata (8.5%) share of the financing requirements for the construction of the Cauchari-Olaroz project.  These funds will be loaned to JEMSE by the shareholders of Minera Exar and will be repayable out of one‑third of the dividends to be received by JEMSE over future years from the project. The distribution of dividends to JEMSE and other shareholders in the project will only commence once all annual commitments related to the project debt have been met.

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Property Plant and Equipment

12 Months Ended

Dec. 31, 2017

Disclosure Of Property Plant And Equipment [Abstract]

Property Plant and Equipment

6. PROPERTY, PLANT AND EQUIPMENT

	Land		Buildings		Equipment and machinery			Organoclay plant		Other			Total
	$		$		$			$		$			$
Cost
As at September 30, 2015		371		1,957		5,068			11,149		356			18,901
Additions		15		184		88			346		70			703
Disposition		-		-		-			-		(29	)		(29	)
Contribution to Joint Venture		-		-		-			-		(12	)		(12	)
Foreign exchange		-		-		-			-		(3	)		(3	)
As at December 31, 2016		386		2,141		5,156			11,495		382			19,560
Additions		-		2		805			-		254			1,061
Write down		-		-		(399	)		-		-			(399	)
As at December 31, 2017		386		2,143		5,562			11,495		636			20,222

	Land		Buildings		Equipment and machinery			Organoclay plant		Other			Total
	$		$		$			$		$			$
Accumulated depreciation
As at September 30, 2015		-		-		112			-		76			188
Depreciation for the year		-		76		335			431		52			894
Disposition		-		-		-			-		(20	)		(20	)
Contribution to Joint Venture		-		-		-			-		(4	)		(4	)
As at December 31, 2016		-		76		447			431		104			1,058
Depreciation for the year		-		107		366			575		76			1,124
Disposition		-		-		(30	)		-		-			(30	)
As at December 31, 2017		-		183		783			1,006		180			2,152

	Land		Buildings		Equipment and machinery		Organoclay plant		Other		Total
	$		$		$		$		$		$
Net book value
As at December 31, 2016		386		2,065		4,709		11,064		278		18,502
As at December 31, 2017		386		1,960		4,779		10,489		456		18,070

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Exploration and Evaluation Assets

12 Months Ended

Dec. 31, 2017

Exploration And Evaluation Assets [Abstract]

Exploration and Evaluation Assets

7. EXPLORATION AND EVALUATION ASSETS

	December 31, 2017
	Lithium Nevada
	$
Acquisition costs
Balance, beginning		1,447
Additions		706
Write offs		(49	)
Total exploration and evaluation assets		2,104

7. EXPLORATION AND EVALUATION ASSETS (continued)

	December 31, 2016
	Lithium Nevada $		Cauchari- Olaroz $			Total $
Acquisition costs
Balance, beginning		958		41,665			42,623
Additions		489		71			560
Change in foreign exchange rate		-		(14,874	)		(14,874	)
Sale of 50% of net assets		-		(13,431	)		(13,431	)
Contribution to Joint Venture		-		(13,431	)		(13,431	)
Total exploration and evaluation assets		1,447		-			1,447

The Company has the following future payments and royalties on Lithium Nevada project. These payments will only be incurred if the Company continues to hold the subject claims in the future and the royalties will only be incurred if the Company starts production from the Lithium Nevada project.  

• $50 annual advance net smelter return royalty payment due on January 21 on certain mining claims.  The Company’s interest in these claims is subject to a 3% net smelter return royalty;

• $2 per year in advance net smelter return royalty payments due on November 15 on four mining claims.  The Company’s interest in these claims is subject to a 1.5% net smelter return royalty;

• 20% royalty on revenue solely in respect of uranium;

• 8% gross revenue royalty on all claims up to a cumulative payment of $22,000.  The royalty will then be reduced to 4% for the life of the project.  The Company has the option at any time to reduce the royalty to 1.75% upon payment of $22,000.

The Company has future royalties from sales of organoclay products manufactured at the facility in Saudi Arabia owned by Delmon Co Ltd. and receivable pursuant to its “Technical Assistance and Royalty Agreement”. The agreement was entered into on November 17, 2016 and includes a 12.5% net profit royalty payable for 7 years from the manufacturing completion date (as defined in the abovementioned agreement) and a 3% gross profit royalty on new products payable for 7 years from the date of sale of any new product.

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Long Term Borrowing

12 Months Ended

Dec. 31, 2017

Borrowings [Abstract]

Long -Term Borrowing

8. LONG-TERM BORROWING

	As at December 31,		As at December 31,
	2017 $		2016 $
Current portion of long-term borrowings
Promissory note		130		125
Obligation under finance leases		48		44
		178		169
Long-term borrowings
Promissory note		703		833
Obligation under finance leases		48		69
		751		902
		929		1,071

Promissory Note

In July 2013, the Company purchased an industrial complex in the City of Fernley, Nevada to be the production site for its organoclay plant.  

8. LONG-TERM BORROWING (continued)

The property was purchased for $1,575, of which $236 was paid at the close of the transaction, and the remaining balance of $1,339 was financed by the seller with a ten-year promissory note payable in monthly instalments.  The promissory note bears 5.25% annual interest for the first five years, and then at a reset interest rate of between 5.5% to 7.5% for the final five years, depending on the prime rate at the time of reset.  Security provided for the promissory note includes a mortgage charge against the purchased property.

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Issued Capital, Equity Compensation and Warrants

12 Months Ended

Dec. 31, 2017

Disclosure Of Terms And Conditions Of Sharebased Payment Arrangement [Abstract]

Issued Capital, Equity Compensation and Warrants

9. ISSUED CAPITAL, EQUITY COMPENSATION, AND WARRANTS

Ganfeng and Bangchak Investment Agreements

During the year ended December 31, 2017, the Company completed the closing of the investment agreement (the “Ganfeng Investment Agreement”) with GFL International Co., Ltd. (“Ganfeng”) and the investment agreement (the “Bangchak Investment Agreement”) with The Bangchak Petroleum Public Company Limited (“Bangchak”) through its wholly-owned subsidiary, BCP Innovation Pte Ltd (“BCPI”) for funding to advance the construction of the Cauchari-Olaroz lithium project in Jujuy, Argentina. Pursuant to these agreements, each of Ganfeng and Bangchak agreed to co-invest in the Company through a mixture of equity subscriptions and debt financing.

The investment agreements consisted of four key components:

• An equity financing by each of Ganfeng and Bangchak.  Ganfeng subscribed for 15,000 common shares while BCP subscribed for 10,000 common shares at a price of CDN$4.25 per common share, for gross proceeds of approximately CDN$106,000 ($80,999).

• A $205,000 credit facility.  Under this agreement, each of Ganfeng and Bangchak have committed to advance $125,000 and $80,000 respectively, with proceeds to be used to fund the Company’s share of project development contributions for Stage 1 of the Cauchari-Olaroz project.  As of December 31, 2017, the Company has not drawn down on this credit facility.

• Off-take entitlements in favour of Ganfeng and Bangchak for the purchase of up to 80% and 20% respectively, of the Company’s share of Cauchari-Olaroz Project Stage 1 lithium carbonate production at market prices. The off-take agreements each have a term of 20 years following commencement of commercial production.

• Investor Rights Agreement.  The Company entered into an Investor Rights Agreement with each of Ganfeng and Bangchak.  Pursuant to these agreements, Ganfeng and Bangchak each have the right to nominate one individual to the board of directors of the Company so long as they maintain a 15% or more interest in the Company’s issued share capital.  Each of Ganfeng and Bangchak have a participation right in connection with future financings to maintain a 17.5% interest and 16.4% interest respectively, so long as they maintain a 15% or more interest in the Company’s issued share capital. 

The parties settled relevant agreements and satisfied all conditions over the course of the first half of 2017, and on July 14, 2017 completed the remaining equity subscriptions and entered into definitive agreements. The Company provided corporate guarantees, to both lenders, Bangchak and Ganfeng, in connection with the debt facility.

Financing costs of $1,755, related to the equity portion of the Ganfeng and Bangchak financings, were recorded as share issuance costs. Financing costs of $1,888, related to the debt portion of the Ganfeng and Bangchak financings, are deferred and included in receivables, prepaids, and deposits and will be amortized over the terms of the loans. $1,361 of these costs are included in accounts payable and accrued liabilities on December 31, 2017.

9. ISSUED CAPITAL, EQUITY COMPENSATION, AND WARRANTS (continued)

Equity Incentive Plan

The Company has an equity incentive plan (“Plan”) in accordance with the policies of the TSX whereby, from time to time, at the discretion of the Board of Directors, eligible directors, officers, employees and consultants are: (1) granted incentive stock options exercisable to purchase common shares (“Stock Options”); (2) awarded restricted share rights (“RSs”) that convert automatically into common shares upon vesting; and (3) for eligible directors, awarded deferred share units (“DSUs”) which the directors are entitled to redeem for common shares upon retirement or termination from the Board.  Under the Plan, common shares reserved for issuance of Stock Options, RSs and DSUs shall not exceed 10% of the outstanding shares from time to time. The exercise price of each stock option is based on the fair market price of the Company’s common shares at the time of the grant.  The options can be granted for a maximum term of five years.

Restricted Shares

During the year ended December 31, 2017, the Company granted 1,589 RSs to its directors, executive officers, consultants and employees.  The total estimated fair value of the RSs was $7,883 based on the market value of the Company’s shares on the grant date.  The fair value of 27 RSs that were granted in lieu of deferred salaries was recorded as a reduction of accrued liabilities, and the fair value of the remaining 1,562 RSs is being recorded as a share-based payments expense and charged to operating expenses over the vesting period.  

As at December 31, 2017, $748 of the fair value of RSs previously granted but not yet vested remains to be expensed in fiscal 2018, $183 in 2019 and $28 in 2020.

During the year ended December 31, 2017, the fair value of RSs of $6,989 was recorded as a share-based payments expense and charged to operating expenses (fifteen-month period ended December 31, 2015 - $1,682), $89 was charged to cost of sales (fifteen-month period ended December 31, 2015 - nil) and $1 was allocated to inventory (fifteen-month period ended December 31, 2015 - nil).  

A summary of changes to the number of restricted shares is as follows:

	Number of RSs (in 000's)
Balance, RSs September 30, 2015		-
Granted		873
Converted into common shares		(383	)
Balance, RSs December 31, 2016		490
Granted		1,589
Converted into common shares		(521	)
Forfeited		(8	)
Balance, RSs December 31, 2017		1,550

9. ISSUED CAPITAL, EQUITY COMPENSATION, AND WARRANTS (continued)

Equity Incentive Plan (continued)

Deferred Share Units

During the year ended December 31, 2017 the Company granted 73 DSUs with the total estimated fair value of $336 to the Company’s directors in lieu of the directors’ fees payments.

	Number of DSUs (in 000's)
Balance, DSUs September 30, 2015		-
Granted		9
Balance, DSUs December 31, 2016		9
Granted		73
Converted into common shares		(41	)
Balance, DSUs December 31, 2017		41

Stock Options

During the year ended December 31, 2017, the Company granted a total of 3,085 stock options to its directors, officers, and employees.  The fair value of stock options granted are estimated on the dates of grants using the Black-Scholes Option Pricing Model with the following assumptions used for the grants made during the period:

	April 4, 2017			April 4, 2017			May 16, 2017			Sep 14, 2017			Nov 27, 2017			Dec 22, 2017
Number of options granted (‘000’s)		835			200			100			1,860			60			30
Exercise price per share (CDN$)	$	4.90		$	4.90		$	5.00		$	8.05		$	12.34		$	11.07
Risk-free interest rate		0.7	%		0.7	%		0.7	%		1.6	%		1.6	%		1.8	%
Expected life	3			3			3			3			3			3
Annualized volatility		73	%		73	%		72	%		69	%		66	%		73	%
Dividend rate	-			-			-			-			-			-
Fair value per stock option granted (CDN$)	$	2.10		$	2.10		$	2.35		$	3.75		$	5.52		$	5.32
Total fair value of stock options granted (CDN$)	$	1,754		$	420		$	235		$	6,975		$	331		$	160

9. ISSUED CAPITAL, EQUITY COMPENSATION, AND WARRANTS (continued)

Equity Incentive Plan (continued)

Stock Options (continued)

Stock options outstanding and exercisable as at December 31, 2017 are as follows:

	Options Outstanding				Options Exercisable
Range of Exercise Prices CDN$	Number Outstanding as at December 31, 2017 (in 000's)		Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price CDN$	Number Exercisable as at December 31, 2017 (in 000's)		Weighted Average Exercise Price CDN$
$1.35 - $1.50		1,074	1.75	1.44		1,074	1.44
$1.70 - $1.90		327	1.57	1.81		327	1.81
$2.35 - $3.75		820	3.12	2.61		820	2.61
$4.80 - $5.00		1,172	4.19	4.88		624	4.87
$8.05 - $11.05		1,913	4.72	8.23		478	8.23
		5,306	3.56	4.85		3,323	3.39

A summary of changes to stock options outstanding is as follows:

	Number of Options (in 000's)			Weighted Average Exercise Price, (CDN$)
Balance, outstanding September 30, 2015		3,466			2.15
Granted		1,873			2.30
Exercised		(1,602	)		1.75
Expired		(290	)		6.15
Forfeited		(23	)		2.25
Balance, outstanding December 31, 2016		3,424			2.15
Granted		3,085			7.01
Exercised		(1,073	)		2.22
Forfeited		(130	)		5.20
Balance, outstanding December 31, 2017		5,306			4.85

During the year ended December 31, 2017, 608 (fifteen-month period ended December 31, 2016 – 933) options were exercised under the cashless exercise provision of the Company’s stock option plan, resulting in the issuance of 392 (fifteen-month period ended December 31, 2016 – 558) shares of the Company.  

9. ISSUED CAPITAL, EQUITY COMPENSATION, AND WARRANTS (continued)

Equity Incentive Plan (continued)

Stock Options (continued)

Stock-based compensation expense related to stock options of $4,423 (fifteen-month period ended December 31, 2016 - $1,511) was charged to operations $65 was charged to cost of sales (fifteen-month period ended December 31, 2015 - nil) and $50 was allocated to inventory (fifteen-month period ended December 31, 2015 - nil). At December 31, 2017, $3,052 of the fair value of stock options previously granted but not yet vested remains to be expensed in fiscal 2018, and $224 in fiscal 2019.  The weighted-average share price on the date of the stock options exercised was CDN$6.22 (fifteen-month period ended December 31, 2016  – CDN$4.25).

Warrants

A summary of the changes in the number of the Company’s share purchase warrants is as follows:

	Number of Warrants (in ‘000’s)			Weighted Average Exercise Price (CDN$)
Balance, September 30, 2015		3,555			4.05
Exercised		(407	)		3.62
Expired		(1,282	)		3.75
Balance, December 31, 2016		1,867			4.35
Exercised		(1,687	)		4.32
Expired		(180	)		4.49
Balance, December 31, 2017		-		-

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Related Party Transactions

12 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

Related Party Transactions

10. RELATED PARTY TRANSACTIONS

The Company`s 50%-owned joint venture Minera Exar entered in the following transactions with companies controlled by the family of the Company’s director and the President of Minera Exar S.A.:

- Los Boros Option Agreement entered into with Grupo Minero Los Boros(Note 5);

- Construction services contract for Cauchari-Olaroz project with Magna Construcciones S.R.L. for $2,411 (the Company’s portion is $1,206).

In 2017 Minera Exar paid director’s fee of $75 to its President, who is also the director of the Company.

10. RELATED PARTY TRANSACTIONS (continued)

Compensation of Key Management

Up to August 14, 2017, the Company paid its non-executive directors a base annual fee of $35 per year and an additional $5 per year to a Committee Chair, $10 to the Company’s Audit Committee Chair, and $25 to the Company’s Board Chair.  In addition, the Company paid $1 per meeting in cash for Board meetings in excess of six meetings per year.  

Effective August 14, 2017, the Company revised the remuneration of its non-executive directors to a base annual fee of $80 per year and an additional $18 per year to the Company’s Audit Committee Chair, $13 to the Company’s other Committee Chairs, and $40 to the Company’s Board Chair. In addition, the Company will pay $1 per meeting in cash for Board meetings in excess of six meeting per year. The fees will be settled through a combination of cash and the issuance of DSUs with each board member obligated to receive a minimum of 50% and a maximum of 100% of all such compensation in DSUs.  

The remuneration of directors and members of the executive management team included:

	For the year ended December 31,		For the fifteen months ended December 31,
	2017 $		2016 $
Stock-based compensation		2,507		895
Bonuses - cash		1,425	-
Bonuses - stock-based		6,000		1,499
Salaries, benefits and directors fees included in general    and administrative expenses		1,707		1,901
Salaries and benefits included in exploration    expenditures		368		396
Salaries and benefits capitalized to Investment in the Joint Venture		127	-
		12,134		4,691

	As at December 31, 2017		As at December 31, 2016
	$		$
Total due to directors and executive team		265		411

There were no contractual or other commitments from the related party transactions.  The amounts due to related parties are unsecured, non-interest bearing and have no specific terms for repayment.

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General and Administrative Expenses

12 Months Ended

Dec. 31, 2017

Disclosure Of General And Administrative Expenses [Abstract]

General and Administrative Expenses

11. GENERAL AND ADMINISTRATIVE EXPENSES

The following table summarizes the Company’s general and administrative expenses during the year ended December  31, 2017 and fifteen months ended December 31, 2016:  

	For the year ended December 31,		For the fifteen months ended December 31,
	2017 $		2016 $
Investor relations		63		253
Marketing		565		875
Office and administration		743		741
Professional fees		926		886
Regulatory and filing fees		403		112
Salaries, benefits and directors fees		3,746		2,619
Travel and conferences		799		493
Transaction costs		-		431
Depreciation		51		38
		7,296		6,448

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Disclosure Of Commitments And Contingencies [Abstract]

Commitments and Contingencies

12. COMMITMENTS AND CONTINGENCIES

As at December 31, 2017, the Company had the following commitments that have not been disclosed elsewhere in these consolidated financial statements:

	Not later than 1 year $		Later than 1 year and not later than 5 years $		Later than 5 years $	Total $
Rent of office spaces		276		310	-		586

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Exploration Expenditures

12 Months Ended

Dec. 31, 2017

Disclosure Of Exploration Expenditures [Abstract]

Exploration Expenditures

13. EXPLORATION EXPENDITURES

The following tables summarize the Company’s exploration expenditures during the year ended December 31, 2017 and fifteen months ended December 31, 2016:

	For the year ended December 31, 2017
	Lithium Nevada $		Cauchari-Olaroz¹ $		Total $
Drilling		1,195		-		1,195
Engineering		14		-		14
Environmental		279		-		279
Geological and consulting		1,871		-		1,871
Field supplies, other services, and taxes		397		471		868
Lithium demo plant equipment depreciation		112		-		112
		3,868		471		4,339

¹Expenditures related to the Cauchari-Olaroz project incurred directly by the Company. Starting from July 1, 2017, construction costs related to the Cauchari-Olaroz project are capitalized into Investment in Joint Venture.

13. EXPLORATION EXPENDITURES (continued)

	For the fifteen months ended December 31, 2016
	Lithium Nevada $		Cauchari-Olaroz¹ $		Total $
Engineering		169		82		251
Environmental		83	-			83
Geological and consulting		1,800		454		2,254
Field supplies, other services, and taxes		280		440		720
Lithium demo plant equipment depreciation		140	-			140
		2,472		976		3,448

¹Exploration expenditures prior to the formation of the Joint Venture

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Segmented Information

12 Months Ended

Dec. 31, 2017

Disclosure Of Operating Segments [Abstract]

Segmented Information

14. SEGMENTED INFORMATION

The Company operates in three operating segments and four geographical segments.  Organoclay project is in the production stage, Lithium Nevada is in the exploration stage and Cauchari-Olaroz project is in the development stage. The Company’s reportable segments are summarized in the following tables:

	Organoclay $			Lithium Nevada $			Cauchari-Olaroz $		Corporate $			Total $
As at December 31, 2017
Property, plant and equipment		17,011			1,018		-			41			18,070
Exploration and evaluation assets	-				2,104		-		-				2,104
Total assets		19,745			3,642			19,637		70,467			113,491
Total liabilities		(1,323	)		(896	)	-			(2,505	)		(4,724	)
For the year ended December 31, 2017
Property, plant and equipment expenditures		891			143		-			27			1,061
Sales		4,290		-			-		-				4,290
Inventory write-down		774		-			-		-				774
Net loss		3,043			5,183			4,850		20,174			33,250
Exploration expenditures	-				3,868			471	-				4,339
Depreciation		776			157		-			6			939
Organoclay research and development		423		-			-		-				423

	Organoclay $			Lithium Nevada $			Cauchari- Olaroz $		Corporate $			Total $
As at December 31, 2016
Property, plant and equipment		17,450			1,033		-			19			18,502
Exploration and evaluation assets	-				1,447		-		-				1,447
Total assets		18,585			3,056			13,136		10,524			45,301
Total liabilities		(1,513	)		(291	)	-			(1,074	)		(2,878	)
For the fifteen months ended December 31, 2016
Property, plant and equipment expenditures		681			14			2		6			703
Sales		1,154		-			-		-				1,154
Inventory write-down		648		-			-		-				648
Net loss		2,871			3,335			3,987		17,531			27,724
Exploration expenditures	-				2,472			976	-				3,448
Depreciation		720			168		-			6			894
Organoclay research and development		536		-			-		-				536

14. SEGMENTED INFORMATION (continued)

The Company’s non-current assets and revenues are segmented geographically as follows:

	Canada $		United States $		Germany $		Argentina $		Total $
Non-current assets (1)
As at December 31, 2017		41		19,377		756		19,637		39,811
As at December 31, 2016		19		19,062		868		13,136		33,085
Revenue
For the year ended December 31, 2017	-			4,290	-		-			4,290
For the fifteen months ended December 31, 2016	-			1,154	-		-			1,154

¹Non-current assets attributed to geographical locations exclude deferred income tax assets and financial and other assets.

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Supplemental Disclosure with Respect to Cash Flows

12 Months Ended

Dec. 31, 2017

Supplemental Information With Respect To Cash Flows [Abstract]

Supplemental Disclosure with Respect to Cash Flows

15. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

Supplementary disclosure of the Company’s non-cash transactions is provided in the table below:

	For the year ended December 31,		For the fifteen months ended December 31,
	2017 $		2016 $
Accounts payable related to property, plant and equipment		28		50
Assets acquired under finance leases		29	-
Accounts payable related to inventories		197		197
Accounts payable related to financings		1,611		175
Deferred financings costs		1,361	-
Accounts payable for salaries settled with DSUs and RSs		290	-
RSs and DSUs granted in lieu of deferred salaries and directors’ fees		81		80
Interest/finance charges paid	52			77
Income taxes paid	-		-

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Income Taxes

12 Months Ended

Dec. 31, 2017

Major Components Of Tax Expense Income [Abstract]

Income Taxes

16. INCOME TAXES

A reconciliation of income taxes at Canadian statutory rates with reported taxes is as follows:

	For the year ended December 31			For the fifteen months ended December 31,
	2017 $			2016 $
Loss for the period		(33,250	)		(27,724	)
Expected income tax recovery		(8,645	)		(7,208	)
Items not deductible for income tax purposes		3,612			1,010
Loss of sale of 50% interest in Minera Exar	-				3,278
Effect of change in deferred income tax rate		3,964		-
Effect of lower (higher) tax rate in foreign jurisdiction		(25	)		(647	)
Change in unrecognized deferred tax assets and other		1,094			3,567
Deferred income tax (expense)/recovery	-			-

16. INCOME TAXES (continued)

The significant components of the Company's unrecognized deferred tax assets are as follows:

	December 31, 2017 $		December 31, 2016 $
Tax loss carryforwards		14,359		12,634
Exploration and evaluation assets		124		1,350
Financing costs		573		424
Capital assets		238		607
Other		564		94
Unrecognized deferred tax assets		15,858		15,108

The Company has Canadian non-capital loss carryforwards of CDN$33,500 (2016 - CDN$24,200) and in the US of approximately $34,500 (2016 - $22,700) expiring between 2028 – 2037 which are available to reduce taxable income in Canada and the US respectively.  

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Financial Instruments

12 Months Ended

Dec. 31, 2017

Disclosure Of Financial Instruments [Abstract]

Financial Instruments

17. FINANCIAL INSTRUMENTS

Financial instruments recorded at fair value on the consolidated statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.  The fair value hierarchy has the following levels:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for assets or liabilities, either directly or indirectly; and

Level 3 – Inputs for assets and liabilities that are not based on observable market data.

The fair value hierarchy requires the use of observable market inputs whenever such inputs exist.  A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value.  The Company did not have any financial instruments measured at fair value on the statement of financial position.

17. FINANCIAL INSTRUMENTS (continued)

The Company may be exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives. The Company manages risks to minimize potential losses. The main objective of the Company’s risk management process is to ensure that the risks are properly identified and that the capital base is adequate in relation to those risks.  The principal risks to which the Company is exposed are described below.

Credit Risk

Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations.  Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, restricted cash, receivables and loans to the Joint Venture.  The Company’s maximum exposure to credit risk for cash, cash equivalents, restricted cash and receivables is the amount disclosed in the consolidated statements of financial position.  The Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions and invests only in short-term obligations that are guaranteed by the Canadian government or by Canadian and US chartered banks.

Included in the receivables, prepaids and deposits are credit sales receivables of $399. Management’s assessment of recoverability involves judgments regarding classification on the consolidated statements of financial position and the probable outcomes of claimed deductions and/or disputes.  The provisions and classifications made to date may be subject to change.

The Company’s receivables, prepaids and deposits include a $105 bank deposit for the Company’s secured credit cards and other miscellaneous receivables that are subject to normal industry credit risk.

Management believes that the credit risk concentration with respect to financial instruments included in cash, cash equivalents and receivables is minimal.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.  The Company’s approach to managing liquidity is to evaluate current and expected liquidity requirements under both normal and stressed conditions to ensure that it maintains sufficient reserves of cash and cash equivalents to meet its liquidity requirements in the short and long term.  As the industry in which the Company operates is very capital intensive, the majority of the Company’s spending is related to its capital programs.  The Company prepares annual budgets, which are regularly monitored and updated as considered necessary.  

17. FINANCIAL INSTRUMENTS (continued)

As at December 31, 2017, the Company had a cash and cash equivalents balance of $55,394 (December 31, 2016 - $8,056) to settle current liabilities of $3,724 (December 31, 2016 - $1,806).  

The following table summarizes the maturities of the Company’s financial liabilities on undiscounted basis:

			Years ending December 31,
	2018		2019		2020 and later		Total
	$		$		$		$
Accounts payable and accrued liabilities		3,546	-		-			3,546
Long-term borrowing¹		172		172		618		962
Obligation under finance leases¹		52		49	-			101
Total		3,770		221		618		4,609

^¹Long-term borrowing and obligation under capital leases include principal and interest/finance charges.

Market Risk

Market risk incorporates a range of risks.  Movement in risk factors, such as market price risk and currency risk, affect the fair values of financial assets and liabilities.  The Company is exposed to these risks as the ability of the Company to develop or market its property and the future profitability of the Company are related to the market price of certain minerals.

Foreign Currency Risk

The Company’s operations in foreign countries are subject of currency fluctuations and such fluctuations may affect the Company’s financial results. The Company reports its financial results in United States dollars and incurs expenditures in Canadian dollars (“CDN$”) and US dollars (“US$”) with the majority of the expenditures being incurred in US$ by the Company’s subsidiaries. As at December 31, 2017, $49,496 of the Company’s $55,394 in cash and cash equivalents was held in United States Dollars.

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Capital Disclosures

12 Months Ended

Dec. 31, 2017

Disclosure Of Capital Disclosures [Abstract]

Capital Disclosures

18. CAPITAL DISCLOSURE

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration and development of its mineral properties and to maintain a flexible capital structure.  During the year ended December 31, 2017, the Company completed the closing of financing transactions with Ganfeng and Bangchak (Note 9). The capital structure of the Company consists of long-term borrowing, project debt facilities and equity attributable to common shareholders, comprising issued capital, contributed surplus, and deficit.  The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets.

In order to carry out the planned exploration and development of its projects and pay for administrative costs, the Company will spend its existing working capital, draw on its project debt facilities or raise additional amounts as needed and if available.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.  There were no changes in the Company’s approach to capital management during the year ended December 31, 2017.  

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Subsequent Events

12 Months Ended

Dec. 31, 2017

Disclosure Of Nonadjusting Events After Reporting Period [Abstract]

Subsequent Events

19. SUBSEQUENT EVENTS

On January 18, 2018 the Company received approval for the listing of its common shares on the NYSE, which began trading on the NYSE under the symbol “LAC” on January 25, 2018.

On February 7, 2018 the Company filed a final short form base shelf prospectus in each province of Canada, other than the Province of Quebec, to qualify the distribution, from time to time over a 25-month period of up to US$500 million of the Company’s debt and equity securities. The Company also filed a corresponding shelf registration statement with the SEC on Form F-10 under the Multijurisdictional Disclosure System.

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Disclosure Of Significant Accounting Policies [Abstract]

Critical Accounting Estimates and Judgements

Critical Accounting Estimates and Judgements

The preparation of these financial statements in conformity with IFRS requires judgments, estimates, and assumptions that affect the amounts reported.  Those estimates and assumptions concerning the future may differ from actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The following are the estimates, assumptions and areas of judgment applied by management that most significantly affect the Company’s financial statements:

Commercial viability and technical feasibility of the Cauchari-Olaroz project

The application of the Company’s accounting policy for exploration and evaluation assets requires judgement in assessing when the commercial viability and technical feasibility of the Cauchari-Olaroz project has been determined, at which point the asset is reclassified to property, plant and equipment.  In the judgement of the Company, the commercial viability and technical feasibility of the Cauchari-Olaroz project has been demonstrated effective July 1, 2017.

Impairment of exploration and evaluation assets

The application of the Company’s accounting policy for impairment of exploration and evaluation assets requires judgment to determine whether indicators of impairment exist including information such as, the period for which the Company has the right to explore including expected renewals, whether substantive expenditures on further exploration and evaluation of resource properties are budgeted and evaluation of the results of exploration and evaluation activities up to the reporting date. Management has performed an impairment indicators assessment on the Company’s exploration and evaluation assets and has concluded that no impairment indicators exist as of December 31, 2017.

Impairment of other long lived assets

The application of the Company’s accounting policy for impairment of its investment in joint venture and property, plant and equipment requires judgment to determine whether indicators of impairment exist. The review of impairment indicators includes consideration of both external and internal sources of information, including factors such as market and economic conditions, taxation, prices and forecasts, capital expenditure requirements, future operating costs and production volumes. Management has assessed impairment indicators on the Company’s investment in joint venture and property, plant and equipment and has concluded that no impairment indicators exist as of December 31, 2017.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements contained herein include the accounts of Lithium Americas Corp. and its wholly-owned USA subsidiaries Lithium Nevada Corp., KV Project LLC, and RheoMinerals Inc., and Canadian wholly-owned subsidiary 2265866 Ontario Inc. All inter-company transactions and balances have been eliminated.

Subsidiaries are all entities over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

Investments in Joint Arrangements

Investments in Joint Arrangements

A joint arrangement is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. Joint control is the contractually agreed sharing of control such that significant operating and financial decisions require the unanimous consent of the parties sharing control. The Company’s arrangement with respect to Cauchari-Olaroz project is classified as a joint venture and is accounted for using the equity method. The equity method involves recording the initial investment at cost. When a joint venture is formed from a previous investment in a subsidiary, the Company made a policy choice decision to recognize a gain or loss on change of control in relation to the portion of the investment no longer owned based upon the carrying value of the assets.  Additional funding into an investee is recorded as an increase in the carrying value of the investment. The carrying amount is adjusted by the Company’s share of a joint venture’s net income or loss, depreciation, amortization or impairment and foreign currency differences arising on translation from functional to the presentation currency. When the Company’s share of losses of a joint venture exceeds the Company’s carrying value of the investment, the Company discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the joint venture.

Foreign Currency Translation

Foreign Currency Translation

Functional and Presentation Currency

Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency).  The consolidated financial statements are presented in US dollars. The functional currency of all subsidiaries in the Company’s group other than Lithium Americas Corporation is the US dollar, while the functional currency of Lithium Americas Corporation is the Canadian dollar. The functional currency of the Company’s Joint Venture is the Argentinian Peso.

Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss. They are deferred in equity if they are attributable to part of the net investment in a foreign operation. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.  

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognized in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equities classified as available-for-sale financial assets are recognized in other comprehensive income.

3.SIGNIFICANT ACCOUNTING POLICIES (continued)

Parent and Subsidiary Companies

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each reporting date are translated at the closing rate at that reporting date;

• income and expenses are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and

• all resulting exchange differences are recognized in other comprehensive loss.

The Company recognizes its share of the exchange differences of its joint ventures which result from translation of the results and financial position of its foreign joint ventures from the functional to the presentation currency.  

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from the item are considered to form part of the net investment in a foreign operation and are recognized in other comprehensive income.

When an entity disposes of its entire interest in a foreign operation, or loses control, joint control, or significant influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive income related to the foreign operation are recognized in profit or loss. If an entity disposes of part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in other comprehensive income related to the subsidiary is reallocated between controlling and non-controlling interests.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents consist of cash held with banks and highly liquid short-term investments in high interest saving accounts which can be withdrawn at any time, which is subject to an insignificant risk of changes in value.

Exploration and Evaluation Assets

Exploration and Evaluation Assets

Exploration expenditures not including the acquisition costs and claim maintenance costs are expensed as incurred until an economic feasibility study has established the presence of proven and probable reserves and development of the project has commenced, at which time exploration and development expenditures incurred on the property thereafter are capitalized. The establishment of technical feasibility and commercial viability of a mineral property is assessed based on a combination of factors, including:

• The extent to which mineral reserves or mineral resources as defined in National Instrument 43-101 (“NI 43-101”) have been identified through a feasibility study or similar document;

• The status of environmental permits; and

• The status of mining leases or permits.

Costs incurred relating to the acquisition and claim maintenance of mineral properties, including option payments and annual fees to maintain the property in good standing, are capitalized and deferred by property until the project to which they relate is sold, abandoned, impaired or placed into production.  After recognition, the Company uses the cost model for exploration and evaluation assets.

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company assesses its capitalized mineral property costs for indications of impairment on each balance sheet date and when events and circumstances indicate a risk of impairment.  A property is written down or written off when the Company determines that an impairment of value has occurred or when exploration results indicate that no further work is warranted. Exploration and evaluation assets are tested for impairment immediately prior to reclassification to mineral property development costs.

Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title.  Such properties may be subject to prior agreements or transfers, or title may be affected by undetected defects.

Property, Plant and Equipment

Property, Plant and Equipment

On initial recognition, property, plant and equipment are valued at cost. Cost includes the purchase price and directly attributable cost of acquisition or construction required to bring the asset to the location and condition necessary to be capable of operating in the manner intended by the Company, including appropriate borrowing costs.  During the development and commissioning phase, pre-production expenditures, net of incidental proceeds from sales during this period, are capitalized to the asset under construction and equipment.  Capitalization of costs incurred ceases when commercial production commences in the manner intended by management.  The Company applies judgment in its assessment of when the asset is capable of operating in the manner intended by management.

Property, plant and equipment are subsequently measured at cost less accumulated depreciation, less any accumulated impairment losses, with the exception of land which is not depreciated.  When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items or major components.

Property, plant and equipment that are currently in use are depreciated as follows:

• Organoclay plant – straight-line basis over the estimated useful life of 20 years;

• Buildings – straight-line basis over the estimated useful life of 20 years;

• Organoclay plant equipment included in “Equipment and machinery” – straight line basis over the estimated life of 5-20 years;

• Lithium demo plant equipment included in “Equipment and machinery” – straight-line basis over the estimated useful life of 10 years;

• Office equipment included in “Other” – declining balance method at 20% annual rate; and

• Other equipment included in “Other” – straight-line basis over the estimated useful life of 7-15 years.

The assets’ residual values, useful lives and depreciation methods are reviewed and adjusted, if appropriate, at each financial year-end.  The gain or loss arising on the disposal of an item of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in profit and loss.

Impairment of Property, Plant and Equipment

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of Property, Plant and Equipment

Property, plant and equipment are assessed for impairment indicators at each reporting date or when an impairment indicator arises if not at a reporting date.  Impairment indicators are evaluated and, if considered necessary, an impairment assessment is carried out.  If an impairment loss is identified, it is recognized for the amount by which the asset’s carrying amount exceeds it recoverable amount.  The recoverable amount is the higher of an asset’s fair value less cost of disposal and value in use.  

Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.  For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).  These are typically individual mines, plants or development projects.  

Where the factors which resulted in an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years.  A reversal of an impairment loss is recognized immediately in profit or loss.

Leased Assets

Leased Assets

Finance leases, which transfer to the Company substantially all the risks and rewards incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments.  The corresponding lease commitment is shown as a liability.  Lease payments are apportioned between capital and interest. Interest charges are capitalized to asset under construction during the development and commissioning phase. The capital element reduces the balance owed to the lessor.

Inventories

Inventories

Organoclay products, in-process and stockpile inventories are recorded at the lower of average cost and net realizable value. The cost of finished goods and work-in-progress is determined by the weighted average cost method and comprises raw materials, direct labour, and other direct costs, as well as related production overheads including applicable depreciation on property, plant and equipment.  Net realizable value is the estimated selling price less applicable selling expenses.  When inventories have been written down to net realizable value, a new assessment of net realizable value is made in each subsequent period.  When the circumstances that caused the write down no longer exist, the amount of the write down is reversed.  

Materials and supplies inventories are valued at the lower of average cost and net realizable value.  Cost includes acquisition, freight and other directly attributable costs.

Financial Instruments

Financial Instruments

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.  Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

All of the Company’s financial instruments are classified into one of the following categories: loans and receivables or other financial liabilities.  All financial instruments are measured in the statement of financial position at fair value initially.  Loans and receivables and other financial liabilities are subsequently measured at amortized cost.  

The Company does not use derivative instruments or hedges to manage risks.

Cash and receivables and short-term restricted cash have been designated as loans and receivables and are included in current assets due to their short-term nature. Loans to the Joint Venture and long-term restricted cash have been designated as loans and receivables and are included in non-current assets due to their long-term nature. The Company’s other financial liabilities include accounts payable and accrued liabilities, long-term borrowing, convertible security, and obligation under finance leases.

Borrowing Costs

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of assets requiring a substantial period of time to get ready for their intended use or sale are capitalized as part of the cost of that asset. Capitalization of borrowing costs begin when there are borrowings and activities commence to prepare an asset for its intended use. Capitalization of borrowing costs ends when substantially all activity necessary to prepare a qualifying asset for its intended use are complete. When proceeds of project specific borrowings are invested on a temporary basis, borrowing costs are capitalized net of any investment income.  

Provisions

Provisions

Provisions are recognized when the Company has a present obligation, legal or constructive, as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.  Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Close down and restoration costs include dismantling and demolition of infrastructure and the removal of residual materials and remediation of disturbed areas.  Estimated close down and restoration costs are provided for in the accounting period when the obligation arising from the related disturbance occurs, based on the net present value of estimated future costs.  The cost estimates are updated during the life of the operation to reflect known development, such as revisions to cost estimates and to the estimated lives of the operations, and are subject to formal reviews at regular intervals.  The initial closure provision together with changes resulting from changes in estimated cash flows or discount rates are capitalized within capital assets.  These costs are then depreciated over the lives of the asset to which they relate, typically using the units of production method.  The amortization or unwinding of the discount applied in establishing the net present value of provisions is charged to the statement of comprehensive (loss)/income as a financing cost.  Provision is made for the estimated present value of the costs of environmental cleanup obligations outstanding at the statement of financial position date

Income Taxes

Income Taxes

Income tax expense comprises current and deferred tax.  Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity.  Current tax expense is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at period-end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is recorded using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.  Temporary differences are not provided for the initial recognition of assets or liabilities that affect neither accounting or taxable loss, nor differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.  The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.  To the extent that the Company does not consider it probable that a deferred tax asset will be recovered, the deferred tax asset is not recorded.

Share Capital

Share Capital

Common shares are classified as equity.  Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity.

Revenue

Revenue

Organoclay products revenue is recognized when it is probable that the economic benefits will flow to the Company, risks and rewards of ownership are transferred to the customer, delivery has occurred, the sales price is reasonably determinable, and collectability is reasonably assured.  These criteria are generally met at the time the product is shipped or delivered to the customer and, depending on the delivery conditions, title and risk have passed to the customer and acceptance of the product, when contractually required, has been obtained.  Revenue is measured based on the price specified in the sales contract, net of discounts, at the time of sale.

Earnings/(Loss) per Share

Earnings/(Loss) per Share

Basic earnings/(loss) per share is computed by dividing net loss attributable to shareholders of the Company by the weighted average number of common shares outstanding during the reporting period. The diluted loss per share calculation is based on the weighted average number of common shares outstanding during the period, plus the effects of dilutive common share equivalents.  This method requires that the dilutive effect of outstanding options and warrants issued should be calculated using the treasury stock method.  This method assumes that all common share equivalents have been exercised at the beginning of the period (or at the time of issuance, if later), and that the funds obtained thereby were used to purchase common shares of the Company at the average trading price of the common shares during the period, but only if dilutive.

Stock-Based Compensation

Stock-Based Compensation

The Company grants stock options to buy common shares of the Company to directors, officers, employees and service providers.  The fair value of stock options granted by the Company is treated as compensation costs in accordance with IFRS 2, Share-based Payment.  These costs are charged to the statement of comprehensive (loss)/income over the stock option vesting period.  

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Each tranche in an award is considered a separate award with its own vesting period and grant date fair value.  Fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model.  Compensation expense is recognized over the tranche’s vesting period based on the number of awards expected to vest, by increasing contributed surplus.  The number of awards expected to vest is reviewed at least annually with any impact being recognized immediately. Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in the statement of comprehensive (loss)/income, unless they are related to the issuance of shares.  Amounts related to the issuance of shares are recorded as a reduction of share capital.  When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model.  

The Company’s equity incentive plan also allows the grant of restricted shares and deferred share units. The cost of equity-settled payment arrangements is recorded based on the estimated fair value at the grant date and charged to earning over the vesting period.

Organoclay Product Development

Organoclay Product Development

Expenditure on research activities related to the obtaining of new scientific or technical knowledge is expensed as incurred.  Expenditure on development activities, whereby the research results or other knowledge is applied to accomplish new or improved products or processes, is recognized as an intangible asset in the statement of financial position, provided the product or process is technically and commercially feasible and the Company has sufficient resources to complete development, and is subsequently able to use or sell the intangible asset.  The carrying amount includes the directly attributable expenditure, such as the cost of materials and services, costs of employee benefits, fees to register intellectual property rights and amortization of patents and licenses.  In the statement of financial position, product development are stated at cost less accumulated amortization and any impairment losses.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Accounting standards and amendments issued but not yet adopted

IFRS 9, Financial Instruments (“IFRS 9”), addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in International Accounting Standard (“IAS”) 39 that relates to the classification and measurement of financial instruments.

IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortized cost, fair value through other comprehensive income (“FVOCI”) and fair value through profit and loss (“FVTPL”). There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39.

For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in OCI, for liabilities designated as FVTPL.  The standard is effective for accounting periods beginning on or after January 1, 2018. The Company has determined that adoption of this standard will have no significant impact on the consolidated financial statements.

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

IFRS 15, Revenue from Contracts with Customers (“IFRS 15”), deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.  IFRS 15 was issued in May 2014 by the IASB.  Under IFRS 15, revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service.  The standard replaces IAS 18, Revenue, and IAS 11, Construction Contracts, and related interpretations.  The standard is effective for annual periods beginning on or after January 1, 2018. The Company has determined that adoption of this standard will have no significant impact on the consolidated financial statements.

IFRS 16, Leases (“IFRS 16”), was issued in January 2016 by the IASB.  According to the new standard, all leases will be on the statement of financial position of lessees, except those that meet the limited exception criteria.  The standard is effective for annual periods beginning on or after January 1, 2019.  The Company is currently evaluating the effect the standard will have on its consolidated financial statements.

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Cash and Cash Equivalents - (Tables)

12 Months Ended

Dec. 31, 2017

Cash And Cash Equivalents [Abstract]

Summary of Cash and Cash Equivalents

	As at December 31,		As at December 31,
	2017 $		2016 $
Cash		6,319		1,449
Short-term bank deposits		49,075		6,607
		55,394		8,056

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Joint Venture (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure Of Joint Ventures [Line Items]

Disclosure of Change in Investments in Joint Ventures

The changes in investment in the Joint Venture since initial contribution are as follows:

Initial contribution to Joint Venture – March 28, 2016	$
50% of net asset value of Minera Exar		13,276
50% of contribution for Joint Venture project development		5,000
Total initial contribution		18,276
Share of loss of Joint Venture		(3,987	)
Translation adjustment		(1,153	)
Investment in Joint Venture – December 31, 2016		13,136
Share of loss of Joint Venture		(4,850	)
Translation adjustment		(2,127	)
Contribution to Joint Venture by LAC		13,717
Elimination of unrealized gains on intercompany transactions		(239	)
Investment in Joint Venture – December 31, 2017		19,637

Minera Exar

Disclosure Of Joint Ventures [Line Items]

Summary of Financial Statements Information of Joint Ventures

The following amounts represent the amounts presented in the financial statements of Minera Exar. They have been amended to reflect modifications for differences in accounting policies.

	December 31, 2017			December 31, 2016
	$			$
Current assets
Cash and cash equivalents		9,198			3,119
Other current assets		2,410			1,281
Total current assets		11,608			4,400
Non-current assets		66,821			28,261
Current liabilities		(13,189	)		(6,268	)
Non-current liabilities		(26,323	)		(121	)
Net assets		38,917			26,272

Summarized statement of loss from operations	For the year ended December 31, 2017		For the period March 28, 2016 - December 31, 2016
	$		$
Exploration expenditures		8,898		8,060
Depreciation		213		24
Other expenses/(income)		589		(108	)
Loss from continuing operations		9,700		7,976

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Property Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure Of Property Plant And Equipment [Abstract]

Summary of Property Plant and Equipment

	Land		Buildings		Equipment and machinery			Organoclay plant		Other			Total
	$		$		$			$		$			$
Cost
As at September 30, 2015		371		1,957		5,068			11,149		356			18,901
Additions		15		184		88			346		70			703
Disposition		-		-		-			-		(29	)		(29	)
Contribution to Joint Venture		-		-		-			-		(12	)		(12	)
Foreign exchange		-		-		-			-		(3	)		(3	)
As at December 31, 2016		386		2,141		5,156			11,495		382			19,560
Additions		-		2		805			-		254			1,061
Write down		-		-		(399	)		-		-			(399	)
As at December 31, 2017		386		2,143		5,562			11,495		636			20,222

	Land		Buildings		Equipment and machinery			Organoclay plant		Other			Total
	$		$		$			$		$			$
Accumulated depreciation
As at September 30, 2015		-		-		112			-		76			188
Depreciation for the year		-		76		335			431		52			894
Disposition		-		-		-			-		(20	)		(20	)
Contribution to Joint Venture		-		-		-			-		(4	)		(4	)
As at December 31, 2016		-		76		447			431		104			1,058
Depreciation for the year		-		107		366			575		76			1,124
Disposition		-		-		(30	)		-		-			(30	)
As at December 31, 2017		-		183		783			1,006		180			2,152

	Land		Buildings		Equipment and machinery		Organoclay plant		Other		Total
	$		$		$		$		$		$
Net book value
As at December 31, 2016		386		2,065		4,709		11,064		278		18,502
As at December 31, 2017		386		1,960		4,779		10,489		456		18,070

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Exploration and Evaluation Assets (Tables)

12 Months Ended

Dec. 31, 2017

Exploration And Evaluation Assets [Abstract]

Schedule of Exploration and Evaluation Assets

	December 31, 2017
	Lithium Nevada
	$
Acquisition costs
Balance, beginning		1,447
Additions		706
Write offs		(49	)
Total exploration and evaluation assets		2,104

	December 31, 2016
	Lithium Nevada $		Cauchari- Olaroz $			Total $
Acquisition costs
Balance, beginning		958		41,665			42,623
Additions		489		71			560
Change in foreign exchange rate		-		(14,874	)		(14,874	)
Sale of 50% of net assets		-		(13,431	)		(13,431	)
Contribution to Joint Venture		-		(13,431	)		(13,431	)
Total exploration and evaluation assets		1,447		-			1,447

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Long Term Borrowing (Tables)

12 Months Ended

Dec. 31, 2017

Borrowings [Abstract]

Schedule of Long-Term Borrowing

	As at December 31,		As at December 31,
	2017 $		2016 $
Current portion of long-term borrowings
Promissory note		130		125
Obligation under finance leases		48		44
		178		169
Long-term borrowings
Promissory note		703		833
Obligation under finance leases		48		69
		751		902
		929		1,071

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Issued Capital, Equity Compensation and Warrants (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure Of Terms And Conditions Of Sharebased Payment Arrangement [Abstract]

Summary of Changes to Number of Restricted Shares

A summary of changes to the number of restricted shares is as follows:

	Number of RSs (in 000's)
Balance, RSs September 30, 2015		-
Granted		873
Converted into common shares		(383	)
Balance, RSs December 31, 2016		490
Granted		1,589
Converted into common shares		(521	)
Forfeited		(8	)
Balance, RSs December 31, 2017		1,550

Summary of Changes to Number of Deferred Share Units

During the year ended December 31, 2017 the Company granted 73 DSUs with the total estimated fair value of $336 to the Company’s directors in lieu of the directors’ fees payments.

	Number of DSUs (in 000's)
Balance, DSUs September 30, 2015		-
Granted		9
Balance, DSUs December 31, 2016		9
Granted		73
Converted into common shares		(41	)
Balance, DSUs December 31, 2017		41

Summary of Fair Value of Stock Options Granted by Using Black-Scholes Option Pricing Model

The fair value of stock options granted are estimated on the dates of grants using the Black-Scholes Option Pricing Model with the following assumptions used for the grants made during the period:

	April 4, 2017			April 4, 2017			May 16, 2017			Sep 14, 2017			Nov 27, 2017			Dec 22, 2017
Number of options granted (‘000’s)		835			200			100			1,860			60			30
Exercise price per share (CDN$)	$	4.90		$	4.90		$	5.00		$	8.05		$	12.34		$	11.07
Risk-free interest rate		0.7	%		0.7	%		0.7	%		1.6	%		1.6	%		1.8	%
Expected life	3			3			3			3			3			3
Annualized volatility		73	%		73	%		72	%		69	%		66	%		73	%
Dividend rate	-			-			-			-			-			-
Fair value per stock option granted (CDN$)	$	2.10		$	2.10		$	2.35		$	3.75		$	5.52		$	5.32
Total fair value of stock options granted (CDN$)	$	1,754		$	420		$	235		$	6,975		$	331		$	160

Summary of Stock Options Outstanding and Exercisable

Stock options outstanding and exercisable as at December 31, 2017 are as follows:

	Options Outstanding				Options Exercisable
Range of Exercise Prices CDN$	Number Outstanding as at December 31, 2017 (in 000's)		Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price CDN$	Number Exercisable as at December 31, 2017 (in 000's)		Weighted Average Exercise Price CDN$
$1.35 - $1.50		1,074	1.75	1.44		1,074	1.44
$1.70 - $1.90		327	1.57	1.81		327	1.81
$2.35 - $3.75		820	3.12	2.61		820	2.61
$4.80 - $5.00		1,172	4.19	4.88		624	4.87
$8.05 - $11.05		1,913	4.72	8.23		478	8.23
		5,306	3.56	4.85		3,323	3.39

Summary of Changes to Stock Options Outstanding

A summary of changes to stock options outstanding is as follows:

	Number of Options (in 000's)			Weighted Average Exercise Price, (CDN$)
Balance, outstanding September 30, 2015		3,466			2.15
Granted		1,873			2.30
Exercised		(1,602	)		1.75
Expired		(290	)		6.15
Forfeited		(23	)		2.25
Balance, outstanding December 31, 2016		3,424			2.15
Granted		3,085			7.01
Exercised		(1,073	)		2.22
Forfeited		(130	)		5.20
Balance, outstanding December 31, 2017		5,306			4.85

Summary of Changes in Number of Share Purchase Warrants

A summary of the changes in the number of the Company’s share purchase warrants is as follows:

	Number of Warrants (in ‘000’s)			Weighted Average Exercise Price (CDN$)
Balance, September 30, 2015		3,555			4.05
Exercised		(407	)		3.62
Expired		(1,282	)		3.75
Balance, December 31, 2016		1,867			4.35
Exercised		(1,687	)		4.32
Expired		(180	)		4.49
Balance, December 31, 2017		-		-

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

Summary of Compensation of Key Management

The remuneration of directors and members of the executive management team included:

	For the year ended December 31,		For the fifteen months ended December 31,
	2017 $		2016 $
Stock-based compensation		2,507		895
Bonuses - cash		1,425	-
Bonuses - stock-based		6,000		1,499
Salaries, benefits and directors fees included in general    and administrative expenses		1,707		1,901
Salaries and benefits included in exploration    expenditures		368		396
Salaries and benefits capitalized to Investment in the Joint Venture		127	-
		12,134		4,691

	As at December 31, 2017		As at December 31, 2016
	$		$
Total due to directors and executive team		265		411

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General and Administrative Expenses (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure Of General And Administrative Expenses [Abstract]

Summary of Company's General and Administrative Expenses

The following table summarizes the Company’s general and administrative expenses during the year ended December  31, 2017 and fifteen months ended December 31, 2016:  

	For the year ended December 31,		For the fifteen months ended December 31,
	2017 $		2016 $
Investor relations		63		253
Marketing		565		875
Office and administration		743		741
Professional fees		926		886
Regulatory and filing fees		403		112
Salaries, benefits and directors fees		3,746		2,619
Travel and conferences		799		493
Transaction costs		-		431
Depreciation		51		38
		7,296		6,448

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure Of Commitments And Contingencies [Abstract]

Schedule of Other Commitments

As at December 31, 2017, the Company had the following commitments that have not been disclosed elsewhere in these consolidated financial statements:

	Not later than 1 year $		Later than 1 year and not later than 5 years $		Later than 5 years $	Total $
Rent of office spaces		276		310	-		586

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Exploration Expenditures (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure Of Exploration Expenditures [Abstract]

Summary of Company's Exploration Expenditures

The following tables summarize the Company’s exploration expenditures during the year ended December 31, 2017 and fifteen months ended December 31, 2016:

	For the year ended December 31, 2017
	Lithium Nevada $		Cauchari-Olaroz¹ $		Total $
Drilling		1,195		-		1,195
Engineering		14		-		14
Environmental		279		-		279
Geological and consulting		1,871		-		1,871
Field supplies, other services, and taxes		397		471		868
Lithium demo plant equipment depreciation		112		-		112
		3,868		471		4,339

¹Expenditures related to the Cauchari-Olaroz project incurred directly by the Company. Starting from July 1, 2017, construction costs related to the Cauchari-Olaroz project are capitalized into Investment in Joint Venture.

13. EXPLORATION EXPENDITURES (continued)

	For the fifteen months ended December 31, 2016
	Lithium Nevada $		Cauchari-Olaroz¹ $		Total $
Engineering		169		82		251
Environmental		83	-			83
Geological and consulting		1,800		454		2,254
Field supplies, other services, and taxes		280		440		720
Lithium demo plant equipment depreciation		140	-			140
		2,472		976		3,448

¹Exploration expenditures prior to the formation of the Joint Venture

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Segmented Information (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure Of Operating Segments [Abstract]

Summary of Reportable Segments

The Company’s reportable segments are summarized in the following tables:

	Organoclay $			Lithium Nevada $			Cauchari-Olaroz $		Corporate $			Total $
As at December 31, 2017
Property, plant and equipment		17,011			1,018		-			41			18,070
Exploration and evaluation assets	-				2,104		-		-				2,104
Total assets		19,745			3,642			19,637		70,467			113,491
Total liabilities		(1,323	)		(896	)	-			(2,505	)		(4,724	)
For the year ended December 31, 2017
Property, plant and equipment expenditures		891			143		-			27			1,061
Sales		4,290		-			-		-				4,290
Inventory write-down		774		-			-		-				774
Net loss		3,043			5,183			4,850		20,174			33,250
Exploration expenditures	-				3,868			471	-				4,339
Depreciation		776			157		-			6			939
Organoclay research and development		423		-			-		-				423

	Organoclay $			Lithium Nevada $			Cauchari- Olaroz $		Corporate $			Total $
As at December 31, 2016
Property, plant and equipment		17,450			1,033		-			19			18,502
Exploration and evaluation assets	-				1,447		-		-				1,447
Total assets		18,585			3,056			13,136		10,524			45,301
Total liabilities		(1,513	)		(291	)	-			(1,074	)		(2,878	)
For the fifteen months ended December 31, 2016
Property, plant and equipment expenditures		681			14			2		6			703
Sales		1,154		-			-		-				1,154
Inventory write-down		648		-			-		-				648
Net loss		2,871			3,335			3,987		17,531			27,724
Exploration expenditures	-				2,472			976	-				3,448
Depreciation		720			168		-			6			894
Organoclay research and development		536		-			-		-				536

Schedule of Non-current Assets and Revenue by Geographical Segment

The Company’s non-current assets and revenues are segmented geographically as follows:

	Canada $		United States $		Germany $		Argentina $		Total $
Non-current assets (1)
As at December 31, 2017		41		19,377		756		19,637		39,811
As at December 31, 2016		19		19,062		868		13,136		33,085
Revenue
For the year ended December 31, 2017	-			4,290	-		-			4,290
For the fifteen months ended December 31, 2016	-			1,154	-		-			1,154

¹Non-current assets attributed to geographical locations exclude deferred income tax assets and financial and other assets.

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Supplemental Disclosure with Respect to Cash Flows (Tables)

12 Months Ended

Dec. 31, 2017

Supplemental Information With Respect To Cash Flows [Abstract]

Supplementary Disclosure of Company's Non Cash Transactions

Supplementary disclosure of the Company’s non-cash transactions is provided in the table below:

	For the year ended December 31,		For the fifteen months ended December 31,
	2017 $		2016 $
Accounts payable related to property, plant and equipment		28		50
Assets acquired under finance leases		29	-
Accounts payable related to inventories		197		197
Accounts payable related to financings		1,611		175
Deferred financings costs		1,361	-
Accounts payable for salaries settled with DSUs and RSs		290	-
RSs and DSUs granted in lieu of deferred salaries and directors’ fees		81		80
Interest/finance charges paid	52			77
Income taxes paid	-		-

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Major Components Of Tax Expense Income [Abstract]

Summary of Reconciliation of Income Taxes at Canadian Statutory Rates with Reported Taxes

A reconciliation of income taxes at Canadian statutory rates with reported taxes is as follows:

	For the year ended December 31			For the fifteen months ended December 31,
	2017 $			2016 $
Loss for the period		(33,250	)		(27,724	)
Expected income tax recovery		(8,645	)		(7,208	)
Items not deductible for income tax purposes		3,612			1,010
Loss of sale of 50% interest in Minera Exar	-				3,278
Effect of change in deferred income tax rate		3,964		-
Effect of lower (higher) tax rate in foreign jurisdiction		(25	)		(647	)
Change in unrecognized deferred tax assets and other		1,094			3,567
Deferred income tax (expense)/recovery	-			-

Summary of Significant Components of Company's Unrecognized Deferred Tax Assets

The significant components of the Company's unrecognized deferred tax assets are as follows:

	December 31, 2017 $		December 31, 2016 $
Tax loss carryforwards		14,359		12,634
Exploration and evaluation assets		124		1,350
Financing costs		573		424
Capital assets		238		607
Other		564		94
Unrecognized deferred tax assets		15,858		15,108

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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure Of Financial Instruments [Abstract]

Summary of Maturities for Financial Liabilities on Undiscounted Basis

The following table summarizes the maturities of the Company’s financial liabilities on undiscounted basis:

			Years ending December 31,
	2018		2019		2020 and later		Total
	$		$		$		$
Accounts payable and accrued liabilities		3,546	-		-			3,546
Long-term borrowing¹		172		172		618		962
Obligation under finance leases¹		52		49	-			101
Total		3,770		221		618		4,609

^¹Long-term borrowing and obligation under capital leases include principal and interest/finance charges.

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Nature of Operations - Additional Information (Details)	12 Months Ended
	Dec. 31, 2017 Project
Nature Of Operations [Abstract]
Name of reporting entity	Lithium Americas Corp.
Number of significant projects	2

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Basis of Preparation and Presentation - Additional Information (Detail) - shares	12 Months Ended
	Dec. 31, 2017	Nov. 08, 2017
Basis Of Preparation And Presentation [Abstract]
Description of reason why using different reporting date	The Company changed its fiscal year end from September 30 to December 31, effective 2016, so the comparative period is the fifteen-month period from October 1, 2015 to December 31, 2016. The Company changed its year end in order to align it with the Joint Venture (as defined in Note 5) for reporting and planning purposes as well as to bring its financial reporting timetable in line with the other companies in the industry.
Share consolidation, number of outstanding common shares for each new common share		5
Date of consolidated financial statements approved for issuance	Mar. 28, 2018

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Significant Accounting Policies - Additional Information (Details)	12 Months Ended
	Dec. 31, 2017
Organoclay Plant
Significant Accounting Policies [Line Items]
Property plant and equipment, estimated useful life	20 years
Property, plant and equipment, depreciation method	straight-line basis
Buildings
Significant Accounting Policies [Line Items]
Property plant and equipment, estimated useful life	20 years
Property, plant and equipment, depreciation method	straight-line basis
Organoclay Plant Equipment
Significant Accounting Policies [Line Items]
Property, plant and equipment, depreciation method	straight line basis
Organoclay Plant Equipment | Bottom of Range
Significant Accounting Policies [Line Items]
Property plant and equipment, estimated useful life	5 years
Organoclay Plant Equipment | Top of Range
Significant Accounting Policies [Line Items]
Property plant and equipment, estimated useful life	20 years
Lithium Demo Plant Equipment
Significant Accounting Policies [Line Items]
Property plant and equipment, estimated useful life	10 years
Property, plant and equipment, depreciation method	straight-line basis
Office Equipment
Significant Accounting Policies [Line Items]
Property, plant and equipment, depreciation method	declining balance method
Property, plant and equipment, annual depreciation rate	20.00%
Other Equipment
Significant Accounting Policies [Line Items]
Property, plant and equipment, depreciation method	straight-line basis
Other Equipment | Bottom of Range
Significant Accounting Policies [Line Items]
Property plant and equipment, estimated useful life	7 years
Other Equipment | Top of Range
Significant Accounting Policies [Line Items]
Property plant and equipment, estimated useful life	15 years

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Cash and Cash Equivalents - Summary of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2015
Cash And Cash Equivalents [Abstract]
Cash	$ 6,319	$ 1,449
Short-term bank deposits	49,075	6,607
Cash and cash equivalents	$ 55,394	$ 8,056	$ 5,552

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Cash and Cash Equivalents - Additional Information (Details) $ in Thousands, $ in Thousands	Dec. 31, 2017 USD ($)	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 CAD ($)
Disclosure Of Cash And Cash Equivalents [Line Items]
Cash	$ 6,319		$ 1,449
Canadian Dollar
Disclosure Of Cash And Cash Equivalents [Line Items]
Cash		$ 5,898		$ 250
US Dollar
Disclosure Of Cash And Cash Equivalents [Line Items]
Cash	$ 421		$ 1,199
Bottom of Range
Disclosure Of Cash And Cash Equivalents [Line Items]
Percentage of interest on cash	0.25%	0.25%
Percentage of interest on short term bank deposits	1.00%	1.00%
Top of Range
Disclosure Of Cash And Cash Equivalents [Line Items]
Percentage of interest on cash	1.50%	1.50%
Percentage of interest on short term bank deposits	2.00%	2.00%

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Joint Venture - Additional Information (Details) $ in Thousands		1 Months Ended		12 Months Ended
	Mar. 28, 2016	Apr. 30, 2017 USD ($)	May 31, 2016 USD ($)	Dec. 31, 2017 USD ($) LoanAgreement ton
Disclosure Of Joint Ventures [Line Items]
One time payment in exchange of first 20 years of net profit interest				$ 3,500
One time payment in exchange of next 20 years of net profit interest				3,500
Grupo Minero Los Boros
Disclosure Of Joint Ventures [Line Items]
Payment for purchase option				50
Total consideration on right to exercise purchase option				6,000
Consideration payments in quarterly installments				100
Royalty payment upon the exercises the purchase option				$ 150
Net operating interest of exercises the purchase option				1.50%
Minera Exar
Disclosure Of Joint Ventures [Line Items]
Percentage of right to purchase share of production	50.00%
Escrow account contribution			$ 15,000
Escrow deposit amount			2,500
Escrow account amount released in current year		$ 833
Escrow account amount to be released on March 28, 2018			833
Escrow account amount to be released on March 28, 2019			833
Guarantee on transaction related costs			$ 354
Number of loan agreements | LoanAgreement				2
Loans to joint venture				$ 11,000
Annual royalty due				$ 100
Royalty expiration description				May of every year and expiring in 2041
Annual fees due in 2017 to 2021				$ 88
Annual fees due in 2021 to 2055				131
One time payment in exchange of first 20 years of net profit interest				7,000
One time payment in exchange of next 20 years of net profit interest				$ 7,000
Minera Exar | JEMSE Arrangement
Disclosure Of Joint Ventures [Line Items]
Rights granted to acquire equity interest in joint venture, percentage				8.50%
Rights granted to acquire equity interest in joint venture, value				$ 1
Minera Exar | Grupo Minero Los Boros
Disclosure Of Joint Ventures [Line Items]
Payment for purchase option				100
Total consideration on right to exercise purchase option				12,000
Consideration payments in quarterly installments				$ 200
Minimum production for the purchase option exercise | ton				20,000
Borrowings of joint venture				$ 12,000
Royalty payment upon the exercises the purchase option				$ 300
Royalty payment description				within 10 days of the commercial plant construction start date
Net operating interest of exercises the purchase option				3.00%
Net operation interest payable description				40 years, payable in pesos, annually within the 10 business days after calendar year end
Minera Exar | Cauchari Olaroz
Disclosure Of Joint Ventures [Line Items]
Increase in contribution towards develop, explore and operation of project				$ 13,300
Minera Exar | Loan Agreement One
Disclosure Of Joint Ventures [Line Items]
Loans to joint venture				$ 5,000
Borrowings, interest rate basis				12-month LIBOR plus 3% and is calculated on the basis of a 360-day year
Borrowings, interest rate				3.00%
Maturity period of borrowings				two years
Minera Exar | Loan Agreement Two
Disclosure Of Joint Ventures [Line Items]
Loans to joint venture				$ 6,000
Borrowings, interest rate basis				12-month LIBOR plus 10% and is calculated on the basis of a 360-day year
Borrowings, interest rate				10.00%
Maturity period of borrowings				fifteen years

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Joint Venture - Summary of Changes in Investments in Joint Ventures Initial Contribution (Details) - Minera Exar - USD ($) $ in Thousands		9 Months Ended	12 Months Ended
	Mar. 28, 2016	Dec. 31, 2016	Dec. 31, 2017
Disclosure Of Joint Ventures [Line Items]
50% of net asset value of Minera Exar	$ 13,276
50% of contribution for Joint Venture project development	5,000
Investment in Joint Venture. Balance	$ 18,276	$ 18,276	$ 13,136
Share of loss of Joint Venture		(3,987)	(4,850)
Translation adjustment		(1,153)	(2,127)
Contribution to Joint Venture by LAC			13,717
Elimination of unrealized gains on intercompany transactions			(239)
Investment in Joint Venture. Balance		$ 13,136	$ 19,637

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Joint Venture - Summary of Financial Statements Information of Joint Ventures (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended	15 Months Ended
	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 8,056	$ 55,394	$ 8,056	$ 5,552
Total current assets	10,399	61,218	10,399
Non-current assets	34,902	52,273	34,902
Current liabilities	(1,806)	(3,724)	(1,806)
Non-current liabilities	(1,072)	(1,000)	(1,072)
TOTAL ASSETS	45,301	113,491	45,301
Exploration expenditures		4,339	3,448
Depreciation		939	894
Loss from continuing operations		33,250	27,724
Minera Exar
CURRENT ASSETS
Cash and cash equivalents	3,119	9,198	3,119
Other current assets	1,281	2,410	1,281
Total current assets	4,400	11,608	4,400
Non-current assets	28,261	66,821	28,261
Current liabilities	(6,268)	(13,189)	(6,268)
Non-current liabilities	(121)	(26,323)	(121)
TOTAL ASSETS	26,272	38,917	$ 26,272
Exploration expenditures	8,060	8,898
Depreciation	24	213
Other expenses/(income)	(108)	589
Loss from continuing operations	$ 7,976	$ 9,700

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Property Plant and Equipment - Summary of Property Plant and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	$ 18,502
Additions	1,061	$ 703
Net book value at ending of the year	18,070	18,502
Cost
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	19,560	18,901
Additions	1,061	703
Write down	(399)
Disposition		(29)
Contribution to Joint Venture		(12)
Foreign exchange		(3)
Net book value at ending of the year	20,222	19,560
Accumulated Depreciation
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	1,058	188
Depreciation for the year	1,124	894
Disposition	(30)	(20)
Contribution to Joint Venture		(4)
Net book value at ending of the year	2,152	1,058
Land
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	386
Net book value at ending of the year	386	386
Land | Cost
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	386	371
Additions		15
Net book value at ending of the year	386	386
Buildings
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	2,065
Net book value at ending of the year	1,960	2,065
Buildings | Cost
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	2,141	1,957
Additions	2	184
Net book value at ending of the year	2,143	2,141
Buildings | Accumulated Depreciation
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	76
Depreciation for the year	107	76
Net book value at ending of the year	183	76
Equipment and Machinery
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	4,709
Net book value at ending of the year	4,779	4,709
Equipment and Machinery | Cost
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	5,156	5,068
Additions	805	88
Write down	(399)
Net book value at ending of the year	5,562	5,156
Equipment and Machinery | Accumulated Depreciation
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	447	112
Depreciation for the year	366	335
Disposition	(30)
Net book value at ending of the year	783	447
Organoclay Plant
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	11,064
Net book value at ending of the year	10,489	11,064
Organoclay Plant | Cost
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	11,495	11,149
Additions		346
Net book value at ending of the year	11,495	11,495
Organoclay Plant | Accumulated Depreciation
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	431
Depreciation for the year	575	431
Net book value at ending of the year	1,006	431
Other
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	278
Net book value at ending of the year	456	278
Other | Cost
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	382	356
Additions	254	70
Disposition		(29)
Contribution to Joint Venture		(12)
Foreign exchange		(3)
Net book value at ending of the year	636	382
Other | Accumulated Depreciation
Disclosure Of Property Plant And Equipment [Line Items]
Net book value at beginning of the year	104	76
Depreciation for the year	76	52
Disposition		(20)
Contribution to Joint Venture		(4)
Net book value at ending of the year	$ 180	$ 104

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Exploration and Evaluation Assets - Schedule of Exploration and Evaluation Assets (Details) - USD ($) $ in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Acquisition costs
Change in foreign exchange rate	$ (3,759)	$ 351
Exploration and Evaluation Assets
Acquisition costs
Total exploration and evaluation assets, beginning balance	1,447	42,623
Additions		560
Change in foreign exchange rate		(14,874)
Sale of 50% of net assets		(13,431)
Contribution to Joint Venture		(13,431)
Total exploration and evaluation assets, ending balance		1,447
Exploration and Evaluation Assets | Lithium Nevada
Acquisition costs
Total exploration and evaluation assets, beginning balance	1,447	958
Additions	706	489
Write offs	(49)
Total exploration and evaluation assets, ending balance	$ 2,104	1,447
Exploration and Evaluation Assets | Cauchari Olaroz
Acquisition costs
Total exploration and evaluation assets, beginning balance		41,665
Additions		71
Change in foreign exchange rate		(14,874)
Sale of 50% of net assets		(13,431)
Contribution to Joint Venture		$ (13,431)

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Exploration and Evaluation Assets - Additional Information (Details) $ in Thousands		12 Months Ended
	Nov. 17, 2016	Dec. 31, 2017 USD ($) Claim
Disclosure Of Exploration And Evaluation Assets [Line Items]
Percentage of royalty revenue		20.00%
Percentage of gross royalty revenue		8.00%
Cumulative payment		$ 22,000
Percentage royalty revenue, reduction		4.00%
Percentage of option to reduce royalty revenue		1.75%
Delmon Co Ltd
Disclosure Of Exploration And Evaluation Assets [Line Items]
Percentage of net royalty receivable	12.50%
Net royalty receivable term	7 years
Gross royalty receivable percentage	3.00%
Gross royalty receivable term	7 years
Smelter Royalty Payment Due on January 21
Disclosure Of Exploration And Evaluation Assets [Line Items]
Advance net smelter return royalty payment		$ 50
Percentage of net smelter return royalty		3.00%
Smelter Royalty Payment Due on November 15
Disclosure Of Exploration And Evaluation Assets [Line Items]
Advance net smelter return royalty payment		$ 2
Percentage of net smelter return royalty		1.50%
Number of mining claims | Claim		4

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Long-Term Borrowing - Schedule of Long-Term Borrowing (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current portion of long-term borrowings
Current portion of long-term borrowings	$ 178	$ 169
Long-term borrowings
Long-term borrowings	751	902
Borrowings	929	1,071
Promissory Note
Current portion of long-term borrowings
Current portion of long-term borrowings	130	125
Long-term borrowings
Long-term borrowings	703	833
Obligation Under Finance Leases
Current portion of long-term borrowings
Current portion of long-term borrowings	48	44
Long-term borrowings
Long-term borrowings	$ 48	$ 69

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Long-Term Borrowing - Additional Information (Details) $ in Thousands	1 Months Ended
	Jul. 31, 2013 USD ($)
Disclosure Of Detailed Information About Borrowings [Line Items]
Purchase price of property	$ 1,575
Payments for purchase of property	236
Remaining balance of transaction	$ 1,339
Promissory note, maturity term	10 years
Annual interest of promissory note for first five years	5.25%
Bottom of Range
Disclosure Of Detailed Information About Borrowings [Line Items]
Annual interest of promissory note for final five years	5.50%
Top of Range
Disclosure Of Detailed Information About Borrowings [Line Items]
Annual interest of promissory note for final five years	7.50%

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Issued Capital, Equity Compensation, and Warrants - Additional Information (Details) $ / shares in Units, shares in Thousands, $ in Thousands					12 Months Ended		15 Months Ended
	Dec. 22, 2017 shares	Nov. 27, 2017 shares	Sep. 14, 2017 shares	May 16, 2017 shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2017 CAD ($) shares	Dec. 31, 2016 USD ($) shares	Dec. 31, 2016 CAD ($) shares	Dec. 31, 2015 USD ($)	Dec. 31, 2017 $ / shares
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Credit facility					$ 929		$ 1,071
Financing costs related to the equity portion					1,755
Financing costs related to the debt portion					1,888
Accounts payable and accrued liabilities					$ 3,546		$ 1,637
Stock options granted | shares	30	60	1,860	100	3,085	3,085	1,873	1,873
Number of share options exercised | shares					1,073	1,073	1,602	1,602
Stock-based compensation expense					$ 11,412		$ 3,193
Weighted average exercise price of share options exercised						$ 2.22		$ 1.75
Directors, Officers and Employees
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Stock options granted | shares					3,085	3,085
Restricted Shares
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of shares granted | shares					1,589	1,589	873	873
Restricted Shares | Operating Expense
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Fair value of RSs recorded as a share-based payments expense					$ 6,989				$ 1,682
Restricted Shares | Cost of Sales
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Fair value of RSs recorded as a share-based payments expense					89
Restricted Shares | Inventory
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Fair value of RSs recorded as a share-based payments expense					1
Restricted Shares | 2018
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Fair value of RSs previously granted but not yet vested					748
Restricted Shares | 2019
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Fair value of RSs previously granted but not yet vested					183
Restricted Shares | 2020
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Fair value of RSs previously granted but not yet vested					$ 28
Deferred Share Units
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of shares granted | shares					73	73	9	9
Fair value of shares granted					$ 336
Cashless Exercise Provision Stock Option Plan
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of shares issued | shares					392		558
Number of share options exercised | shares					608	608	933	933
Stock-based compensation expense					$ 4,423		$ 1,511
Weighted average exercise price of share options exercised						$ 6.22		$ 4.25
Cashless Exercise Provision Stock Option Plan | 2018
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Fair value of options granted but not yet vested					3,052
Cashless Exercise Provision Stock Option Plan | 2019
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Fair value of options granted but not yet vested					224
Cashless Exercise Provision Stock Option Plan | Cost of Sales
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Stock-based compensation expense					65
Cashless Exercise Provision Stock Option Plan | Inventory
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Stock-based compensation expense					$ 50
Equity Incentive Plan
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Maximum term for stock option granted					5 years	5 years
Equity Incentive Plan | Restricted Shares
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of shares granted | shares					1,589	1,589
Fair value of shares granted					$ 7,883
Debt Issuance Costs
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Accounts payable and accrued liabilities					$ 1,361
Accrued Liabilities Reduction | Equity Incentive Plan | Restricted Shares
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of shares granted | shares					27	27
Operating Expenses | Equity Incentive Plan | Restricted Shares
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of shares granted | shares					1,562	1,562
Ganfeng
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of shares issued | shares					15,000
Credit facility					$ 125,000
Percentage of offtake entitlement					80.00%	80.00%
Off-take agreements term					20 years	20 years
Percentage of interest required in issued capital to nominate one individual.					17.50%	17.50%
Ganfeng | Bottom of Range
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Percentage of interest required in issued capital to nominate one individual.					15.00%	15.00%
BCP Innovation Pte Ltd
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of shares issued | shares					10,000
Par value per share | $ / shares										$ 4.25
Gross proceeds from common share					$ 80,999	$ 106,000,000
Ganfeng and Bangchak Investment Agreements
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Credit facility					205,000
Bangchak
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Credit facility					$ 80,000
Percentage of offtake entitlement					20.00%	20.00%
Off-take agreements term					20 years	20 years
Percentage of interest required in issued capital to nominate one individual.					16.40%	16.40%
Bangchak | Bottom of Range
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Percentage of interest required in issued capital to nominate one individual.					15.00%	15.00%

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Issued Capital, Equity Compensation, and Warrants - Summary of Changes to Number of Restricted Shares (Details) - Restricted Shares - shares shares in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Fair Value Measurement Of Equity [Line Items]
Number of shares outstanding balance	490
Number of shares granted	1,589	873
Number of shares converted into common shares	(521)	(383)
Number of shares forfeited	(8)
Number of shares outstanding balance	1,550	490

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Issued Capital, Equity Compensation, and Warrants - Summary of Changes to Number of Deferred Share Units (Details) - Deferred Share Units - shares shares in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Fair Value Measurement Of Equity [Line Items]
Number of shares outstanding balance	9
Number of shares granted	73	9
Number of shares converted into common shares	(41)
Number of shares outstanding balance	41	9

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Issued Capital, Equity Compensation, and Warrants - Summary of Fair Value of Stock Options Granted by Using Black-Scholes Option Pricing Model (Details) shares in Thousands						12 Months Ended	15 Months Ended
	Dec. 22, 2017 CAD ($) shares Year	Nov. 27, 2017 CAD ($) shares Year	Sep. 14, 2017 CAD ($) shares Year	May 16, 2017 CAD ($) shares Year	Apr. 04, 2017 CAD ($) shares Year	Dec. 31, 2017 shares	Dec. 31, 2016 shares
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of options granted (‘000’s) | shares	30	60	1,860	100		3,085	1,873
Exercise price per share (CDN$)	$ 11.07	$ 12.34	$ 8.05	$ 5.00
Risk-free interest rate	1.80%	1.60%	1.60%	0.70%
Expected life | Year	3	3	3	3
Annualized volatility	73.00%	66.00%	69.00%	72.00%
Fair value per stock option granted (CDN$)	$ 5.32	$ 5.52	$ 3.75	$ 2.35
Total fair value of stock options granted (CDN$)	$ 160,000	$ 331,000	$ 6,975,000	$ 235,000
Stock Option One
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of options granted (‘000’s) | shares					835
Exercise price per share (CDN$)					$ 4.90
Risk-free interest rate					0.70%
Expected life | Year					3
Annualized volatility					73.00%
Fair value per stock option granted (CDN$)					$ 2.10
Total fair value of stock options granted (CDN$)					$ 1,754,000
Stock Option Two
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of options granted (‘000’s) | shares					200
Exercise price per share (CDN$)					$ 4.90
Risk-free interest rate					0.70%
Expected life | Year					3
Annualized volatility					73.00%
Fair value per stock option granted (CDN$)					$ 2.10
Total fair value of stock options granted (CDN$)					$ 420,000

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Issued Capital, Equity Compensation, and Warrants - Summary of Stock Options Outstanding and Exercisable (Details) shares in Thousands	Dec. 31, 2017 CAD ($) shares Year	Dec. 31, 2016 CAD ($) shares	Sep. 30, 2015 CAD ($) shares
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of options outstanding | shares	5,306	3,424	3,466
Weighted average remaining contractual life of options outstanding (years) | Year	3.56
Weighted average exercise price of options outstanding	$ 4.85	$ 2.15	$ 2.15
Number of options exercisable | shares	3,323
Weighted average exercise price of options exercisable	$ 3.39
$1.35 - $1.50
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of options outstanding | shares	1,074
Weighted average remaining contractual life of options outstanding (years) | Year	1.75
Weighted average exercise price of options outstanding	$ 1.44
Number of options exercisable | shares	1,074
Weighted average exercise price of options exercisable	$ 1.44
$1.35 - $1.50 | Bottom of Range
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Exercise price of options outstanding	1.35
$1.35 - $1.50 | Top of Range
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Exercise price of options outstanding	$ 1.50
$1.70 - $1.90
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of options outstanding | shares	327
Weighted average remaining contractual life of options outstanding (years) | Year	1.57
Weighted average exercise price of options outstanding	$ 1.81
Number of options exercisable | shares	327
Weighted average exercise price of options exercisable	$ 1.81
$1.70 - $1.90 | Bottom of Range
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Exercise price of options outstanding	1.70
$1.70 - $1.90 | Top of Range
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Exercise price of options outstanding	$ 1.90
$2.35 - $3.75
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of options outstanding | shares	820
Weighted average remaining contractual life of options outstanding (years) | Year	3.12
Weighted average exercise price of options outstanding	$ 2.61
Number of options exercisable | shares	820
Weighted average exercise price of options exercisable	$ 2.61
$2.35 - $3.75 | Bottom of Range
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Exercise price of options outstanding	2.35
$2.35 - $3.75 | Top of Range
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Exercise price of options outstanding	$ 3.75
$4.80 - $5.00
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of options outstanding | shares	1,172
Weighted average remaining contractual life of options outstanding (years) | Year	4.19
Weighted average exercise price of options outstanding	$ 4.88
Number of options exercisable | shares	624
Weighted average exercise price of options exercisable	$ 4.87
$4.80 - $5.00 | Bottom of Range
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Exercise price of options outstanding	4.80
$4.80 - $5.00 | Top of Range
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Exercise price of options outstanding	$ 5.00
$8.05 - $11.05
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Number of options outstanding | shares	1,913
Weighted average remaining contractual life of options outstanding (years) | Year	4.72
Weighted average exercise price of options outstanding	$ 8.23
Number of options exercisable | shares	478
Weighted average exercise price of options exercisable	$ 8.23
$8.05 - $11.05 | Bottom of Range
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Exercise price of options outstanding	8.05
$8.05 - $11.05 | Top of Range
Disclosure Of Issued Capital Equity Compensation And Warrants [Line Items]
Exercise price of options outstanding	$ 11.05

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Issued Capital, Equity Compensation, and Warrants - Summary of Changes to Stock Options Outstanding (Details) shares in Thousands					12 Months Ended	15 Months Ended
	Dec. 22, 2017 shares	Nov. 27, 2017 shares	Sep. 14, 2017 shares	May 16, 2017 shares	Dec. 31, 2017 CAD ($) shares	Dec. 31, 2016 CAD ($) shares
Disclosure Of Changes To Stock Options Outstanding [Abstract]
Number of Options, Balance Outstanding | shares					3,424	3,466
Number of options granted (‘000’s) | shares	30	60	1,860	100	3,085	1,873
Number of Options, Exercised | shares					(1,073)	(1,602)
Number of Options, Expired | shares						(290)
Number of Options, Forfeited | shares					(130)	(23)
Number of Options, Balance Outstanding | shares					5,306	3,424
Weighted Average Exercise Price, Balance Outstanding | $					$ 2.15	$ 2.15
Weighted Average Exercise Price, Granted | $					7.01	2.30
Weighted Average Exercise Price, Exercised | $					2.22	1.75
Weighted Average Exercise Price, Expired | $						6.15
Weighted Average Exercise Price, Forfeited | $					5.20	2.25
Weighted Average Exercise Price, Balance Outstanding | $					$ 4.85	$ 2.15

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Issued Capital, Equity Compensation, and Warrants - Summary of Changes in Number of Share Purchase Warrants (Details) - Warrants shares in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017 CAD ($) shares	Dec. 31, 2016 CAD ($) shares
Disclosure Of Changes In Number Of Share Purchase Warrants [Line Items]
Number of shares outstanding balance | shares	1,867	3,555
Number of Warrants, Exercised | shares	(1,687)	(407)
Number of Warrants, Expired | shares	(180)	(1,282)
Number of shares outstanding balance | shares		1,867
Weighted Average Exercise Price, Balance | $	$ 4.35	$ 4.05
Weighted Average Exercise Price, Exercised | $	4.32	3.62
Weighted Average Exercise Price, Expired | $	$ 4.49	3.75
Weighted Average Exercise Price, Balance | $		$ 4.35

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Related Party Transactions - Additional Information (Details) - USD ($)			12 Months Ended
	Aug. 14, 2017	Aug. 13, 2017	Dec. 31, 2017
Disclosure Of Transactions Between Related Parties [Line Items]
Ownership interest in joint venture			50.00%
Contractual or other commitments from related party transactions			$ 0
Bottom of Range
Disclosure Of Transactions Between Related Parties [Line Items]
Percentage of remunerations payable in DSU's	50.00%
Top of Range
Disclosure Of Transactions Between Related Parties [Line Items]
Percentage of remunerations payable in DSU's	100.00%
Minera Exar
Disclosure Of Transactions Between Related Parties [Line Items]
Payment of base annual fee			75,000
Non Executive Directors
Disclosure Of Transactions Between Related Parties [Line Items]
Payment of base annual fee	$ 80,000	$ 35,000
Committee Chair
Disclosure Of Transactions Between Related Parties [Line Items]
Payment of base annual fee	13,000	5,000
Company's Audit Committee Chair
Disclosure Of Transactions Between Related Parties [Line Items]
Payment of base annual fee	18,000	10,000
Company's Board Chair Member
Disclosure Of Transactions Between Related Parties [Line Items]
Payment of base annual fee	40,000	25,000
Excess of Six Meetings Per Year
Disclosure Of Transactions Between Related Parties [Line Items]
Payment of base annual fee	$ 1,000	$ 1,000
Cauchari-Olaroz Project | Minera Exar | Magna Construcciones S.R.L
Disclosure Of Transactions Between Related Parties [Line Items]
Total construction services contract value			2,411,000
Construction services contract value own portion			$ 1,206,000
Minera Exar
Disclosure Of Transactions Between Related Parties [Line Items]
Ownership interest in joint venture			50.00%

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Related Party Transactions - Summary of Compensation of Key Management (Details) - USD ($) $ in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Related Party Transactions [Abstract]
Stock-based compensation	$ 2,507	$ 895
Bonuses - cash	1,425
Bonuses - stock-based	6,000	1,499
Salaries, benefits and directors fees included in general and administrative expenses	1,707	1,901
Salaries and benefits included in exploration expenditures	368	396
Salaries and benefits capitalized to Investment in the Joint Venture	127
Total remuneration	12,134	4,691
Total due to directors and executive team	$ 265	$ 411

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General and Administrative Expenses - Summary of Company's General and Administrative Expenses (Details) - USD ($) $ in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of General And Administrative Expenses [Line Items]
General and administrative expenses	$ 7,296	$ 6,448
Investor Relations
Disclosure Of General And Administrative Expenses [Line Items]
General and administrative expenses	63	253
Marketing
Disclosure Of General And Administrative Expenses [Line Items]
General and administrative expenses	565	875
Office and Administration
Disclosure Of General And Administrative Expenses [Line Items]
General and administrative expenses	743	741
Professional Fees
Disclosure Of General And Administrative Expenses [Line Items]
General and administrative expenses	926	886
Regulatory and Filing Fees
Disclosure Of General And Administrative Expenses [Line Items]
General and administrative expenses	403	112
Salaries, Benefits and Directors Fees
Disclosure Of General And Administrative Expenses [Line Items]
General and administrative expenses	3,746	2,619
Travel and Conferences
Disclosure Of General And Administrative Expenses [Line Items]
General and administrative expenses	799	493
Transaction Costs
Disclosure Of General And Administrative Expenses [Line Items]
General and administrative expenses		431
Depreciation
Disclosure Of General And Administrative Expenses [Line Items]
General and administrative expenses	$ 51	$ 38

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Commitments and Contingencies - Schedule of Other Commitments (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Disclosure Of Commitments [Line Items]
Rent of office spaces	$ 586
Not Later Than 1 Year
Disclosure Of Commitments [Line Items]
Rent of office spaces	276
Later Than 1 Year and Not Later Than 5 Years
Disclosure Of Commitments [Line Items]
Rent of office spaces	$ 310

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Exploration Expenditures - Summary of Company's Exploration Expenditures (Details) - USD ($) $ in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	$ 4,339	$ 3,448
Drilling
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	1,195
Engineering
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	14	251
Environmental
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	279	83
Geological and Consulting
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	1,871	2,254
Field Supplies, Other Services, and Taxes
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	868	720
Lithium Demo Plant Equipment Depreciation
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	112	140
Lithium Nevada
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	3,868	2,472
Lithium Nevada | Drilling
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	1,195
Lithium Nevada | Engineering
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	14	169
Lithium Nevada | Environmental
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	279	83
Lithium Nevada | Geological and Consulting
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	1,871	1,800
Lithium Nevada | Field Supplies, Other Services, and Taxes
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	397	280
Lithium Nevada | Lithium Demo Plant Equipment Depreciation
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	112	140
Cauchari Olaroz
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	471	976
Cauchari Olaroz | Engineering
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures		82
Cauchari Olaroz | Geological and Consulting
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures		454
Cauchari Olaroz | Field Supplies, Other Services, and Taxes
Disclosure Of Exploration Expenditures [Line Items]
Exploration expenditures	$ 471	$ 440

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Segmented Information - Additional Information (Details)	12 Months Ended
	Dec. 31, 2017 Segment
Disclosure Of Operating Segments [Abstract]
Number of operating segments	3
Number of geographic segments	4

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Segmented Information - Summary of Reportable Segments (Details) - USD ($) $ in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Operating Segments [Line Items]
Property, plant and equipment	$ 18,070	$ 18,502
Exploration and evaluation assets	2,104	1,447
Total assets	113,491	45,301
Total liabilities	(4,724)	(2,878)
Property, plant and equipment expenditures	1,061	703
Sales	4,290	1,154
Inventory write-down	774	648
Net loss	33,250	27,724
Exploration expenditures	4,339	3,448
Depreciation	939	894
Organoclay research and development	423	536
Cauchari Olaroz
Disclosure Of Operating Segments [Line Items]
Exploration expenditures	471	976
Operating Segments | Organoclay Plant
Disclosure Of Operating Segments [Line Items]
Property, plant and equipment	17,011	17,450
Total assets	19,745	18,585
Total liabilities	(1,323)	(1,513)
Property, plant and equipment expenditures	891	681
Sales	4,290	1,154
Inventory write-down	774	648
Net loss	3,043	2,871
Depreciation	776	720
Organoclay research and development	423	536
Operating Segments | Lithium Nevada Project
Disclosure Of Operating Segments [Line Items]
Property, plant and equipment	1,018	1,033
Exploration and evaluation assets	2,104	1,447
Total assets	3,642	3,056
Total liabilities	(896)	(291)
Property, plant and equipment expenditures	143	14
Net loss	5,183	3,335
Exploration expenditures	3,868	2,472
Depreciation	157	168
Operating Segments | Cauchari Olaroz
Disclosure Of Operating Segments [Line Items]
Total assets	19,637	13,136
Property, plant and equipment expenditures		2
Net loss	4,850	3,987
Exploration expenditures	471	976
Corporate
Disclosure Of Operating Segments [Line Items]
Property, plant and equipment	41	19
Total assets	70,467	10,524
Total liabilities	(2,505)	(1,074)
Property, plant and equipment expenditures	27	6
Net loss	20,174	17,531
Depreciation	$ 6	$ 6

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Segmented Information - Schedule of Non-current Assets and Revenue by Geographical Segment (Details) - USD ($) $ in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
NON-CURRENT ASSETS
Non-current assets	$ 39,811	$ 33,085
Revenue
ORGANOCLAY SALES	4,290	1,154
Canada
NON-CURRENT ASSETS
Non-current assets	41	19
United States
NON-CURRENT ASSETS
Non-current assets	19,377	19,062
Revenue
ORGANOCLAY SALES	4,290	1,154
Germany
NON-CURRENT ASSETS
Non-current assets	756	868
Argentina
NON-CURRENT ASSETS
Non-current assets	$ 19,637	$ 13,136

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Supplemental Disclosure with Respect to Cash Flows - Supplementary Disclosure of Company's Non Cash Transactions (Details) - USD ($) $ in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Supplemental Information With Respect To Cash Flows [Abstract]
Accounts payable related to property, plant and equipment	$ 28	$ 50
Assets acquired under finance leases	29
Accounts payable related to inventories	197	197
Accounts payable related to financings	1,611	175
Deferred financings costs	1,361
Accounts payable for salaries settled with DSUs and RSs	290
RSs and DSUs granted in lieu of deferred salaries and directors’ fees	81	80
Interest/finance charges paid	$ 52	$ 77

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Income Taxes - Summary of Reconciliation of Income Taxes at Canadian Statutory Rates with Reported Taxes (Details) - USD ($) $ in Thousands	12 Months Ended	15 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of Accounting Profit Multiplied by Applicable Tax Rates [Line Items]
Loss for the period	$ (33,250)	$ (27,724)
Expected income tax recovery	(8,645)	(7,208)
Items not deductible for income tax purposes	3,612	1,010
Effect of change in deferred income tax rate	3,964
Effect of lower (higher) tax rate in foreign jurisdiction	(25)	(647)
Change in unrecognized deferred tax assets and other	$ 1,094	3,567
Minera Exar
Reconciliation of Accounting Profit Multiplied by Applicable Tax Rates [Line Items]
Loss of sale of 50% interest in Minera Exar		$ 3,278

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Income Taxes - Summary of Reconciliation of Income Taxes at Canadian Statutory Rates with Reported Taxes (Parenthetical) (Details)	12 Months Ended
	Dec. 31, 2017
Reconciliation of Accounting Profit Multiplied by Applicable Tax Rates [Line Items]
Ownership percentage in Minera Exar	50.00%
Minera Exar
Reconciliation of Accounting Profit Multiplied by Applicable Tax Rates [Line Items]
Ownership percentage in Minera Exar	50.00%

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Income Taxes - Summary of Significant Components of Company's Unrecognized Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure of Temporary Difference Unused Tax Losses and Unused Tax Credits [Line Items]
Tax loss carryforwards	$ 15,858	$ 15,108
Tax Loss Carryforwards
Disclosure of Temporary Difference Unused Tax Losses and Unused Tax Credits [Line Items]
Tax loss carryforwards	14,359	12,634
Exploration and Evaluation Assets
Disclosure of Temporary Difference Unused Tax Losses and Unused Tax Credits [Line Items]
Tax loss carryforwards	124	1,350
Financing Costs
Disclosure of Temporary Difference Unused Tax Losses and Unused Tax Credits [Line Items]
Tax loss carryforwards	573	424
Capital Assets
Disclosure of Temporary Difference Unused Tax Losses and Unused Tax Credits [Line Items]
Tax loss carryforwards	238	607
Other
Disclosure of Temporary Difference Unused Tax Losses and Unused Tax Credits [Line Items]
Tax loss carryforwards	$ 564	$ 94

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Income Taxes - Additional Information (Details) $ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 CAD ($)
Major Components Of Tax Expense Income [Abstract]
Non-capital loss carryforwards	$ 34,500	$ 33,500	$ 22,700	$ 24,200
Non-capital loss carryforwards expiration year period	between 2028 – 2037

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Financial Instruments - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2015
Disclosure Of Financial Instruments [Line Items]
Cash and cash equivalents	$ 55,394	$ 8,056	$ 5,552
Current liabilities	3,724	1,806
Cash and cash equivalents held in USD	49,496
Credit Risk
Disclosure Of Financial Instruments [Line Items]
Amount on receivables, prepaids and deposits	105
Cash and cash equivalents	55,394	8,056
Current liabilities	3,724	$ 1,806
Credit Risk | Prepaids and Deposits
Disclosure Of Financial Instruments [Line Items]
Credit sales receivables	$ 399

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Financial instruments - Summary of Maturities for Financial Liabilities on Undiscounted Basis (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	$ 4,609
2018
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	3,770
2019
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	221
2020 and Later
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	618
Accounts Payable and Accrued Liabilities
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	3,546
Accounts Payable and Accrued Liabilities | 2018
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	3,546
Long-term Borrowing
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	962
Long-term Borrowing | 2018
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	172
Long-term Borrowing | 2019
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	172
Long-term Borrowing | 2020 and Later
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	618
Obligation Under Finance Leases
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	101
Obligation Under Finance Leases | 2018
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	52
Obligation Under Finance Leases | 2019
Disclosure Of Maturity Analysis For Nonderivative Financial Liabilities [Line Items]
Financial liabilities on undiscounted basis ,Total	$ 49

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Subsequent Events - Additional Information (Details) - Shelf Prosectus Filed After Reporting Period	Feb. 07, 2018 USD ($)
Top of Range
Disclosure Of Nonadjusting Events After Reporting Period [Line Items]
Debt and equity securities distribution	$ 500,000,000
Canada
Disclosure Of Nonadjusting Events After Reporting Period [Line Items]
Shelf prospectus maturity period	25 months