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Date

Monday, Aug. 11, 2025, at 10 a.m. ET

Call participants

  • Chief Executive Officer — Sam Pigott
  • Chief Financial Officer — Alex Shoga

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Takeaways

  • Production volume-- Lithium carbonate output reached 8,500 tons in Q2 2025, operating at 85% of nameplate capacity, with total first-half 2025 production of 15,700 tons.
  • Revenue-- Revenue increased in Q2 2025 compared to Q1 2025, despite an 8% decline in average realized price to $7,400 per ton. Higher production volume offset the impact of the price decline.
  • Operating cost-- Unit costs dropped approximately 8% quarter over quarter to $6,100 per ton, now below the latest feasibility study estimates.
  • Price discount-- CEO Sam Pigott said the discount to the reference price is approximately $2,000, very similar to what was achieved in Q1 2025, and is attributable to taxes and reprocessing fees.
  • Secured financing-- A new $120 million in bank facilities was arranged at Kachari Olaroz to support working capital and refinance $108 million in short-term debt maturing within twelve months.
  • Production guidance-- Management reiterated confidence in achieving full-year 2025 guidance of 30,000 to 35,000 tons of lithium carbonate.
  • Growth target-- The strategic goal is over 200,000 tons per year of lithium carbonate equivalent capacity, including approximately 150,000 tons from consolidating the Pozuelos and Pastos Grandes basins with Ganfeng as part of the regional development plan in Salta. A feasibility study is expected to be completed by year-end.
  • Operational efficiency-- CEO Pigott said, "these optimization efforts are structural ... part of our transition to a steady-state operator."
  • Customer offtake-- The vast majority of product is "under offtake ... goes to Ganfeng," according to CEO Pigott, with several weeks' pricing lag reported by Sam Pigott.
  • Stage two expansion-- Stage two of Kachari Olaroz is expected to add an additional 40,000 tons of production capacity.
  • Feasibility study and consolidation-- Management expects completion of the consolidation feasibility study for Pozuelos and Pastos Grandes by year-end and to provide a formal update soon.

Summary

Management attributed improved operating and financial performance in Q2 2025 to higher lithium carbonate production volumes and structural cost reductions, which offset ongoing market price declines. Both executives highlighted securing $120 million in new credit facilities to refinance short-term debt and support working capital needs, underscoring the company’s focus on balance sheet strength. The partnership with Ganfeng was emphasized as vital to advancing regional consolidation efforts and achieving an ambitious long-term capacity target exceeding 200,000 tons per year. Expansion plans include the upcoming completion of a major feasibility study by year-end and the addition of 40,000 tons of capacity at Kachari Olaroz. The operational model -- marked by a high proportion of Ganfeng-linked offtake and a multi-week pricing lag -- is presented as resilient to market volatility.

  • CEO Pigott expressed confidence in weathering low market prices, citing the company's growth strategy targeting over 200,000 tons per year of low-cost lithium production.
  • Sam Pigott clarified that most of the price-to-reference discount remains stable quarter over quarter and consists of taxes and reprocessing costs.
  • Depreciation, logistics, and other costs -- incurred after commercial production began in Q4 of last year -- explain why the cost of goods sold has not declined at the same pace as cash operating costs.
  • Volume production and quality improvements are prioritized over short-term price optimization as the company advances plans to supply non-China customers in the coming years.
  • Stage two expansion, regional project consolidation, and ongoing customer discussions are core drivers of the company’s stated platform for scalable, long-term growth.

Industry glossary

  • Nameplate capacity: Maximum designed production output of a facility under specific conditions.
  • Offtake: An agreement granting a customer the right to purchase a specified portion of production, often prior to construction or commissioning.
  • Cash COGS: Cash cost of goods sold, excluding non-cash items like depreciation and amortization, used to assess operating efficiency.
  • Brine operation: Lithium extraction method utilizing mineral-rich brine pumped from underground reservoirs, known for lower cost profiles compared to hard rock mining.
  • Salars: Expansive salt flats, typically in South America, containing substantial lithium-rich brine deposits.

Full Conference Call Transcript

Sam Pigott: Good morning, everyone. Thank you for joining us. We will begin on Slide three with a review of key highlights and milestones from the second quarter. At Kachari Olaroz, we delivered strong operational results with higher production volumes and lower costs quarter over quarter. With the completion of the first half, we feel confident in reaching our full-year production guidance of 30,000 to 35,000 tonnes. We also strengthened our financial position, securing $120 million in new bank facilities at Kachari Olaroz to support working capital as operations advance. Together with our partner Ganfeng, we made meaningful progress towards consolidating the Pozuelos, Pazos Grande's basins.

We expect to give the market an update shortly as we work diligently to position these assets for long-term growth and to develop a platform for what is expected to be one of the largest lithium operations globally.

On slide four, we delivered solid performance in the second quarter. You can see a summary of the key operating financial metrics. Revenue increased despite softer market prices, reflecting the benefit of higher output. The team has done an excellent job executing safely and efficiently, and during the second quarter, the operations consistently produced 85% of nameplate capacity, delivering 8,500 tons of lithium carbonate for the second quarter and 15,700 tons in the first half. While market prices have been quite volatile in recent weeks, we realized an average price of $7,400 for the second quarter, an 8% decrease compared to the first.

We emphasize the reduction of costs quarter on quarter, and turning to the next slide, we will discuss this in more detail.

In the second quarter, we brought operating costs down approximately 8% compared to the first quarter, reaching $6,100 per tonne. This decrease is a function of many different cost reduction efforts across the operation. They are structural, long-term changes and part of our transition to a steady-state operator. We are quite proud of these optimization efforts, which bring our current cost below the latest feasibility study estimates. The scale and quality of Kachari Olaroz, coupled with efficient and low production cost, reinforces our position as a resilient producer that is able to sustain profitability across market cycles.

Moving to slide six. In recent months, we have seen increased volatility in lithium prices. Today, prices are just over $10,000 per ton. We do not believe that these lower prices are sustainable, given strong global growth and the need for new supply, which is often significantly higher cost. We have positioned the business to withstand a lower-for-longer price environment and remain focused on what we can control, namely safe, low-cost, and reliable operations. We believe this environment favors low-cost brine operations, which are well-positioned on the cost curve and able to execute and grow through the cycles.

On slide seven, we have outlined our platform for growth. As we look ahead, we are excited by the scale of opportunity emerging across our platform in Argentina. Our growth strategy targets over 200,000 tons per year of lithium carbonate equivalent capacity, leveraging both expansion at our producing operation and at regional growth projects with Ganfeng. Through consolidating our projects in the Pozuelos and Patos Grande's basins, we are targeting approximately 150,000 tons of capacity. We have made significant progress in advancing the regional development plan in Salta. Very soon, we expect to combine these three high-quality assets that together cover two entire Salars, something unique in our industry.

This positions us to participate in what is expected to be one of the largest lithium projects in the world, with the benefits of scale and advanced technology. This partnership will allow Lithium Argentina AG and Ganfeng to bring together their respective strengths in large-scale brine development, building on the capabilities and collaboration already proven at Kachari Olaroz. We expect to have an update shortly on the consolidation and a feasibility study complete by the end of the year. Both Lithium Argentina AG and Ganfeng are working together to advance financing plans, including project debt and potential minority equity investments from customers.

In addition to our regional growth plans, stage two of Kachari remains a key component of the pipeline, expected to contribute an additional 40,000 tons. Our approach is to create a more efficient operating structure that harnesses new technologies, economies of scale, and builds off our track record at Kachari Olaroz. As we advance these longer-term growth initiatives, we are focused on strengthening the balance sheet while preserving and maximizing shareholder value.

In closing, on slide eight, we remain focused on executing our core priorities: unlocking value, operational efficiency, and financial flexibility. Looking ahead to the second half of the year, our priorities are clear. At Kachari Olaroz, our focus is on continuing our efficient operations and maintaining our position as one of the lowest-cost producers in the industry. We plan to advance the unified development plan for Pozuelos Patos Grande's basins, positioning this world-class asset for long-term scalable growth. At the corporate level, we continue to strengthen our balance sheet and preserve financial flexibility without diluting shareholders. Above all, we will execute with discipline, focus on delivering against our targets, and ensure we close out 2025 in a position of even greater strength and opportunity. Thank you for your continued support.

And with that, I think we will open up to questions.

Operator: At this time, if you would like to ask a question, press star, then the number one on your telephone keypad. To withdraw your question, simply press star 1 again. We kindly ask that you limit your questions to one and one follow-up for today's call. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Katie Le Chapelle with Canaccord Genuity. Please go ahead.

Katie Le Chapelle: Hi, Sam and team. Congrats on a good quarter. I just want to talk about the surge in lithium prices overnight on reports of China shutting down one of their major mines. We have seen a number of news outlets suggest that this is not only necessarily a permit-related action but could be part of a broader push by the government to address overcapacity and domestic competition, which has been leading to some price volatility. I would just be curious about your view on China's anti-involution policies specifically, and how do you see these measures impacting the lithium market and the potential longevity of the recent price moves?

Sam Pigott: Thanks, Katie. We have been following these developments very closely. I mean, I think this anti-involution policy is not just specific to lithium but looking across industries and trying to reduce the amount of rapid competition that is ongoing. So it is something we are monitoring. I do not think we have anything novel to contribute to the discussion around that. I think from our position and the strategy with the business is that we have set this business up to manage price volatility. I think in Q2, this was evidenced in where our costs came in, really focused on ensuring that we can get through any price environment. So, yeah, we are very pleased with where costs are.

Obviously, if we got some support from pricing, that is great. But, again, we have set this business up to withstand this volatility. I would say it is a more general comment, and it is something that I think the industry has been talking a lot about over the past twelve months. It is just the view that pricing that we have experienced so far this year is really unsustainable in the long term. Looking at kind of demand expectations and the need for new supply, where pricing is right now, we just think pricing is long-term unsustainable. As to the short-term nature, I think it is not for us to comment.

Katie Le Chapelle: Great. And then maybe a follow-up on the regional growth strategy. As both Kachari as well as Salta, are there specific project milestones that need to be achieved to make a formal investment decision on either of those projects? What market signals are you guys waiting on to make a go-ahead decision there?

Sam Pigott: So, I mean, first and foremost, we are still kind of pushing ahead with the feasibility study, which is expected to be complete this year. I think prior to that, we plan to, in the very near term, disclose a plan for how we are going to consolidate all of these assets with a view to participating as LAR in one of the largest lithium projects globally. So it is extraordinarily exciting. In terms of a formal investment decision, I mean, the feasibility study needs to be complete.

Beyond that, we have had preliminary discussions with certain customers, and there is a lot of interest to participate in very large, high-quality brine projects, particularly based on the track record that we have been able to demonstrate at Kachari. So I think a formal decision on going ahead will have to wait for certainly the feasibility study. But for us, it is important to grow but important to also manage our balance sheet and look at non-dilutive measures in order to finance growth projects.

Katie Le Chapelle: Got it. Again, guys, and congrats on a good quarter.

Operator: Your next question comes from the line of Corinne Blanchard with Deutsche Bank. Please go ahead.

Corinne Blanchard: Hey. Good morning. Thank you for taking my question. Two questions. Can you talk about the pricing discount that you receive on the spot and how that compares versus Q1 and maybe what you are thinking you could be getting for the rest of the year? And then the other question is on the cost. I mean, you obviously did a great job here and had quite a significant decrease quarter over quarter. How much more can we expect going into Q3 and Q4 in 2026? Or do you think you have reached kind of your run rate at $6,100 per ton? Thank you.

Sam Pigott: Sure. So addressing your first question, the discount to the reference price is approximately $2,000, so very similar to what was achieved in Q1. That reflects, obviously, taxes as well as a reprocessing cost for the material in China. I think this year, last year was all about ramping up. This year is about operation stability at much higher production volumes. And so we are seeing product stability improve, and we expect that to continue through Q3 and Q4. So there may be room to reduce that reprocessing fee, but I think from our perspective, the focus really is on volumes and cost.

And if we can deliver on those, then I think the product quality will also improve throughout the end of the year. I think it is important to note, like, we are very much aligned with Ganfeng in terms of being able to supply customers with our product, global customers. So these are customers outside of China. Going into '26 and certainly going into '27. So it is a high priority. And we will have more to disclose on that certainly into next year.

On the cost side, yeah, I mean, we have been very focused on costs. I think every company in the lithium industry has been for very good reason. We continue to be some of, you know, a lot of these cost reduction efforts are a function of entering into steady-state operations. Last year during a ramp-up, it is really hard to kind of, in a sense, freeze things and really take serious efforts to optimize while you are ramping up. This year, that is exactly what we are doing. And the cost savings we have achieved, there is not one single bucket that kind of represents a significant portion. It is kind of spread over a number of different initiatives.

And these are structural. So they are long-term. I think going forward, there will be probably some volatility through this year in terms of where costs are just as a function of these optimization efforts, but the trend is certainly one that we expect to continue through 2026.

Operator: Your next question comes from the line of Joel with BMO Capital Markets. Please go ahead.

Joel: Hi, Sam and team. So I see your answer to the last question. So cash COGS were down $600 a ton, like you said, but, you know, reported COGS were about flat. Is that because of reprocessing costs? And then so the $600 ton cash cost savings not flow through the end? I am sort of confused if I missed that. Sorry. Alex, do you want to take that one on?

Alex Shoga: Sorry, Joel. Your question with respect to the discount. The discount. Yeah. Your COGS, the JV COGS divided by a ton was flat quarter over quarter. But your cash COGS per ton as you disclose it are down to $200 a ton. So I was trying to understand the difference between the two. Why was the COGS divided by 10 flat quarter to quarter? Cash COGS down. Thanks. Yeah. I need to remember that cost of sales are also enclosed depreciation. We started depreciation in Q4 of last year when we reached commercial production. So that is one item. And then in addition, we have some logistics costs and some other costs that are included in cost of sales.

But mostly, depreciation impacted the cost was a bit higher in Q2, which sort of resulted in a bit higher cost of sales than, I guess, cash costs.

Joel: Okay. And then, I guess, I am going to sneak a two-part question to my second question. So the first part would be, kind of visibility do you have into Q3 and Q4 in terms of your order book? Obviously, as Sam said, prices have been whipsawing all over, in China now for the last month and a half. Including today. So kind of and I know you have some reprocessing, which and, again, I do not know if that adds a bit of length to your order book, what kind of is going on that? And on cost, should we expect on a COGS to be similar in Q3 cash and normal?

And then, second part of that question would be, know, Sam, what are your thoughts here? You know, Q2 is the bottom of the market. You came in, probably the JV came in maybe slightly negative free cash flow. Maybe you can comment on that. You know, what does that think about your business? Here across the cycle? Thanks.

Sam Pigott: Yeah. I mean, costs. Yeah. I think expecting costs with, you know, some minor variability in Q3, Q4 on what we experienced in Q2 is probably a fair way to assess it. Cost of goods sold, I mean, Alex, really a function of depreciation. The delta between that and operating costs.

Alex Shoga: Yeah. I think cost of sales per ton will generally follow on a cash cost per ton in next quarters.

Sam Pigott: And then in terms of, you know, in terms of the order book, I mean, the vast majority of our product is under offtake. And the vast majority of that goes to Ganfeng. And so it is, you know, it is all well spoken for. I think there is very strong, obviously, very strong demand from Ganfeng pulling that material through.

Joel: So, yeah, extra. Is that, like, a one-month lag, Sam, a two-month lag, a three-month lag? How should we think about just in terms of the pricing flow through? Like, what the kind of benchmark price that we could we see in the on the indices, these things, features, and I do not know.

Sam Pigott: What have you disclosed on that?

Alex Shoga: I think we do have some lag. I would say several weeks of lag on average.

Joel: And how the business did in Q2 at the bottom?

Sam Pigott: Yeah. I mean, we are obviously very, you know, very happy with where the business is today and where we expect it to be over the next six months, twelve months, eighteen months. Like, this is a world-class operation that has, you know, some of the lowest costs in the industry. And, you know, we obviously, this even with realized pricing being at $7,400 on an operating basis, we were, you know, very marginally operating had a marginal operating profit. I think beyond that, the free cash flow that you referred to is largely tied into working capital, which is necessarily higher in Q1 and Q2 given the increased volume production.

And I think as we spoke to on the last call in terms of the cadence of production first half versus second half, you know, we still expect the second half to be the larger volume half of the year.

Operator: Your next question comes from the line of Mohamed Sidibe with National Bank Financial. Please go ahead.

Mohamed Sidibe: Morning, everyone. Just a follow-up question on the price discount that you have seen. And in the past, you have guided to that $22,000 per ton to $2,100 per ton. Is that something that we should still expect for 2025? And then, Jess, if you could help us reconcile, you know, the price realized to, call it, the lithium carbonate average price of $9,000 per ton. I think maybe it gets to do with Joel's question around the lag on the sales price received. Thank you.

Sam Pigott: Yeah. The discount was approximately $2,000. I mean, that is comprised of about a 50% fixed, 50% variable associated with taxes. You know, I think Ganfeng and LAR are very aligned in what we want to accomplish this year, which was really getting volume production up, ensuring that operations stabilize at these higher levels, and then driving cost down. So that has been the priority this year. I think this going into 2026 and 2027, given that we are both aligned in the ability to supply global customers outside of China with our product, you know, the focus will shift.

So for the remainder of the year, I think the pricing discount that we are receiving today is likely to continue going into 2026. You know, I think the priorities and the focus of both Ganfeng and LAR will shift to be able to provide those customers ex-China with product.

Mohamed Sidibe: Sounds good. Thanks. And then just, I guess, maybe a reconciliation between that realized pricing and the average price for lithium carbonate during the quarter. Any color on that would be helpful, and I am happy to take it offline if that is more of a question for offline. I do not know, Alex. Do you want to handle that, or you want to handle it offline?

Alex Shoga: So I will just make a comment as I mentioned that there is a lag of several weeks, you know, between production, pricing, and shipment. That is why a change in spot price is not reflected immediately in our results. It is, you know, there are several weeks of delay. But, yeah, we are happy to provide some more details maybe offline.

Mohamed Sidibe: Great. Thank you. And just a final question on the third-party debt. At XR. Just a $108,000,000 that is due within the next twelve months. What are your expectations around that? Should we expect some potential refinancing of that, or do you expect to pay that down using some of the available credit that you have? Thank you.

Sam Pigott: Alex, feel free to answer that.

Alex Shoga: Yeah. Sure. As Sam mentioned, we managed to secure a $120 million loan facilities in Q2. So we expect to use those facilities to refinance that short-term debt that is coming due.

Mohamed Sidibe: Thanks, guys.

Operator: Your next question comes from the line of Ben Isaacson with Scotiabank. Please go ahead.

Ben Isaacson: Thank you very much, and good morning, everyone. So a question on your partner, Ganfeng. You know, just looking at the slide, it looks like Ganfeng is going to be involved in not only the pipeline but in the regional development plan as well. Can you talk about their financial health as your partner? If prices were not to change from where they have been the last kind of six months in that, you know, mid $8,000 area, would Ganfeng be able to continue funding and developing its proportionate share of these projects? Would it does it rank other projects higher than the ones with LAR?

Can you just talk about what the thought process is with respect to Ganfeng as a partner in a period of sustained pressure on pricing and profitability for them? Thank you.

Sam Pigott: Yeah. Be careful not to put words into Ganfeng's mouth, but, you know, I think addressing some of these questions out of order. One, Argentina ranks extraordinarily high in terms of Ganfeng's focus outside of China. And I think what we have been able to deliver at Kachari Olaroz only kind of supports and emboldens that strategy. You know, obviously, we are very pleased with where costs are coming in Q1 and Q2. Ganfeng is, you know, relentless in terms of driving down costs, and they see considerably more to do on that front. And then in terms of their financial health, you know, Ganfeng does have access to a lot of capital in China.

They also have tremendous relationships with their downstream customers who I think are, you know, are interested in being able to minimize the risks that I think a lot of people see in two, three years. Certainly, if prices remain where they are now, you know, I think there is a high probability that there could be, you know, certainly market balance, potentially market shortage. And so some of their customers are very supportive of Ganfeng's efforts to kind of de-risk the supply chain, bring on low-cost projects like Kachari Olaroz that can kind of be resilient through the bottom of a cycle.

So I would say they do prioritize Argentina as one of their kind of top jurisdictions for investment. I think they do have access to quite a bit of capital in China. And so their appetite is there. Obviously, you know, if prices were to fall dramatically, I think it would give everybody continued pause in terms of investment. But, you know, Ganfeng is certainly a tremendous partner to have. They have great relationships with global customers. They have a keen understanding of, you know, cost curves and where they want to invest. And so I think we are very well positioned with them.

With our platform in Argentina that has kind of a pipeline that can get us to over 200,000 tons of production of low-cost lithium units.

Ben Isaacson: Great. Thank you.

Operator: Thanks, Ben. That concludes our question and answer session. Ladies and gentlemen, this will conclude today's call. Thank you all for joining. You may now disconnect.