Lithium Americas Corp (LAAC)

[Psyban]

LAC = Cormark's Top Lithium Pick Target C$1.70

Page 1. Cormark Report Highlights
August 29, 2016

Investment Thesis:
Lithium Americas remains our preferred way to play lithium given its partnered
with SQM (SQM-N, not rated) and well on its way to bring Cauchari into
production (target 2019). Located adjacent to and in the same basin as
Orocobre’s (ORL-T, C$5.00 target, Market Perform rating) Olaroz project, we
see a compelling value proposition from bringing online this new, low-cost
source of supply at a time when EV-driven demand for lithium is expected to
take off.

Highlights:

• SQM Provides An Update On Cauchari’s Development Plan
Last week, SQM provided an update on its plan to develop the Cauchari JV
with LAC. The update follows our trip to SQM’s Atacama project last month
and further reinforces our positive view on SQM’s ability as operator and
Cauchari’s appeal as a core part of SQM’s lithium growth strategy.

• Increases Production In Two-Staged Approach, Lowers Upfront Capex
(1) Cauchari is now targeted to produce 50 ktpa of lithium carbonate (from 40
ktpa previously). (2) Production is expected in two stages of 25 ktpa each. (3)
Stage 1 capex is estimated at $425 MM ($212.5 MM for LAC’s interest) with an
additional $250 MM for Stage 2. (4) Full Stage 1 production is targeted by
2019. (5) SQM expects operating costs to come in at the low end of the cost
curve.

• Raising Target To C$1.70 From C$1.60, Reiterating Top Pick Rating
We see the SQM update, incorporating over five months of engineering work
since the JV was first signed, as a major step forward in defining Cauchari’s
development plan. With increased confidence in the project’s scale/approach
and early construction work (road, work camp) now accelerating, we expect
LAC’s focus to turn toward its wide array of financing options (e.g. battery
suppliers, automotive OEMs).