Analyst Note
| Seth Goldstein |Lithium Americas announced its agreement to fully acquire Arena Minerals that values Arena's equity at $227 million in an all-stock deal. Through the deal, Arena Minerals shareholders will receive ownership of 5.7% of Lithium Americas. Arena Minerals has a majority (65%) stake in a developing lithium brine asset, Sal de la Puna, which neighbors Lithium Americas’ Pastos Grandes project. Both projects are located next to one another in the Salar de Pastos Grandes. Lithium Americas plans to consolidate the two projects into one and aims for an annual production capacity of 40,000 metric tons. Having updated our model to incorporate the deal, we maintain our $65 (CAD 88) per share fair value estimate. Our no-moat rating is unchanged.