Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) and Arena Minerals Inc. (TSX-V: AN) are pleased to announce that they have entered into a definitive arrangement agreement pursuant to which Lithium Americas has agreed to acquire all of the issued and outstanding common shares of Arena not already owned by Lithium Americas by way of a plan of arrangement. Pursuant to the Arrangement Agreement, Arena’s shareholders will receive 0.0226 of a Lithium Americas common share for each Arena Share held. The Consideration to Arena implies a total equity transaction value (on a 100% basis) of US$227 million (C$311 million), based on the closing price on December 19, 2022, which would result in Arena Shareholders owning approximately 5.7% of Lithium Americas.

“This Transaction will consolidate the highly prospective Pastos Grandes basin, and creates an exciting opportunity for Lithium Americas, a Canadian incorporated and headquartered company, to add incremental growth in one of the most important lithium producing regions in the world,” said Jonathan Evans, President and CEO of Lithium Americas. “The significant synergies between our two projects and a better understanding of the basin will enable us to advance development planning and maximize our growth pipeline in Argentina. The timing of the Transaction aligns with the Company’s previously announced plan to separate into two public companies in 2023, with significant project development activities expected at both businesses early next year.”

“We are very excited to enter into this transaction with Lithium Americas,” said Will Randall, President and CEO of Arena. “The Transaction allows Arena Shareholders to realize a meaningful and immediate premium and represents a unique opportunity to participate in the development of a larger, consolidated project as we work with the Lithium Americas team to advance the Pastos Grandes basin. In addition, this Transaction offers Arena Shareholders exposure to the world-class, near-term producing Caucharí-Olaroz project and the Thacker Pass advanced development project.”

Figure 1: Pastos Grandes Basin, Salta, Argentina

BENEFITS TO ARENA SHAREHOLDERS

• An opportunity for Arena Shareholders to realize a meaningful and immediate premium:
  • The Consideration to Arena implies a purchase price of C$0.67 per Arena Share based on the closing price on December 19, 2022;
  • Approximately 28% premium to Arena’s closing price based on the closing price on December 19, 2022; and
  • Approximately 27% premium based on Arena’s 20-day volume weighted average price for the period ending on December 19, 2022.
• By receiving shares of Lithium Americas, Arena Shareholders will have an opportunity to benefit from future upside potential as Lithium Americas shareholders, including:
  • Participating in upside from Lithium Americas’ diversified portfolio of near-term producing and advanced development assets in the United States and Argentina, including:
    • Caucharí-Olaroz in Jujuy, Argentina (“Caucharí-Olaroz”) with commissioning underway and lithium carbonate production expected in H1 2023; and
    • Thacker Pass in Nevada, United States (“Thacker Pass”) with a ruling on appeal of Record of Decision expected in early 2023.
  • Participating in the benefits of developing the Sal de la Puna project being developed alongside Lithium Americas’ Pastos Grandes project;
  • Participating in a combined company with increased scale and access to capital supported by a strong balance sheet to execute on growth plans; and
  • Participating in the benefits of the potential separation of Lithium Americas into two public companies to further unlock value.
• In addition, Lithium Americas’ shares are listed on the New York Stock Exchange and the Toronto Stock Exchange and have significantly more trading liquidity compared to the Arena Shares.

BENEFITS TO LITHIUM AMERICAS SHAREHOLDERS

• Unlocks development opportunities in the Pastos Grandes basin by combining the Pastos Grandes project and the Sal de la Puna project. Benefits include:
  • Integrating the development of the Pastos Grandes project and the Sal de la Puna project, which is expected to result in a larger scale and more optimized development plan and cost synergies for both projects;
  • Enhancing Lithium Americas’ team in Argentina with the addition of Will Randall and Arena’s team, who are expected to assist in developing the Company’s growth plans in the country; and
  • Building on progress made through the Technical Collaboration Agreement, of April 14, 2022, between Lithium Americas and Arena, including exploration and planning to optimize the economics of the deposit.
• Bolsters Lithium Americas’ growth pipeline while preserving cash on hand:
  • The addition of a complementary resource significantly expands Lithium Americas’ growth pipeline in Argentina, without distracting management from existing operations; and
  • The primarily stock acquisition further preserves the Company’s balance sheet flexibility with US$392 million in cash and short-term bank deposits as at September 30, 2022.

RECOMMENDATION OF ARENA BOARD OF DIRECTORS

Arena appointed a special committee of independent directors to consider and make a recommendation to the board of directors of Arena with respect to the Transaction. After consultation with its financial and legal advisors, and on the unanimous recommendation of the Special Committee, the Arena Board (with Ignacio Celorrio and Xiaofeng Lo abstaining) unanimously determined that the Transaction is in the best interests of Arena, and approved the Arrangement Agreement. Accordingly, the Arena Board recommendation that Arena Shareholders, option holders and warrant holders vote in favour of the Transaction. The Board Recommendation is made to all Arena Securityholders excluding Lithium Americas and Ganfeng Lithium (as defined herein).

The Special Committee received a fairness opinion from Stifel GMP., which was retained on a fixed-fee independent fairness opinion basis, which states that as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Arena Securityholders pursuant to the Transaction is fair, from a financial point of view, to the Arena Securityholders (other than Lithium Americas and GFL International Co. Ltd. (as defined herein)).

TRANSACTION CONDITIONS AND TIMING

The Transaction will be effected by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario) and will be subject to the approval of: (i) 66 2/3% of votes cast by Arena Shareholders; (ii) 66 2/3% of votes cast by Arena Securityholders, voting together as a single class; and (iii) a simple majority of the votes cast by Arena Shareholders excluding for this purpose the votes held by any person required under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, at a special meeting of Arena Securityholders expected to be held in Q1 2023. In addition to Arena Securityholder approval, the Transaction is also subject to the receipt of certain regulatory and court approvals, including the approvals of the TSX, NYSE and the TSX Venture Exchange, any required approval under the Investment Canada Act, and other closing conditions customary in transactions of this nature.

The Transaction provides for, among other things, customary Arena Board support and non-solicitation covenants, with a “fiduciary out” that would allow Arena to accept a superior proposal, subject to a “right to match” period in favour of Lithium Americas. The Arrangement Agreement also provides for, among other matters, (i) a termination fee of US$9.1 million payable by Arena to Lithium Americas in certain specified circumstances, and (ii) a reverse termination fee of US$9.1 million payable by Lithium Americas to Arena in certain other specified circumstances.

All directors and senior officers of Arena have entered into support and voting agreements pursuant to which they have agreed to vote their Arena securities in favour of the Transaction.

Pursuant to the Arrangement Agreement, unless otherwise excluded, all outstanding Arena warrants and stock options, which remain unexercised at the effective time of the Transaction, will be deemed to be exercised on a “cashless exercise” basis under the arrangement for Arena Shares, which will be exchanged for LAC Shares at the Exchange Ratio.

Ganfeng Lithium Co. Ltd., GFL International Co. Ltd. and their affiliates, which collectively owns approximately 16% of the outstanding Arena Shares and Arena Warrants that if exercised would represent a further 6% ownership of Arena, has entered into a support and disposition agreement committing to use commercially reasonable efforts to dispose of all of its securities of Arena (including exercising its Arena Warrants and disposing of the Arena Shares issuable thereunder) prior to closing of the Transaction. Further, the Arrangement Agreement provides that in the event that such securities held by Ganfeng are not disposed prior to closing of the Transaction, Lithium Americas will acquire such securities for cash (at a set discount to the value of the share Consideration at closing) rather than issue new shares of the Company as part of the Transaction subject to a maximum cash payment of C$75 million.

Subject to certain conditions, including the Parties obtaining the requisite regulatory approvals, the Transaction is expected to close by Q3 2023.

Upon closing of the Transaction, the Arena Shares are expected to be concurrently delisted from the TSX-V. The delisting is conditional upon TSX-V approval.

Further details of the Transaction are set out in the Arrangement Agreement and will be included in a management information circular of Arena that is expected to be mailed to Arena Securityholders in February 2023. The Arrangement Agreement and Circular will be made available on SEDAR under the issuer profile of Arena at www.sedar.com.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.

ADVISORS AND COUNSEL

BMO Capital Markets is acting as financial advisor to Lithium Americas, and Cassels Brock & Blackwell LLP is acting as Lithium Americas’ legal advisor.

Cormark Securities is acting as financial advisor to Arena, and Stikeman Elliott LLP is acting as Arena’s legal advisor. Stifel GMP is acting as financial advisor to the Special Committee.

ABOUT LITHIUM AMERICAS

Lithium Americas is focused on advancing lithium projects in Argentina and the United States to production. In Argentina, Caucharí-Olaroz is advancing towards first production and Pastos Grandes represents regional growth. In the United States, Thacker Pass has received its Record of Decision and is advancing towards construction.

ABOUT ARENA

Arena owns 65% of the Sal de la Puna Project covering approximately 14,000 hectares of the Pastos Grandes basin located in Salta, Argentina.