Lithium Argentina AG Q2 FY2026 earnings call

• Core Operational Performance

  • Kachari Olaroz has averaged 95% of design capacity through the first half of 2026, including a planned Q2 shutdown for optimization and debottlenecking, and remains on track to meet full-year production targets. Cash operating costs have been reduced from ~$8,000 per ton at startup to a consistent sub-$6,000 per ton level via ongoing process improvements, enabled by the design advantages of the company's brine-based operation.
  • The JV closed two new unsecured debt facilities totaling $220 million, strengthening the operation's balance sheet, providing financial flexibility for growth and ongoing distributions to partners. At the corporate level, Lithium Argentina ended the quarter with $100 million in cash and total liquidity of $230 million.
  • Independent third-party verification confirmed a 2025 product carbon footprint of 1.4 tons of CO2 equivalent per ton of LTE (Scope 1 and 2), driven by 97% solar power for operations. This low carbon footprint is a key competitive advantage over more energy-intensive lithium production methods.

• Growth Pipeline

  • The company is pursuing a disciplined, phased approach to growth built on Stage 1 operating success. The immediate priority is finalizing the Kachari Olaroz Stage 2 development plan, with scoping study results expected by the end of Q3 2026. Early works including additional drilling, engineering, and debottlenecking are already underway following RIGI approval in Q2 2026, and will benefit both existing production and the Stage 2 expansion. Stage 2 plans call for a modular DLE facility targeting an initial 10,000 tons per annum, as the first phase of a total 45,000 ton per annum expansion.
  • For the PPG project, the company continues to await RIGI approval (submitted in Q1 2026, expected by end of 2026), and has made significant progress on project financing with partner Ganfeng, including discussions with potential minority strategic partners.

• Strategic Initiatives

  • The company is evaluating a secondary listing on the ASX to complement its existing NYSE listing, broaden its investor base, improve global market visibility, and support long-term shareholder value.

Lithium Argentina operates its core lithium production through the Kachari Olaroz joint venture. In Q2 2026, Kachari Olaroz delivered adjusted EBITDA of approximately $110 million, a 4% increase from Q1 2026. Cumulative adjusted EBITDA for the first half of 2026 exceeded $200 million on a 100% JV basis. The operation generated $141 million of free cash flow from operations in Q2 2026. Average realized lithium price in Q2 was $19,500 per ton, and year-to-date cash operating costs averaged $5,600 per ton, with Q2 costs modestly higher due to a planned shutdown. Cash operating margin reached 70% in Q2 2026. Net debt at the JV level decreased by $114 million quarter-over-quarter, from $256 million to $142 million. Lithium Argentina received $75 million in distributions year-to-date from the JV, with an additional $27 million received post-quarter end. No other product segments are broken out in the call.

• Full-year 2026 production guidance for Kachari Olaroz is maintained at 35,000 to 40,000 tons, and the operation remains firmly on track to meet this target.
• Full-year 2026 adjusted EBITDA is estimated at approximately $460 million on a 100% JV basis at the current lithium price of $20,000 per ton.
• Full-year 2026 operating cost guidance is maintained at a mid-$5,000 per ton average, with Q2 cost increases attributed to one-time impacts of the planned shutdown.
• Management expects distributions to shareholders from the Kachari Olaroz JV in the second half of 2026 to be similar to first half levels, and potentially higher, if lithium prices remain near current levels.

No material new risks or operational failures were explicitly discussed during the call. The only noted volatility is the inherent cyclicality and price volatility of the global lithium market, which management addressed by highlighting the company's low-cost position, disciplined phased growth approach, and strong balance sheet liquidity that reduce exposure to market swings.

Q: An analyst asked about production and sales cadence for H2 2026, specifically if any additional planned maintenance shutdowns are scheduled and if Q2's lower sales relative to production will catch up in the second half. / A: Management confirmed there are no planned maintenance shutdowns for the remainder of 2026, and expects very strong production throughout H2. They noted the Q2 sales-production gap was purely a timing issue tied to quarter-end cutoffs, and anticipate stronger sales volumes in H2 2026.

Q: An analyst asked about management and partner conviction for advancing growth projects given recent lithium price volatility, and how market outlook assumptions have changed over the past six months. / A: Management stated they have very high conviction in their portfolio of projects, anchored by the successful execution and strong profitability of Stage 1, which is one of the lowest-cost lithium assets globally. They noted the company is advancing projects in a disciplined, capital-light way, including partnering for PPG financing, and view their projects as high-priority to bring online to meet growing long-term lithium demand.

Q: An analyst asked if the Kachari Olaroz Stage 2 scoping study delay from mid-year to end of Q3 reflects any underlying issues, and what the timeline for the project is over the next 12 months. / A: Management clarified the timeline shift is not a material delay, and reflects coordination with partner Ganfeng to ensure the plan includes full details of the ongoing early works program to support a phased, accelerated expansion starting with 10,000 tons per annum. RIGI approval is already in place, so early works spending can count toward required regulatory spending obligations, and the company is eager to move forward immediately after the study release.

Q: An analyst asked for details on Stage 1 debottlenecking: what parts of the plant are being adjusted, capital cost, timeline, and how much additional production can be gained. / A: Management explained that operational experience has shown major plant components (such as the carbonation plant) can support production above the original 40,000 ton nameplate capacity, so the main debottlenecking is focused on upstream brine supply, requiring just 2-3 additional wells at ~$2.5 million per well. The low-capital work is ongoing now, with modest capex over the next 6-10 months, and production gains of 2,000 to 3,000 tons per annum expected to flow through starting in 2027.