Lithium Argentina (LAR) Q3 2026 earnings review
Lithium Argentina's mine keeps paying cash, but lithium prices fall
Lithium Argentina's Argentine brine mine keeps sending cash to its two owners, while the lithium price slips again. The operation handed $100 million to Lithium Argentina and Ganfeng, and the parent reported net income of $13.0 million against a loss a year ago. Chief executive Sam Pigott cited "the strength and consistency of Stage 1", yet each tonne fetched less than before.
| Revenue at the mine, on a 100% basis | $184 million +6% from last quarter |
|---|---|
| Average price per tonne of lithium carbonate | $17,580 -10% from last quarter |
| Net income | $13.0 million a $64.5 million loss a year ago |
| Full-year production outlook | Unchanged 35,000-40,000 tonnes, with 28,490 produced so far |
⚖️ Verdict: 🟢 Bullish
The case got better, because the debt bill that shadowed this company is nearly gone. Ganfeng lent $180 million, and the group repurchased most of the notes maturing in January. One caution: the price per tonne fell for the first time this year, and the cash margin narrowed with it.
The question now is whether this mine can fund the next one as prices soften. Either its low site costs leave enough cash to build the first Stage 2 module, or Ganfeng writes the cheques and takes more of the project. The fourth-quarter price will tell.
🐂 Bull Case
Cauchari-Olaroz Paid Out $100 Million
Lithium Argentina owns 44.8% of Minera Exar, which runs the Cauchari-Olaroz brine operation in Jujuy, Argentina. Chief executive Sam Pigott points to "its ability to generate substantial cash", and the shareholder agreement behind the mine sends spare cash to the two owners, Lithium Argentina and its Chinese partner Ganfeng.
Exar generated $95 million of operating cash flow between July and September. After capital spending it still held $92 million, and it handed $100 million to the two owners during those three months. A further $30 million followed once the quarter closed. Distributions in 2026 now reach $230 million.
This matters because the parent spends cash rather than earning it, so what arrives in Zug sets what it can fund. Its own free cash flow turned positive at $34.3 million, against an outflow of $6.1 million a year earlier, as repayments from the operation came through.
What to watch: the cash paid out in the fourth quarter against the $100 million of this one. A smaller payment would show that a weaker lithium price reaches the owners quickly, because Exar distributes only what it does not need for debt and spending.
Ganfeng Money Cleared the January Debt
Lithium Argentina faced convertible notes maturing in January 2027, and earlier this year management flagged doubt about the group continuing as a going concern while that bill stood. On September 15 it sold a $180 million unsecured convertible debenture to a Ganfeng subsidiary. The paper runs six years at a 4.0% coupon.
Once September ended, the Zug-based group repurchased $200 million of the old notes for about $198 million in cash. Roughly $59 million stays outstanding, "which the Company intends to repay at or before maturity". That retires most of the refinancing risk, and Ganfeng now holds the paper instead of outside lenders.
What to watch: whether Ganfeng converts its debenture at $12.50 a share, which would create about 14 million new shares by our math. Conversion would tighten a partner's grip on a group that already shares its mine, its next project and its lending with that same partner.
Output Held at 95% of Capacity
Cauchari-Olaroz produced 9,550 tonnes of lithium carbonate in the third quarter, 3% above the second. The plant ran at "95% of design capacity", Lithium Argentina said. Nine-month output of 28,490 tonnes "keeps us on track to reach mid-point of our full-year guidance", according to the release.
Costs at the site fell even as inflation bit. Cash operating costs came in at $5,801 per tonne sold, $484 under the year-ago figure, though the company said they "continued to be impacted by higher energy costs" and a stronger Argentine peso. Shipments of 10,488 tonnes ran 35% ahead of last year.
What to watch: full-year output against the range of 35,000 to 40,000 tonnes. A result near the middle would show the plant can hold this rate while the energy bill climbs, which is what makes the operation's cash reliable rather than occasional.
🐻 Bear Case
The Lithium Price Turned Down Again
Pigott opened the results by citing "the strength and consistency of Stage 1" at Cauchari-Olaroz. Consistency describes the tonnes, not the money each tonne brings in. Exar sold its lithium carbonate at an average of $17,580 per tonne, roughly a tenth under what it realised three months earlier.
The operation ships into the Chinese battery chain at market-linked prices, so every quarter's revenue depends on where carbonate trades. Volume carried this one: shipments ran almost a fifth above the second quarter, while revenue advanced only in the mid single digits.
- Realised price: $17,580 per tonne, against $19,563 in the second quarter
- Cash operating margin: 67%, from 70% three months earlier
- Shipments: 10,488 tonnes sold, from 8,901
- Adjusted EBITDA at the operation: $112.5 million, against $110.3 million
That cuts against the framing of steady performance, because the owners draw cash from a margin that is narrowing while the plant already works near its limit. Extra tonnes cannot offset much more, so the market price now decides what the two shareholders collect next year.
What to watch: the realised price Exar reports for the fourth quarter. Another step down with output flat would pull the cash operating margin toward the low sixties, and the payments that fund head office and Stage 2 would thin out with it.
Export Duties and Royalties Returned
Exar publishes two cost measures. Cash operating costs cover the site itself. Total cash costs add selling costs, export duties net of refunds and provincial royalties, so they show what the mine really pays before financing. That second measure rose to $6,734 per tonne sold from $6,514 a year earlier.
One line explains the gap. Selling costs, duties and royalties took 5.3% of revenue against 2.9% a year ago, a swing of 2.4 percentage points by our math. Site costs per tonne fell 8% over the same twelve months, so Argentine levies rather than the plant pushed the total up.
What to watch: that line as a share of revenue in the fourth quarter. Should duties hold near 5% while prices ease, the cash margin at the mine narrows from both directions, and the RIGI tax regime already granted to Stage 2 becomes worth more than the study assumes.
The Parent Leans on Ganfeng Everywhere
Lithium Argentina sells no lithium itself. It holds 44.8% of Exar and, as the release states, has "no direct legal claim to its revenues and expenses", so cash reaches head office as repayments of shareholder loans. Ganfeng owns the rest of that mine, 67% of the new PPG venture and now the convertible debenture.
Head office also costs a little more to run each year. Adjusted EBITDA for the parent, which measures its own running costs, came in at minus $6.1 million against minus $4.8 million a year earlier, and the nine-month figure deteriorated as well. Share-based pay and administrative costs both rose.
What to watch: the cost base in the annual statements, and the terms of any PPG financing. If Ganfeng funds that project alone, Lithium Argentina's 33% stake would shrink, and its say over how fast Salta gets built would shrink with it.
👓 Other Themes
Stage 2 Scoping Study Published
On September 30 Lithium Argentina published a scoping study for Stage 2 at Cauchari-Olaroz. It would add 45,000 tonnes of yearly capacity, lifting the site to "approximately 85,000 tpa" over a forty-year life. Initial capital runs near $1.0 billion against an after-tax value of $3.1 billion. A first module is "targeting first production in 2028, subject to required regulatory approvals in Argentina and China".
New Measures for the Head Office
Lithium Argentina now reports earnings before interest, tax and depreciation, an adjusted version of it, and free cash flow for the parent alone. "These measures are presented for the first time this quarter", the company said, with earlier periods restated. What previous releases labelled Adjusted EBITDA described the mine at 100%, so readers comparing quarters should check which label applies.
PPG Moves Into a Ganfeng-Led Venture
The PPG joint venture closed during the quarter, leaving Lithium Argentina with 33% of three combined brine projects in Salta province and a "development plan targeting 150,000 tpa of LCE across three phases". Assets of $532.0 million moved to held for sale, about 39% of the balance sheet. Both partners keep weighing offtake deals and "sales of minority interest to customers and strategic partners".
💲 Other KPIs
Cash at the parent more than tripled in three months, from $99.7 million at the end of June, as the Ganfeng debenture and loan repayments from the mine arrived. Last December the balance stood at $61.1 million. Most of the increase left again in October to buy back notes.
This is the route the mine's cash takes to the parent, since Exar repays shareholder loans instead of paying dividends. Nothing came through in the same quarter last year. Across nine months the figure reaches $58.6 million, against $3.9 million in the first nine months of 2025.
Borrowing from outside lenders at the mine grew $29 million in three months. In July Exar closed a three-year syndicated facility of $170 million priced at 1.05 points over the SOFR benchmark rate. It had drawn $36 million by the end of September, so bank money now funds part of the site's spending.
🔮 Guidance
Unchanged for a fourth quarter. Nine-month output of 28,490 tonnes leaves about 9,010 tonnes for the fourth quarter to land on the middle of the range, by our math, a little below the 9,550 tonnes just produced. The pace so far annualises near 38,000 tonnes, so the middle looks reachable.
Unchanged in size, firmer on timing. The study arrived on September 30, about a quarter after the date set at the 2025 annual results, and it puts initial capital near $1.0 billion. Argentina approved the project under its RIGI investment regime in May, "providing long-term fiscal stability", and the environmental application now sits with regulators.
Unchanged. Lithium Argentina and Ganfeng filed for the large-investment regime early this year and expect a decision before January. The status would fix tax and currency terms for a project aiming at 150,000 tonnes a year, which both partners need settled before either commits real capital to Salta.
Smaller, same intent. After the quarter closed the group retired $200 million of the notes for about $198 million, and plans to repay the rest at or before maturity. By our math, roughly $144 million of head-office cash remains once that payment and the October distribution settle, before any further money from the mine.
❓ Key Questions
What price has Exar secured for this quarter?
Carbonate sold for a tenth less than in the second quarter, and nobody at the company gave an indication for the fourth. The cash margin at the mine follows that number almost one for one.
Who pays for Stage 2's billion dollars?
The study assumes about $1.0 billion of initial capital, while distributions to both owners in 2026 total $230 million. Investors need the split between project debt, Ganfeng and retained cash well before 2028.
Can the fourth quarter deliver 9,010 tonnes?
Nine-month output leaves that much to reach the middle of the full-year range, by our math, slightly under the third quarter. Management did not say whether maintenance or power supply constrains December.
Will Lithium Argentina keep its third of PPG?
It holds 33% of a project aiming at 150,000 tonnes a year and has not explained how it will fund that share. Selling a minority interest to a customer would cut the stake again.