[Management View]
Lithium Argentina AG (LAR) reported strong operational results for Q2 2025, achieving 8,500 tons of lithium carbonate production at 85% of nameplate capacity. Management emphasized structural cost reductions, securing $120 million in new bank facilities, and advancing regional consolidation efforts with Ganfeng. The strategic goal remains to achieve over 200,000 tons per year of lithium carbonate equivalent capacity, with a feasibility study for the Pozuelos and Pastos Grandes basins expected by year-end.

[Outlook]
Management reiterated confidence in meeting full-year production guidance of 30,000–35,000 tons. Expansion plans include adding 40,000 tons of capacity at Kachari Olaroz and consolidating regional assets to create one of the largest lithium operations globally. The company aims to supply non-China customers in the coming years while maintaining financial flexibility and avoiding shareholder dilution.

[Financial Performance]
Revenue increased QoQ despite an 8% decline in average realized price to $7,400 per ton, driven by higher production volumes. Unit costs dropped 8% QoQ to $6,100 per ton, below feasibility study estimates. Depreciation and logistics costs impacted reported cost of goods sold (COGS), which remained flat QoQ.

[Q&A Highlights]
Question 1: How do China's anti-involution policies impact the lithium market and recent price volatility?
Answer: Management is monitoring China's policies aimed at reducing competition across industries. While the company is set up to withstand price volatility, they believe current pricing levels are unsustainable long-term due to demand expectations and the need for new supply.

Question 2: What milestones are required for formal investment decisions in regional growth projects?
Answer: Completion of the feasibility study by year-end is critical. Preliminary customer discussions indicate strong interest in large, high-quality brine projects. Management aims to finance growth through non-dilutive measures while maintaining balance sheet strength.

Question 3: Can you elaborate on the pricing discount and cost reduction trends?
Answer: The discount to the reference price remains stable at $2,000 per ton, reflecting taxes and reprocessing fees. Structural cost reductions are expected to continue, with product quality improvements prioritized over short-term price optimization.

Question 4: Why did reported COGS remain flat despite cash COGS reductions?
Answer: Depreciation and logistics costs, initiated after commercial production began in Q4 2024, explain the discrepancy. Management expects reported COGS to align more closely with cash COGS in future quarters.

Question 5: What is the visibility into Q3/Q4 order books and cost expectations?
Answer: Most production is under offtake agreements with Ganfeng, with several weeks' pricing lag. Costs are expected to remain stable with minor variability, reflecting ongoing optimization efforts.

Question 6: How does Ganfeng's financial health impact its ability to fund projects?
Answer: Ganfeng prioritizes Argentina as a key investment jurisdiction and has access to significant capital in China. Their strong relationships with downstream customers support their ability to fund low-cost projects like Kachari Olaroz.

Question 7: Will the $108 million short-term debt be refinanced?
Answer: Management plans to refinance the debt using the newly secured $120 million loan facilities.

[Sentiment Analysis]
Analysts expressed optimism about LAR's cost reductions and strategic growth plans, with questions focused on pricing dynamics, operational efficiency, and regional expansion. Management maintained a confident tone, emphasizing resilience and long-term scalability.

[Quarterly Comparison]
| Metric | Q1 2025 | Q2 2025 | QoQ Change |
|----------------------------|-----------------|-----------------|------------------|
| Lithium Carbonate Output | 7,200 tons | 8,500 tons | +18% |
| Average Realized Price | $8,000/ton | $7,400/ton | -8% |
| Unit Cost | $6,600/ton | $6,100/ton | -8% |
| Revenue | Increased | Increased | Higher Output |

[Risks and Concerns]
1. Continued lithium price volatility may impact profitability despite cost reductions.
2. Dependence on Ganfeng for offtake and regional consolidation introduces counterparty risk.
3. Execution risks associated with large-scale expansion and feasibility study completion.
4. Potential delays in supplying non-China customers due to operational adjustments.

[Final Takeaway]
Lithium Argentina AG demonstrated resilience in Q2 2025 through higher production volumes and structural cost reductions, offsetting market price declines. The company is well-positioned for long-term growth, with ambitious expansion plans and strong partnerships with Ganfeng. While risks related to price volatility and execution remain, LAR's focus on operational efficiency and financial flexibility provides a solid foundation for scalable growth in the global lithium market.