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Lithium Americas Corp. (LAC) shares surged more than 100% on Wednesday following reports that the Trump administration is considering taking an equity stake of up to 10% in the Canadian mining company. The dramatic stock movement came after Reuters reported that the White House proposed the equity stake as part of ongoing negotiations to restructure a $2.26 billion Department of Energy loan for the company’s flagship Thacker Pass lithium project in Nevada. This potential investment represents the Trump administration’s continued strategy of securing direct ownership stakes in critical mineral supply chains, marking the first such proposal for a Canadian-domiciled company.

White House Pushes for Stake in Thacker Pass Project
 

The proposed government stake comes as Lithium Americas renegotiates the terms of its massive $2.26 billion loan from the U.S. Department of Energy, originally secured to develop the Thacker Pass mine in Humboldt County, Nevada. According to Trump administration officials, the company failed to meet conditions for the first loan disbursement and requested to defer part of the repayment schedule to later years. In exchange for this restructuring, the administration is seeking “a very small stake of equity to create essentially a cash buffer and eliminate some risk on behalf of taxpayers,” as one official explained to CNBC.

This move aligns with the Trump administration’s broader strategy of taking direct ownership in companies deemed critical to U.S. national security and supply chain independence. The administration has already secured similar stakes in other strategic firms, including a 10% equity position in Intel and a 15% stake in rare earth miner MP Materials through the Department of Defense. Interior Secretary Doug Burgum revealed in April that the administration was considering equity stakes in miners to help them compete against state-sponsored competition from China, making the Lithium Americas proposal part of a coordinated approach to securing America’s mineral supply chains.

The Thacker Pass project represents a cornerstone of U.S. domestic lithium production ambitions, as it’s expected to become one of the largest lithium sources in North America once operational. The mine is structured as a joint venture between Lithium Americas (62% stake) and General Motors (38% stake), with GM holding offtake agreements for the lithium carbonate production. When fully operational by late 2027, Thacker Pass will be positioned as the largest lithium resource in the Western Hemisphere, making it strategically vital for electric vehicle battery production and reducing U.S. dependence on foreign lithium suppliers.

LAC Stock Doubles on Record Trading Volume
 

Lithium Americas shares experienced extraordinary volatility on Wednesday, with the stock hitting a session high of $6.23 before settling at $6.14, representing a gain of $3.07 or exactly 100% from Tuesday’s close of $3.07. The dramatic surge pushed the company’s market capitalization to approximately $1.518 billion, with trading volume reaching an astronomical 208.5 million shares compared to the average daily volume of 8.8 million shares. The stock had been relatively flat through most of 2025 before this explosive rally, with the company showing year-to-date returns of +109.28% and one-year returns of +155.22%.

The market reaction reflects investor confidence in the strategic value of government backing for critical mineral projects, particularly given the success of similar arrangements. MP Materials, which received a 15% equity stake from the Department of Defense in July, has seen its shares more than double since that deal was announced. The potential government partnership provides Lithium Americas with both financial backing and implicit policy support, reducing execution risks for the capital-intensive Thacker Pass project while positioning the company as a key player in America’s domestic lithium supply strategy.

Despite the impressive recent gains, LAC shares remain well below historical peaks, with the 52-week range spanning from $2.31 to $6.30. The company currently trades without traditional valuation metrics like P/E ratios due to its pre-revenue development stage, with trailing twelve-month earnings per share of -$0.25. Analyst price targets range from $2.50 to $8.00, with an average target of $4.68, suggesting mixed views on the stock’s fair value even after the government stake announcement. The company maintains a strong balance sheet with $508.85 million in total cash, providing financial flexibility as it continues developing the Thacker Pass project toward its scheduled 2027-2028 operational timeline.

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