Lithium Americas Boxes Out at Cauchari-Olaroz
In Argentina there are mineral rights and surface rights. The provinces control the former and local communities generally own the latter. A miner needs the mineral rights to extract from them and the surface rights to build on them. Typically, you try to buy the surface rights to coincide with your mineral rights. These transactions are with the local communities for the use of the land at the surface and infrastructure built upon it. For salar deposits, there's simply not much else they are useful for, so usually this is just a matter of course. That is all to say simply that surface rights generally coincide with mineral rights.
Operation Landlock
Lithium Americas' (LAC) acquisition of Millennial Lithium included a good chunk of land with Cauchari East, but it didn't look very promising from a resource expansion perspective. When I looked closer, it turned out there was probably something else of value here.
The claim map in Cauchari-Olaroz (C-O) is a mess, holes, islands, narrow strips. LAC's adjacent competitor Allkem has a large land position in Cauchari (LAC's side of C-O) of which ~9k hectares is only accessible by crossing Millennial's claim. This is the area that Allkem's (from Advantage Lithium's days) study declared a 470kt LCE resource.
With the Millennial acquisition LAC has essentially landlocked this resource, which to some degree makes it theirs.
There Will Be Brine
Hydrologic mineral resources in Argentina are not 'unitized'. This is a concept more commonly employed in mature petroleum districts which are highly competitive. The idea is that mineral rights are more appropriately defined in-situ (in place). When a resource is mobilized, by pumping for instance, unitization attempts to protect the original rights to the resource even though they may no longer reside within the claim bounds.
For Argentinian mines this means that if you can pull it out of your well, its yours. "I drink your milkshake" - There Will Be Blood (2007) by Paul Thomas Anderson. This is about competition, and LAC seems to have pretty much boxed Allkem out of Cauchari.
Of course, its possible an agreement could be made where Allkem is allowed use of LAC's surface rights to develop this resource, but this would be strictly on LAC's terms. The same can't be said for Olaroz to the north, where LAC is drinking some of Allkem's milkshake as we speak
No Slouch
I like to see this. Even if its only incidental to the acquisition of Millennial's primary asset at Pastos Grandes. It adds value, albeit tough to quantify. It indicates management is pursuing projects which align in multiple ways strategically and defines a posture.
If Allkem were to have acquired these claims for instance, LAC's posture in Cauchari would have become significantly diminished. In that scenario, Allkem would have external access to their 470kt Cauchari resource and viable land to build evaporation ponds on to facilitate its extraction.
From the C-O resource model we can see roughly 50% of LAC's resource is contained to the south in Cauchari. You simply don't want a direct competitor mucking about in your back yard.
On the flip side, look at the next map where LAC is currently pumping brine from their foothold in Olaroz to the north, right in Allkem's back yard.
Out Expand the Expanders
Prior to the Millennial acquisition, I would have said that Allkem clearly had the upper hand in the Cauchari-Olaroz basin. They were the first mover, they own more of the larger salar. Now however, I'd say it pretty evenly cut. LAC has contiguous pipe and well access to both salars, and in the long run its now much less likely that Allkem can produce anything from the Cauchari side.
Take a close look and try to find areas where either LAC or Allkem could build a large evaporation pond and plant facility. It needs to be flat land near the salar but not on it, and it needs to connect to claims on the salar that can host producing wells. Allkem maybe has room to expand upon their existing ponds, but only marginal access to the Cauchari salar.
LAC has several options on the eastern side of both the Cauchari and Olaroz salars. The Millennial land is a kind of linchpin. If both companies are going to spend decades milking these deposits I think its likely an agreement would be made to facilitate further extraction, either by a land swap or even a joint venture. Joint ventures often arise when companies are at a logistical standstill on the same deposit, and an agreement is mutually beneficial for both companies.
Conclusion
Millennial's primary asset was Pastos Grandes. The additional Cauchari East claims are more valuable to LAC than anyone else because it improves their land position significantly, and it gives them optionality for future expansion. Fresh water sources from Cauchari East could also become important as these expansions take place.
I'm sure I'll cover Pastos Grandes and the Arena Minerals' magic potion angle, but this peripheral aspect of LAC's Millennial acquisition deserves some awareness.