Cashed-up ioneer continues to ramp-up US critical minerals play

By

Colin Hay

-

July 24, 2023

With strong US government funding support, ioneer (ASX: INR) continues to create momentum at its promising Rhyolite Ridge critical minerals development in the US.

In an active June quarter, the company released an updated resource at its 100%-owned Rhyolite Ridge Lithium-Boron Project in Nevada and signed a key partnership to support its supply chain targets.

Significantly, the company has already attracted US government support.

Powering ahead in booming EV market

“As the world’s demand for lithium in electric vehicle and energy storage increases, the need to secure a reliable, sustainable, and US domestic source of lithium is critical,” said ioneer’s managing director Bernard Rowe.

“Our project is uniquely positioned in the US, and has been engineered to ensure a stable, long- term, socially, and environmentally responsibly mined source of lithium.”

“This past quarter has continued the company’s progress toward a Final Investment Decision and commencement of construction.”

In April, ioneer unveiled a 168% increase to 3.4 million tonnes of lithium carbonate equivalent (LCE) and 14.1 million tonnes of boric acid equivalent in its updated mineral resource estimate for the South Basin section of the Rhyolite Ridge project.

The company is confident the increased MRE provides it with optionality around future growth opportunities, including increasing lithium production, with or without increasing boron production.

Dragonfly agreement powers market opportunities

In another breakthrough, ioneer announced a partnership with Nevada-based Dragonfly Energy in May that is expected to deliver critical materials from Rhyolite Ridge to the US electric vehicle market.

Nevada-based Dragonfly Energy is a leading manufacturer of deep cycle lithium-ion batteries, which are sold direct-to-consumers and to original equipment manufacturers such as Keystone RV and Airstream.

The company also has a major focus on R&D and is working on innovative non-toxic deep-cycle lithium-ion batteries which are proving popular for recreation vehicles, marine vessels, off-grid installations and other storage applications.

Strong permitting progress

Mr Rowe said ioneer continues to move ahead with its various permitting requirements.

“We continue to make measurable progress in the NEPA (National Environmental Policy Act) process following the completion of the first public scoping period during the quarter and the decision of the Bureau of Land Management (BLM) to publish a Notice of Intent (NOI) in December 2022. The next phase, the release of a draft Environmental Impact Statement (EIS), is expected to be completed in Q3 2023.”

Ioneer requires three key permits to commence construction at Rhyolite Ridge and has made good progress on all three.

It also recently obtained a Resource Conservation and Recovery Act (RCRA) ID for hazardous waste disposal and Mine Safety and Health Administration (MSHA) ID.

Cashed up and ready to go

Mr Rowe said the company is financially well positioned with conditional debt and equity commitments of nearly US$1.2 billion.”

Earlier this year, ioneer and the US Department of Energy Loan Programs Office (DOE LPO) finalised a term sheet and offer of a Conditional Commitment for a loan from the DOE for financing the construction of the Rhyolite Ridge Project.

Under the term sheet, the proposed loan is for an amount up to $1 billion with a term of approximately 10 years.

Mr Rowe said the company continues activities to progress satisfaction of conditions precedent for the DOE loan.

Boron market on the rise

Alongside the rapidly growing lithium market, the global boron market is expected to provide upside for the Rhyolite Ridge Project.

According to Mordor Intelligence, Boron is expected to register a CAGR of over 3% up to 2028. That market growth is being led by the rapidly growing adoption of fibreglass in industries.

Boron is also forecast to benefit from a growing demand from the ceramics industry.

Mordor says the Asia-Pacific region represents the largest market and is expected to be the fastest-growing market over the forecast period owing to the increasing consumption from countries such as China, India and Japan.