Ioneer (ASX: INR)While the lithium stocks have all been swept...

Ioneer (ASX: INR)

While the lithium stocks have all been swept higher this year, the push upwards has been far from even. Some have soared, others have edged higher.

Ioneer is an example of the latter. It is the developer of the Rhyolite Ridge lithium-boron project in southern Nevada, about halfway between Reno and Las Vegas.

According to a definitive feasibility study in April last year, revenue from the boron could establish the project as the lowest-cost producer of battery-ready lithium carbonate/hydroxide in the world at $US2,510/t.

Production of 22,000t a year from a $US785m development gives the project Tier 1 credentials in the "boomingest" of the boom commodities.

While Ioneer at its current price of 54c has a none-too-shabby market cap of a little more than $A1 billion, the point that it has been a laggard in the share price stakes when compared to the stellar gains of its better known ASX peers remains.

But that could be about to change.

Ioneer has long let it be known that with the help of Goldman Sachs, it was out to secure a “strategic partner” before September 30. And here we are on September 3.

Given what has been going on in the lithium space, it would not surprise if the delivery of a strategic partner will be seen as a game-changing event, or a re-rating event if you prefer.

That is based on the expectation that a strategic partner will deliver the majority of the required equity financing for the project. It is also based on the assumption that the selldown occurs as close as possible to the project’s NPV, put at $US1.26 billion in the BFS.

Bridge Street Capital’s Chris Baker, who called the turnaround in the lithium stocks ahead of the pack, expects a 25% equity selldown at a 50% discount to underlying project NPV which he has higher at $US1.6b on his price decks and project cost inputs.

Assuming a modest equity raise (probably post-permitting in 2022), Baker arrived at a $1.07 a share valuation.

Source:
Bellevue poised to re-rate as it joins an exclusive club of top-shelf gold mines - Barry FitzGerald | Livewire (livewiremarkets.com)