ioneer Ltd made strong progress during the September quarter and is well-funded with A$69.9 million to continue driving the development of its wholly-owned Rhyolite Ridge Lithium-Boron Project in Nevada, USA.
The quarter was marked with one of the most important milestones in the company’s history by securing a strategic funding partner for the project.
Under the terms of the agreement, Sibanye-Stillwater will contribute US$490 million for a 50% interest in the joint venture, with ioneer to maintain a 50% interest and retain operatorship.
Promisingly, ioneer has also secured the key air and water permits necessary to begin construction at Rhyolite Ridge.
Sibanye-Stillwater partnership
In September, ioneer reached an agreement to establish a joint venture with Sibanye-Stillwater Limited to develop the project.
The company has also agreed to provide Sibanye-Stillwater with an option to participate in 50% of the North Basin, upon the election of Sibanye-Stillwater to contribute an additional US$50 million, subject to certain terms and conditions.
In addition, ioneer has entered into a subscription agreement with Sibanye-Stillwater for a strategic placement of US$70 million of INR ordinary shares.
The placement shares will be issued to Sibanye-Stillwater at $0.6553 per share, representing the 10-day VWAP per ordinary share as of the ASX market close on September 15, 2021.
“Most significant milestone”
ioneer managing director Bernard Rowe said: “The signing of a strategic partnership with Sibanye-Stillwater is the most significant milestone in the history of ioneer.
“The partnership will provide the majority of funding to bring Rhyolite Ridge into operation and is a testament to the importance of this project in supplying critically needed lithium chemicals into US supply chains.
“Sibanye-Stillwater is a strong strategic partner with a proven track record of developing and operating major mining projects around the world, including the United States
“We share Sibanye-Stillwater’s strong ESG credentials, and we will draw on its expertise to ensure Rhyolite Ridge is at the very forefront of sustainable production and operation.”
State and Federal permitting
During the quarter, ioneer received a second important project permit, the Water Pollution Control Permit.
ioneer has now obtained two of the three key permits required to commence construction at Rhyolite Ridge:
- A Class II Air Quality Permit issued by the Nevada Division of Environmental Protection; and
- A Water Pollution Control Permit issued by the Nevada Division of Environmental Protection.
The third key permit is the Plan of Operation that must be approved by the Federal Department of Interior (DOI).
Rowe adds “We have now been awarded the air and water permits necessary for project approval.
“The awarding of the Water Pollution Control Permit during the quarter means we now have two of the three critical permits required for construction.
“We are continuing to correspond with relevant US regulators on the publication of the Notice of Intent, which will lead to a Record of Decision for an approved Plan of Operation, which is the final approval for the project.”
Other key activities
Work during the quarter focused on further progressing detail and vendor engineering with the key aim of ongoing activities is to be construction ready to support construction mobilisation following the Full Notice to Proceed (FNTP) award.
The discussions with other potential lithium offtake partners continued with ioneer anticipating the conclusion of these discussions in the first half of 2022.
Notably, significant work has been completed on submission documents for a secondary listing of ioneer shares on NASDAQ.
Rowe adds: “We also signed three material engineering contracts in the period, with international partners, FLSmidth, Veolia and DuPont (NYSE:DD) Clean Technologies, which have all commenced design and engineering work on the project.”
Upcoming work program
The work program over the coming months includes:
- Advancing Federal permitting process by obtaining the Notice of Intent (NOI) and commencing the NEPA process;
- Progressing additional binding offtake agreements for lithium sales;
- Securing Debt funding including associated due diligence;
- Progressing a secondary listing of ioneer’s shares on a major US stock exchange; and
- Continuing the engineering effort to further decrease execution risk.
Rowe adds: “As the most advanced lithium development project in the US, ioneer is in a strong position to capitalise on the increased demand for lithium products in line with the US Government’s efforts to secure critical minerals supply chains for end uses like EVs and renewable energy infrastructure in the US.
“There was a noticeable uptick in inbound enquires from potential offtake parties this quarter, and the company is assessing multiple lithium supply opportunities.”