Couloir Capital Ltd has repeated a ‘Buy’ on ION Energy Ltd after Ion completed the maiden drilling at its flagship Baavhai Uul project in Mongolia.
The research firm is updating the value per share estimate of $0.88 per share to $1.00. Shares of ION are currently trading around the $0.54 mark on the TSX Venture Exchange.
ION completed a 23-drill hole program covering 823 meters at the Baavhai Uul project to determine lithium mineralization potential. The assay results of the "potential near-term catalyst" are due in the coming months.
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Analysts wrote: “ION has progressed substantially since our previous update report, leveraging a successful $5.75 million equity financing to significantly advance its mineral asset portfolio through exploration.”
It added: “Apart from completing flagship project Baavhai Uul’s inaugural drilling program, Ion has also acquired a new lithium-prospective project in relative proximity, extending its portfolio and potential catalyst pipeline. With another maiden drilling program set to commence at its new property, we believe that ION has become a significantly more active company relative to our previous reports, as momentum from exploration and portfolio expansions drives the company’s growth and enables further catalysts.”
ION has acquired the license for a property located northwest of Baavhai Uul and measuring in excess of 19,000 hectares. The exploration company is set to commence a shallow drilling program at the new project, which has a large salar area.
Analysts expect a huge market response as the flagship project moves to the next stage.
“Prior to drilling, there were limited exploration milestones that could generate investor excitement around Baavhai Uul’s mineral potential. However, with the first drilling assays having been sent off for analysis, we believe ION has begun building its pipeline of value accretive catalysts,” the report said.
If the assay results prove to be strong, ION would experience greater share price sensitivity to the broader rally in lithium equities, as exploration potential drives interest in the project’s development outcome.
ION Energy is Mongolia's first lithium brine explorer and developer, with licenses spanning a combined landmass of over 100,000 hectares. ION's flagship, 81,000+ hectare Baavhai Uul lithium brine project represents the largest and first lithium brine exploration license award in Mongolia.