ioneer uses December quarter to bring Rhyolite Ridge lithium-boron project closer to development
South Africa’s Reserve Bank has approved Sibanye Stillwater’s proposed US$490 million investment to secure 50% of ioneer’s Rhyolite Ridge lithium-boron project in the US, in addition to the purchase of US$70 million ioneer shares via a placement.
Emerging Australian lithium-boron producer ioneer (ASX: INR) has spent the December quarter advancing its wholly-owned Rhyolite Ridge project in the United States closer to development.
The company moved towards a final investment decision and financing workstream in October when it welcomed Sibanye-Stillwater to its registry via a $96 million strategic placement following the establishment of a joint venture to develop the project.
Money secured from the placement will be used to cover the costs of the project to start of construction (including the purchase of certain long lead items) as well as for general working capital purposes.
Major step forward
ioneer managing director Bernard Rowe said the deal is a major step forward for Rhyolite Ridge.
“Sibanye-Stillwater shares our vision of becoming a major force in the battery materials supply chain and its investment further aligns our two companies as we look to bring into production,” he said.
“With its ability to produce lithium materials on-site, we believe Rhyolite Ridge will eventually become an integral part of the US electric vehicle supply chain.”
Due diligence
In December, ioneer was invited to participate in a due diligence process for an advanced technology vehicles manufacturing loan program managed by the US Department of Energy’s loan programs office.
The invitation was based on ioneer’s application for Rhyolite Ridge project financing being “substantially complete” after a 10-month process but was not an assurance that the loan will be secured.
Due diligence will include more detailed engagement by the loans office and third-party experts and will be potentially followed by term sheet negotiations and credit approval considerations.
Debt funding
ioneer said it is continuing to engage in talks with potential debt funders and has been encouraged by feedback received to date.
Sibanye-Stillwater and ioneer will work together to secure debt financing on acceptable terms to ensure Rhyolite Ridge is fully financed to production.
Progress continues to be made on submission documents for a secondary listing of ioneer shares on the NASDAQ exchange, which is scheduled to occur before mid-year.
Engineering and vendor packages
ioneer has been focusing on advancing engineering and vendor packages with the aim of being ready to support construction mobilisation following award of a full notice to proceed.
During the quarter, the company achieved cumulative completion of approximately 1,100 execution deliverables from engineering firms Fluor and SNC Lavalin in addition to 1,000 deliverables from vendors.
Packages awarded included the auxiliary boiler, deaerator, boiler feedwater pump, fire pump, fabric buildings and fuel storage. Meanwhile, vendor engineering for the dryer package, acid plant equipment, evaporation and crystallisation system, and lithium carbonate reactor is in progress.
Current program of work
ioneer’s program of work for Rhyolite Ridge over the current quarter includes progressing binding offtake agreements for lithium sales, securing debt funding and completing associated due diligence, finalising plans for early-stage exploration of the North Basin, and continuing engineering work to further decrease the project’s execution risk.
“We continue to see increased demand globally for lithium products and are well positioned to capitalise on US efforts to secure critical minerals supply chains for end uses like electric vehicles and renewable energy infrastructure,” Mr Rowe said.
“An in in-bound enquiries from potential offtake parties has only strengthened this quarter, as lithium supply is short, and prices have been rising.”