ioneer moves to due diligence stage for US Department of Energy loan application to develop Rhyolite Ridge
The United States Department of Energy’s advanced technology vehicles manufacturing loan program has $17 billion in authority to finance critical minerals projects that meet its criteria.
As it progresses plans for developing its Rhyolite Ridge lithium-boron project, ioneer (ASX: INR) revealed it has been invited to undertake the due diligence process for an advanced technology vehicles manufacturing loan program.
The United States Department of Energy’s (DOE) Loan Programs Office has invited ioneer into due diligence process following ioneer’s application in early 2021.
ioneer applied for the DOE loan to assist with financing development of Rhyolite Ridge which is expected to produce 22,000 tonnes per annum of lithium carbonate/hydroxide and 174,000tpa of boric acid.
This level of output would make it the largest lithium and second largest boric acid producer in the US.
The DOE’s advanced technology vehicles manufacturing loan program currently has $17 billion in authority that can be used to finance critical materials projects that fit its criteria of “reinvigorating, advancing and transforming America’s energy infrastructure”.
ioneer began its application for the DOE loan in the first quarter of this year, with due diligence to include more detailed engagement with the Loan Programs Office and third-party experts.
If this phase is successful, ioneer may be invited to negotiate a term sheet followed by consideration for the Loans Programs Office credit approval process.
“We are pleased to have reached this milestone in our discussions with the US DOE, and we look forward to working through due diligence under the advanced technology vehicles manufacturing loan program,” ioneer managing director Bernard Rowe said.
Advancing Rhyolite Ridge project
Mr Rowe said Rhyolite Ridge will be an “integral part of the US electric vehicle supply chain”.
This potential debt financing follows our announcement of a joint venture with Sibanye Stillwater to fund the equity portion of the project.”
A definitive feasibility study that was completed in April 2020, estimated about US$785 million would be required to develop Rhyolite Ridge.
The project has a 146.5 million tonne lithium and boron resource and reserve of 60Mt lithium and boron.
Mine life is forecast at 26 years to generate annual revenue of US$422 million and earnings before interest tax depreciation and amortisation of US$288 million.
ioneer plans to be producing from the project in the second half of 2024.
To assist with financing Rhyolite Ridge, Sibanye-Stillwater is acquiring 50% of the project for US$490 million (A$668 million).
Sibanye-Stillwater also invested US$70 million in ioneer via a placement. ioneer is using placement proceeds to progress long-lead items and fund medium term capital requirements to fast-track time to first production.