ioneer makes headway towards a final investment decision for Rhyolite Ridge
ioneer aims to be the world’s “lowest cost lithium producer”.
Advanced explorer ioneer’s (ASX: INR) offtake negotiations for lithium and boron from its Rhyolite Ridge project in Nevada during the June quarter culminated in last week’s announced deal with Ford.
ioneer managing director Bernard Rowe referred to the three-month period as one of “determined work”.
He said real advances in sales and marketing were made regarding lithium offtake agreements.
“In addition, progress was made on permitting, the US Department of Energy Loans Program Office detailed due diligence process, other project financing work and continued detailed engineering.”
The sales and marketing negotiations culminated in last week’s announcement that Ford would purchase 7,000 tonnes a year of lithium from Rhyolite Ridge starting in 2025.
This offtake deal represents about 34% of the planned lithium carbonate output from the project over the first five years.
ioneer now has almost 70% of its planned lithium carbonate production from Rhyolite Ridge tied up in offtake deals, with EcoPro Group making a 7,000tpa purchase commitment in February.
Nasdaq listing
While advancing offtake negotiations during the quarter, ioneer progressed its secondary stock exchange listing.
This resulted in ioneer’s debut on the US Nasdaq on the 30 June under an American Depositary Receipt (ADR) level two listing.
The strategy behind the listing was to gain wider exposure to North American investors and provide them with opportunity for broader participation in share ownership and the company’s assets.
Permitting and ESG
As ioneer pushes Rhyolite Ridge to first production in 2025, work on three remaining state and federal government permits continued during the June quarter.
This resulted in securing a state-based air quality permit in June and a state-based water pollution control permit in July.
The company is awaiting approval for its plan of operation from the US Department of Interior.
Work has also progressed for ioneer’s ESG programs, with most draft protocols developed and existing documentation undergoing comprehensive reviews for compliance.
Debt funding, and engineering, vendor packages
The company was invited by the US Department of Energy (DOE) Loan Programs Office (LPO) in December last year to undertake due diligence as part of a potential funding agreement.
ioneer had applied for a DOE loan to support its capital requirements to develop Rhyolite Ridge.
The LPO program has about $17 billion in authority to lend out to finance qualifying critical materials projects that help, reinvigorate, advance and transform the US’ energy infrastructure.
Due diligence for the program was continued during the June quarter, along with engaging with a number of other potential debt funders.
In readiness for the green light to develop Rhyolite Ridge, ioneer also progressed engineering and vendor packages.
Procurement activity has focused on long lead items for initial construction.
ioneer is also reviewing the construction plan and commissioning requirements.
Well-funded to advance Rhyolite Ridge
The company closed out the June quarter with $136.6 million in the bank.
Funds will be used to obtain final permits and progress work streams required to lead to a final investment decision for Rhyolite Ridge. This is expected to be made mid-next year and no later than December 2024.
Once Rhyolite Ridge is operational, ioneer plans to produce 20,600tpa of lithium carbonate/lithium hydroxide and 174,400tpa of boric acid, with both products having positive market outlooks.