Sydney-based explorer ioneer (ASX: INR) has announced it will join forces with global precious metals miner Sibanye-Stillwater to develop its flagship Rhyolite Ridge lithium-boron project in the US state of Nevada.
The deal is considered a “transformational strategic investment” which underpins the quality of the project as well as ioneer’s future as a major lithium-boron producer in the US.
Under the terms of the joint venture, ioneer will maintain 50% equity and operator rights in the joint venture while Sibanye-Stillwater will contribute approximately US$490 million (A$668 million) in direct funding for the other 50% interest.
The companies will establish a technical committee to oversee project operations; a marketing committee to leverage existing business relationships and maximise the value of the joint venture’s products; and a third committee to collaborate on key environmental, social and governance initiatives.
ioneer has also agreed to provide Sibanye-Stillwater with an option to participate in 50% of Rhyolite Ridge’s North Basin project area on the contribution of an additional $68 million.
The companies will work collaboratively to secure debt financing to ensure Rhyolite Ridge is fully-funded through to production.
Capital requirements for the project’s development will be sourced from a strategic placement of $95 million in ioneer shares to be issued to Sibanye-Stillwater.
Under the terms of the placement, Sibanye-Stillwater will subscribe for 145.9 million ordinary shares at a price of $0.655 each.
Proceeds will be used for development capital, medium-term working capital needs and to progress long-lead items to minimise time to production.
ioneer’s financial adviser for the placement is Goldman Sachs, and its legal advisers are Vinson & Elkins (US) and Ashurst (Australia).
Sibanye-Stillwater’s financial adviser is Macquarie Capital, and Davis Polk & Wardwell (US) is acting as legal adviser.
Largest lithium mine
ioneer executive chairman James Calaway said the new joint venture would help develop Rhyolite Ridge into the largest lithium mine in the US.
“This agreement will allow us to unlock the tremendous, long-term value of Rhyolite Ridge,” he said.
“Sibanye-Stillwater has a proven track record of developing and operating major mining projects and is determined to become a major force in the battery materials supply chain [which makes it] an excellent partner to help realise the promise of this project.”
Rhyolite Ridge is the only known lithium-boron deposit in North America and one of only two such deposits worldwide.
A definitive feasibility study completed in 2020 validated the project as a world-class resource with “significant value creation potential” due to its low-cost, large-scale operation and long mine life.
The lithium-boron mineral resource has been estimated at 146.5 million metric tonnes and includes an ore reserve of 60 million metric tonnes.
ioneer expects to mine and process 63.8 million metric tonnes over a 26-year mine life at an average rate of 2.5 million metric tonnes per year.