THE DRILL SERGEANT: – ioneer Ltd (ASX: INR) announced a 280 per cent upgrade to the Ore Reserve estimate for the company’s 100 per cent-owned Rhyolite Ridge lithium-boron project in Nevada, USA.
ioneer informed the market that the Ore Reserve at Rhyolite Ridge has been increased by 44.2 million tonnes and is now estimated to contain:
60mt at 1,800ppm lithium (equivalent to 1% lithium carbonate) and 15,400ppm boron (equivalent to 8.8% boric acid);
Containing 0.6mt of equivalent lithium carbonate and 5.3mt of equivalent boric acid.
This represents an increase of 0.42mt of lithium carbonate and 4.3mt of boric acid compared to the company’s previous Ore Reserve in December 2018.
“The 60 million tonne Ore Reserve provides the foundation for a very long mine life at the Rhyolite Ridge project, with clear potential for expansion and extension underpinned by the 146.5 million tonne Mineral Resource,” ioneer managing director Bernard Rowe said in the company’s announcement to the Australian Securities Exchange.
“Importantly, the planned Stage 1 quarry is exclusively Proved Reserves with higher-than-average lithium grades, which will provide higher cash flow in the early years of the project.
“The lithium-boron mineralisation remains open, particularly to the south where it continues to shallow and is generally higher in grade, and we expect further increases to Resources and Reserves with additional drilling.
“With the recent focus by the US Government on ensuring the supply of critical minerals, ioneer is well placed to become the first major domestic supplier of lithium to the American electric vehicle industry.”
The company backed up the Ore Reserve announcement with the results of a recently completed Definitive Feasibility Study that produced outcomes, including:
Project economics with an after-tax NPV of US$1.265 billion, and an unlevered, after tax internal rate of return (IRR) of 20.8 per cent;
The DFS confirmed plans for a large, long-life, low-cost operation, producing lithium carbonate, boric acid and then battery-grade lithium hydroxide;
All-in sustaining cash cost of US$2,510 per metric tonne lithium carbonate equivalent (LCE) places the Rhyolite Ridge project at the bottom of the global lithium cost curve;
Stable boric acid revenue helps ensure EBITDA margin of 68.1 per cent based on average production over Life of Mine (LOM); and
Average LOM production 20,600 tonnes per annum of lithium carbonate, converting in year four to 22,000tpa of battery-grade lithium hydroxide, and 174,400tpa of boric acid.
“The DFS confirms our long-standing belief that Rhyolite Ridge is a world-class asset that will be transformational for ioneer and its shareholders,” Rowe declared.
“Rhyolite Ridge will be the single most attractive resource to economically produce lithium carbonate, lithium hydroxide, and boric acid globally.
“The co-production of boric acid enables us to produce lithium, net of boric acid credits, at the lowest possible cost.
“Rhyolite Ridge’s projected position at the very bottom of the global lithium industry cost curve will enable us to achieve industry-leading EBITDA margins, an excellent return on investment, and a quick payback across a range of commodity price environments.
“Additionally, we are located in Nevada, a mining-friendly jurisdiction in the US, where lithium is recognised as a strategically important mineral, critical to a sustainable future.
“These benefits make Rhyolite Ridge an attractive project to strategic partners, which we have witnessed in discussions to date.
“On top of strong fundamentals, we expect the long-term demand for lithium to continue to increase when the Rhyolite Ridge production comes fully on-stream.
“I am proud of the ioneer team and our partners for their hard work over the last eighteen months, which has enabled us to successfully complete a robust and comprehensive DFS.
“We are now one important step closer to becoming a leading low-cost, long-life producer of lithium.”