High-Grade Lithium Intercepts Highlight Ongoing Growth Potential of Brazilian Project

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Lithium Ionic Corp. (LTH:TSX.V; LTHCF:OTCQX; H3N:FSE) has announced significant drilling results from its flagship Bandeira Lithium Project, located in northern Minas Gerais, Brazil, within the region commonly referred to as "Lithium Valley." The recent results include intercepts that extend the mineralized pegmatites and identify new zones of high-grade lithium mineralization, supporting ongoing efforts to define and expand the resource base.

Highlights from the drill program, as mentioned in the news release, include:

Hole ITDD-24-280:

• 16.00m grading 1.77% lithium oxid (Li₂O) from 137.41m, incl. 9.00m grading 2.36% Li₂O

Hole ITDD-24-268:

• 19.60m grading 1.33% Li₂O from 83.74 meters, incl. 8.47m grading 1.81% Li₂O

Hole ITDD-24-283:

• 14.00m grading 1.81% Li₂O from 105.10m

Hole ITDD-24-285 (See section in Figures 2 and core photo in Figure 3):

• 14.00m grading 1.54% Li₂O from 157.87m

Hole ITDD-24-282:

• 14.00m grading 1.30% Li₂O from 138.05m
• 11.07m over 1.34% Li₂O from 200.75m

Hole ITDD-24-270:

• 6.67m grading 2.11% Li₂O from 70.65m
• 12.00m grading 1.09% Li₂O from 110.03m

Hole ITDD-24-290:

• 7.78m grading 1.58% Li₂O from 176.45m

Hole ITDD-24-275:

• 8.96m grading 1.32% Li₂O from 206.21m

Hole ITDD-24-269:

• 4.75m grading 2.28% Li₂O from 88.72m

Lithium oxide (Li₂O) is a key compound used in lithium-ion battery production, with grades indicating the concentration of lithium within the mineralized zones. These results bolster the company's confidence in the Bandeira resource while highlighting near-surface opportunities that could optimize future mining plans.

CEO Blake Hylands emphasized the project's potential, stating in the press release, "This year's field campaign was highly successful in extending the surface footprint of our multi-kilometer gold system. These results further suggest that significant potential remains on the Property yet to be tested with the drill bit, including the southeastern extension of the North Hixon zone, which remains a high-priority target for the company."

The Bandeira project is part of Lithium Ionic's 17,000-hectare land package, with this property representing just 1% of the total.

Analysts Highlight Strong Potential and Strategic Backing for Lithium Ionic's Flagship Project

Greg Jones of BMO Capital Partners, in his November 28, 2024, analysis, highlighted the Bandeira Lithium Project as a central component of Lithium Ionic's growth. He referenced the May 2024 Feasibility Study, which projected a post-tax net present value (NPV) of US$1.3 billion and an internal rate of return (IRR) of 40%.

Varun Arora of Clarus Securities assigned a "Speculative Buy" rating to Lithium Ionic, with a price target of US$8.00. 

Jones also noted the project's annual production target of 178,000 tonnes of 5.5% Li₂O spodumene concentrate, with operating costs at US$444 per tonne. He emphasized that Bandeira's access to low-cost hydroelectric power, reliable transport infrastructure, and proximity to export markets enhanced its competitiveness in the global lithium market.

Varun Arora of Clarus Securities, on November 27, 2024, described the non-binding Letter of Interest (LOI) from the Export-Import Bank of the United States (EXIM) as a critical de-risking milestone for the Bandeira Project. He stated, "Securing up to 100% of the project CAPEX in non-dilutive financing with a US gov. agency, a highly coveted strategic partner, is a big win for the project and the team." Arora assigned a "Speculative Buy" rating to Lithium Ionic, with a price target of US$8.00. He further noted that incorporating additional inferred resources into the mine plan could potentially extend Bandeira's mine life to over 20 years and increase its NPV to US$1.7 billion.

Both analysts emphasized the importance of Bandeira's strategic location in Brazil's Lithium Valley, its strong economic metrics, and the support from international financial institutions. They agreed that these factors positioned Lithium Ionic as a significant player in the growing lithium market, aligning with global electrification and renewable energy trends.

Lithium Sector: Recycling, Renewable Energy, and Market Growth Opportunities

As Allied Analytics reported on November 27, the global lithium-ion battery recycling market was projected to grow from a valuation of US$1.33 billion in 2020 to US$38.21 billion by 2030. This represented a compound annual growth rate (CAGR) of 36% from 2021 to 2030. The study emphasized the increasing importance of lithium-ion battery recycling due to its role in reducing reliance on mining, recovering valuable materials, and minimizing environmental risks. The report noted that Asia-Pacific was anticipated to experience the fastest growth, with a CAGR of 40.8% during the forecast period, driven by demand in electric vehicles, renewable energy storage, and consumer electronics.

Also, on the 27th, Fastmarkets reported on ongoing challenges in the lithium recycling sector, including significant declines in lithium carbonate spot prices in key markets such as China, Japan, and Korea. Despite this, Fastmarkets research indicated strong future growth in the supply of battery scrap and end-of-life batteries, which was forecast to rise from 96,000 tonnes in 2024 to 252,000 tonnes within five years. These projections underscored the increasing volumes of recyclable materials entering the market, reflecting the sector's long-term potential.

Research and Markets, also in their November 27 report, provided further insights into the role of lithium-ion batteries in the solar energy market. Lithium-ion batteries were identified as the leading product type, holding an estimated 83.8% market share in 2024 due to their superior energy density, efficiency, and longevity. The report attributed this dominance to the growing adoption of solar energy systems, driven by declining costs of solar technology and energy storage solutions, alongside governmental incentives for clean energy. These factors collectively positioned lithium-ion batteries as a critical component in both the renewable energy and recycling ecosystems.

Lithium Ionic's Catalysts

Lithium Ionic's Bandeira Lithium Project has seen steady progress toward development, supported by recent advancements and strategic milestones. The company's May 2024 feasibility study outlined a robust 14-year mine life, with projected production of 178,000 tonnes of 5.5% Li₂O spodumene concentrate annually. This study highlighted the project's cost-efficiency, with on-site operating costs estimated at US$444 per tonne and all-in delivered costs at approximately US$557 per tonne..

In November 2024, the company secured a non-binding Letter of Interest (LOI) from the Export-Import Bank of the United States (EXIM) for up to US$266 million in debt financing. This funding provides a clear pathway for developing the Bandeira Project and marks a major milestone in the company's financing strategy.

Other recent developments include the October 2024 initiation of Engineering, Procurement, and Construction Management (EPCM) services in collaboration with Hatch and Reta Engenharia. This move signifies a transition into the construction phase of the project.

Ownership and Share Structure

According to the company, management and insiders own 20% of the Lithium Ionic. 

One of the insiders, President & Director Helio Diniz, owns 5.52%, Director Michael Lawrence Guy owns 5.10%, Director David Patrick Gower owns 2.56%, and Andre Rezende Gumaraes owns 2.52%, according to Reuters.

30% is held by institutional investors. Reuters reports Waratah Captial Advisors owns 7.01%, JGP Gestao de Recursos Ltda owns 2.69%, RBC Global Asset Management Inc owns 1.94%, Sprott Asset Management LP owns 1.55%, BMO Asset Management owns 1.30%, and IXIOS Asset Management SA owns 1.20%. The rest is retail.

Lithium Ionic has 158.58 million shares outstanding and 131.15 million free-float traded shares.

The company's market cap is CA$135 million, and it trades in a 52-week range of CA$0.41 - 2.24 per share.