PERTH (miningweekly.com) – Dual listed Ioneer on Monday confirmed the US Department of Energy (DoE) had conditionally committed to a $700-million loan to develop the Rhyolite Ridge lithium/boron project, in Nevada.

Precious metals miner Sibanye-Stillwater, which is aiming to joint venture (JV) on the project, at the end of last week flagged the conditional commitment from the DoE under its Loan Programs Office’s Advanced Technology Vehicles Manufacturing (ATVM) loan programme.

Ioneer said on Monday that under the term sheet finalised with the DoE, the loan would have a ten-year term and an interest rate fixed from the date of each advance for the term of the loan, at applicable US Treasury rates.

“We are pleased to have finalised the term sheet and received a conditional commitment from the DoE for up to a $700-million loan from the ATVM program. The conditional commitment is the culmination of 23 months of discussions with, and due diligence by, the Loan Programs Office and it represents a significant milestone for Rhyolite Ridge. We look forward to working with the DoE and Sibanye-Stillwater to complete the remaining milestones to start construction of Rhyolite Ridge,” said Ioneer MD Bernard Rowe.

The proceeds from the DoE loan, along with Sibanye Stillwater’s expected equity contribution to secure a 50% stake in the Rhyolite Ridge project once all conditions precedent for the JV have been fulfilled or waived, as applicable, are anticipated to fund a substantial part of the preliminary capital expenditure estimate from the revised plan of operations included in the application submitted to the DoE.

The final loan is subject to approval of the Ioneer and Sibanye-Stillwater boards, receipt of all material governmental consents necessary for the loan and the negotiation and execution of binding loan documents. When binding loan documents are signed, certain closing conditions must be satisfied before the loan commitment from DoE becomes effective and funds can be advanced.

Ioneer said on Monday that the company and Sibanye-Stillwater would continue to progress work on the engineering, complete additional drilling to delineate the southern limits of the deposit where mining is expected to commence and optimise the mine plan. Based on these outcomes, an updated capital and operating cost estimate would be provided to stakeholders before making a final investment decision.

A previously completed definitive feasibility study estimated that Rhyolite Ridge would produce 2.5-million tonnes of ore a year over a mine life of 26 years, producing a yearly average of 20 600 t/y of lithium carbonate/hydroxide and 174 400 t/y of boric acid.

The study estimated an initial capital cost of $785-million, and an after-tax net present value of $1.26-billion and an internal rate of return of 20.8%.