TSX-V-listed Lithium Ionic has announced a major step forward in the development of its Bandeira lithium project, in Brazil, with a nonbinding letter of interest (LoI) from the Export-Import Bank (Exim) of the US.

The LoI outlines the potential for up to $266-million in debt financing to support the full capital expenditure (capex) for the project, as outlined in the May feasibility study.

The project, located in the heart of Brazil’s Lithium Valley in Minas Gerais, is a cornerstone of Lithium Ionic’s growth strategy, expected to play a key role in the global supply of lithium for energy storage and electric vehicle batteries.

“This LoI from Exim is a major achievement for Lithium Ionic, providing a clear pathway to fully fund the development of the Bandeira project," said Lithium Ionic CEO Blake Hylands. "Securing this support demonstrates the viability of the project, reflects the strength of our project and team, and the growing recognition and importance of Brazil’s Lithium Valley in the global move towards electrification."

The LoI outlines the potential for a maximum repayment term of 15 years and reflects Exim’s broader focus on critical minerals, particularly those essential for energy security and the electrification of transportation. The financing is in line with Exim’s China and Transformational Export Program, which aims to bolster the US supply chain for critical materials, including lithium, as part of its support for energy security and the global shift towards electric mobility.

The company has already made substantial progress on the project, with the May 2024 feasibility study demonstrating a robust 14-year mine life, an average production of 178 000 t/y of high-quality 5.5% Li₂O spodumene concentrate (equivalent to 24 200 t of LCE), and on-site operating costs of $444/t. The study also outlined a capex of $266-million, delivering a post-tax net present value of $1.3-billion and an internal rate of return of 40%.

While the Bandeira project represents just 1% of Lithium Ionic’s 17 000-ha landholdings in the Lithium Valley, the company views it as the cornerstone of its future growth. The region, which includes several high-profile lithium projects, has emerged as a major global hub for hard-rock lithium production. Bandeira is located near established lithium producers such as CBL’s Cachoeira mine and Sigma Lithium's Grota do Cirilo project.