PERTH (miningweekly.com) – The Financial Surveillance Department of the South African Reserve Bank (SARB) has approved a $490-million deal between ASX-listed ioneer and New York-listed miner Sibanye-Stillwater.
The two companies in September struck the $490-million deal under which Sibanye-Stillwater would acquire 50% interest in ioneer’s Rhyolite Ridge lithium/boron mining project, in Nevada.
ioneer has also agreed to provide Sibanye-Stillwater with an option to participate in 50% of the North basin, upon the election of Sibanye-Stillwater to contribute an additional $50-million.
Sibanye-Stillwater also agreed to a strategic placement of $70-million of ioneer’s shares at the developer’s ten-day volume-weighted average price of September 15. The proceeds from the placement would be used towards development capital requirements, medium-term working capital needs and to progress long-lead items to minimise time to production.
The SARB approval was a condition of both the joint venture transaction and the Sibanye-Stillwater placement. The remaining conditions include the receipt of necessary permits and binding debt funding commitments, which are expected to be satisfied by the second half of 2022.
“We are delighted to have reached this important milestone and look forward to working with Sibanye-Stillwater to satisfy the remaining conditions precedent across both transactions, including the shareholder vote in relation to the Sibanye-Stillwater placement this week,” said ioneer MD Bernard Rowe.
“Receiving these approvals represents the first step in our long-term partnership with Sibanye-Stillwater, which we expect will unlock significant value at Rhyolite Ridge. We are excited to continue working with Sibanye-Stillwater, with a focus on securing debt finacing on acceptable terms and progressing the necessary permits and approvals to ensure the successful delivery of the project,” said Rowe.
A 2020 definitive feasibility study estimated that the project would require a capital investment of $785-million and would produce an average of 20 600 t/y of lithium carbonate, converting in the fourth year of operation to 22 000 t/y of battery-grade lithium hydroxide and 174 000 t/y of boric acid over a 26-year mine life.
“The signing of a strategic partnership with Sibanye-Stillwater is the most significant milestone in the history of ioneer. The partnership will provide the majority of funding to bring Rhyolite Ridge into operation and is a testament to the importance of this project in supplying critically needed lithium chemicals into US supply chains. Sibanye-Stillwater is a strong strategic partner with a proven track record of developing and operating major mining projects around the world, including the US,” Rowe said in the company’s quarterly report on Wednesday.
“The quarter saw significant progress towards commencement of construction of Rhyolite Ridge. We have now been awarded the air and water permits necessary for project approval. The awarding of the water pollution control permit during the quarter means we now have two of the three critical permits required for construction. We are continuing to correspond with relevant US regulators on the publication of the notice of intent, which will lead to a record of decision for an approved plan of operation, which is the final approval for the project.
“We also signed three material engineering contracts in the period, with international partners, FLSmidth, Veolia and DuPont Clean Technologies, which have all commenced design and engineering work on the project.
“As the most advanced lithium development project in the US, ioneer is in a strong position to capitalise on the increased demand for lithium products in line with the US government’s efforts to secure critical minerals supply chains for end uses like electric vehicles and renewable energy infrastructure in the US. There was a noticeable uptick in inbound enquries from potential offtake parties this quarter, and the company is assessing multiple lithium supply opportunities.”