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ioneer Ltd

ioneer advances Rhyolite Ridge DFS for first lithium and boron production in 2021

Snapshot

Last year’s pre-feasibility study demonstrated the project’s large scale, long life and low-cost lithium production.

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Quick facts: ioneer Ltd

Price: $0.17

Market: ASX
Market Cap: $243.37 m
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ioneer Ltd (ASX:INR) advanced development of its Rhyolite Ridge Lithium-Boron Project during the December quarter, completing a pre-feasibility study (PFS) that details a low-risk project with strong economics.

Engineering and design firm Fluor Corporation (NYSE:FLR) was appointed to complete the project’s definitive feasibility study which is expected to be finished in quarter three 2019.

The work program for the next few months includes discussions for potential off-take, financial and strategic partners, flow sheet optimisation and completion of infill and extensional drilling.

An ore reserve and mineral resource update based on the drilling results will be undertaken, aiming to upgrade the starter pit’s resource to the measured category.

The company also appointed Ian Bucknell as chief financial officer, who will play a key role in both financing the project and building necessary organisational capabilities and processes.

 

ioneer managing director Bernard Rowe said the Rhyolite Ridge PFS demonstrated the project’s scale, long life and potential to become the lowest-cost lithium producer in the world.

He said: “With a strong and highly experienced technical team based in the US, Fluor is the perfect partner to complete the Rhyolite Ridge DFS and work with us to deliver the project into production.”

Rowe also noted the potential for Rhyolite Ridge to become the largest lithium producer in the United States.

The PFS estimated production costs of US$1,796 a tonne of lithium carbonate with a boric acid credit.

Production would begin in 2021 with an initial plus-30-year mine life and the opportunity to extend.

Annual production will amount to 20,200 tonnes of lithium carbonate and 173,000 tonnes of boric acid per year.

READ: ioneer director Alan Davies steps up and buys shares on market

Fluor has started work on the DFS with project setup, scheduling and zero-base-design completed during the quarter.

Major process activities are underway including trade-off studies relating to the sulphuric acid plant and final lithium products.

Fluor president mining & metals Tony Morgan said Rhyolite Ridge would be a flagship project for Fluor, its client ioneer and for the United States.

He noted the project’s status as one of the world’s largest undeveloped lithium-boron deposits and one of the largest greenfield resource projects in the United States.

Morgan added: “We’ve assembled a strong and highly experienced team to deliver this exciting project.”

Indicative timeline for Rhyolite Ridge

 

READ: ioneer’s high-grade lithium-boron drill results indicate potential to improve cash flow

A drilling program comprising about 40 holes is currently being undertaken to upgrade the lithium-boron mineral resource to the measured category.

The program also aims to extend the high-grade, shallow mineralisation to the south of the proposed starter pit.

With the gently-dipping lithium-boron zone averaging 20 metres in thickness, extensions to the current resource are likely to add significant near-surface tonnes.

Initial assays for the first nine holes were released during the quarter which indicated higher boron grades of about plus-30% than currently modelled for the initial mining area.

READ: ioneer appoints Fluor for definitive feasibility study

Rowe continued: “Initial results from our 2018-19 drilling program have already indicated that cash flows in the first few years of mining are expected to be improved by increasing boron grades mined and lowering the strip ratio.

“With approximately $70 million cash, we are able to undertake the work required to rapidly progress Rhyolite Ridge towards production.

“With the in-depth knowledge provided by the PFS, the company is well positioned to advance serious discussions with a diverse range of potential market and finance partners.”

READ: Global Geoscience becomes ioneer of sustainable future with a new name

Boron grades in the first three years of the PFS mine plan average 1.03% boron (equivalent to 5.9% boric acid).

The recent drilling results are likely to increase the boric acid grade in the first few years of the starter pit.

Each 1% increase in the boric acid grade would provide a revenue increase of about US$6 a tonne of ore processed, assuming a boric acid sale price of US$700 a tonne.

At the PFS base case processing rate of 2.6 million tonnes per year, each 1% increase also equates to an additional US$15.6 million of revenue per annum.

Looking east over ioneer's Rhyolite Ridge south basin

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