Lithium Ionic advances project financing with LOI for $266m

Lithium Ionic will now collaborate with EXIM, the official export credit agency of the United States, to complete the due diligence process and finalize a definitive financial agreement.

According to the feasibility study, the Bandeira project has an after-tax net present value (NPV) of $1.3 billion, a post-tax internal rate of return of 40%, and initial capex of $266 million, which includes a 15% contingency. The after-tax payback period is estimated at 3.4 years.

The underground mine is projected to produce approximately 17.2 million tonnes of lithium carbonate equivalent (LCE), grading 5.5% lithium oxide (Li2O), over a 14-year lifespan starting in 2026. This estimate assumes spodumene prices of $2,277 per tonne.

Bandeira is located just northeast of Araçuaí, in a region well-connected by logistics and infrastructure. The project’s claims cover 1.6 sq. km, which represents only about 1% of Lithium Ionic’s 141.8-sq.-km land package in the “Lithium Valley,” where the company also owns its Salinas project, approximately 120 km north of Bandeira.

The company anticipates construction and production to commence within the next two years.

Shares of Lithium Ionic rose 4.3% by 11:40 a.m. in Toronto, giving the company a market capitalization of approximately C$154 million ($110 million).