Lithium Ionic Secures $266 Million LOI to Advance Project Financing

Lithium Ionic has secured a significant step forward in the financing of its flagship Bandeira lithium project in Minas Gerais, Brazil, with the Export-Import Bank of the United States (EXIM) granting preliminary approval for a $266 million loan guarantee. This financing, which covers 100% of the project's initial capital costs as outlined in a May 2024 feasibility study, marks a pivotal moment for the company as it works to advance its critical lithium asset in Brazil’s prominent Lithium Valley.

The loan guarantee arrangement, which is subject to the completion of due diligence and a definitive financial agreement, will support the construction and development of the Bandeira project. Once fully operational, the mine is projected to produce approximately 17.2 million tonnes of lithium carbonate equivalent (LCE) over a 14-year period, with an average annual output of 178,000 tonnes of high-quality spodumene concentrate at 5.5% Li2O. The project’s robust economics are underpinned by a post-tax net present value (NPV) of $1.3 billion, an internal rate of return (IRR) of 40%, and an attractive payback period of just 3.4 years based on a spodumene price of $2,277 per tonne.

Located in the heart of Brazil’s Lithium Valley, the Bandeira project is well-positioned to benefit from world-class infrastructure, including proximity to major lithium producers such as CBL’s Cachoeira mine and Sigma Lithium’s Grota do Cirilo project. The Bandeira site itself spans just 1% of Lithium Ionic’s 141.8-square-kilometer land package in the region, which also includes the company’s Salinas project, situated approximately 120 kilometers to the north. The scale of Lithium Ionic’s landholdings provides ample opportunities for further expansion and resource development.

The financing from EXIM Bank reflects a growing strategic focus on critical minerals, especially lithium, as part of the global energy transition and the electrification of transportation. EXIM’s support aligns with its broader objectives under the China and Transformational Export Program, aimed at securing the U.S. supply chain for key materials necessary for the clean energy and electric vehicle sectors. This funding not only advances the Bandeira project but also strengthens Lithium Ionic’s position in the rapidly expanding global lithium market.

Lithium Ionic is already making significant progress on the project, with its feasibility study indicating a low operating cost of $444 per tonne and a capital expenditure (CAPEX) of $266 million for the Bandeira development. The company expects to commence construction and production within the next two years, with the goal of becoming a key supplier of lithium for the global EV battery market. The Bandeira project’s strong economics and strategic location provide Lithium Ionic with a solid foundation for future growth, with further exploration and development potential in the Lithium Valley region.

Following the announcement of the loan guarantee, Lithium Ionic’s stock rose by 4.3%, trading at C$1.01 per share, bringing the company’s market capitalization to approximately C$154 million ($110 million). This marks a positive response from the market, underscoring investor confidence in the project’s potential and the company’s prospects as it advances its flagship lithium development in Brazil.