Lithium Ionic Corp - The Western Hemisphere's Next Significant Lithium Producer

As one of the major contributors to global greenhouse gas emissions, the transportation sector is increasingly in the spotlight. With over 1.3 billion internal combustion engine vehicles currently in use worldwide, experts and leaders are advocating for a significant shift towards electric vehicles (EVs). This transition is driving a growing demand for lithium, a key component in EV batteries and the largest source of demand for the metal.  

According to projections, lithium demand is expected to quadruple by 2030; however, the supply of the critical mineral is expected to become an issue, with an acute supply gap expected towards the end of the decade. 

A new lithium company that should be on your radar, who is expected to start producing lithium just as the supply shortage is expected to begin, is Lithium Ionic Corp. LTHCFLTH. The Company launched in early 2022 and is quickly growing and developing its hard rock spodumene-hosted lithium deposits in Minas Gerais State, Brazil, and expects to be an important part of the future lithium supply chain. 

Last month, Lithium Ionic published results from a PEA that support a long-life and low-cost spodumene concentrate mining project with a post-tax net present value of US$1.6 billion. As of November 28, 2023, the company’s market capitalization is about US$153 million. 

Bandeira Lithium Project - Granted Priority Status

Since Lithium Ionic launched in May 2022, the company’s portfolio of properties has increased more than tenfold to 14,182 hectares (or 35,044 acres) within a region that state officials have recently coined the “Lithium Valley”, which is emerging as a  globally significant hard rock lithium-producing district. Currently, the company is focused on advancing its flagship Bandeira Project toward a production decision. Bandeira accounts for only about 1% of its total landholdings. 

The Itinga basin, also known as Brazil’s “Lithium Valley,” is situated within the Eastern Brazilian Pegmatite Province, the largest lithium pegmatite province in South America. Experts view it as one of the most significant emerging lithium spodumene basins globally. The region boasts excellent infrastructure, including highway access, 100% hydro-electrical grid power, water, and nearby commercial ports. 

In July 2023, Lithium Ionic’s projects were granted priority status by the state of Minas Gerais regional government bodies, facilitating the acceleration of approvals and licensing through the development process and paving the way toward mine operation and production. Construction permits are expected to be obtained by mid-2024. 

Last month, the Company entered into an agreement with Cemig Distribuição S.A., the largest electricity distributor in Brazil to connect to the existing power infrastructure. Securing access to low-cost renewable hydroelectric power was a major de-risking milestone towards its goal of becoming a near-term lithium producer.

In October 2023, Lithium Ionic reported an updated mineral resource of ~30Mt (M&I + Inferred) grading ~1.38% Li2O, which supported a robust Preliminary Economic Study. The numbers support projections that the Bandeira Project can be a highly profitable, long-life operation that could satisfy at least a part of the projected lithium supply shortage. Under such a realization, Lithium Ionic Corp would be the tether through which the lithium supply meets its demand, a position of power and profits. 

Since reporting these results, Lithium Ionic has announced multiple sets of drilling results at Bandeira, which they expect will support and improve the mining project in the Feasibility Study, which they expect will be complete in early 2024. While advancing the Bandeira project towards a production decision, the Company is also exploring and drilling a number of its other properties in the region. The long-term growth potential of the Companies’ lithium deposits is impressive. The Bandeira property alone has delivered an impressive 84% resource growth rate in less than four months. 

The Bandeira project has more than one blueprint for success. The project is located next door to a privately owned lithium producer,  Companhia Brasileira de Litio’s Cachoeira mine, which has been producing lithium for more than 30 years. Sigma Lithium’s Grota do Cirillo project is also operating within a few kilometres from Bandeira – a company which has grown to a +US$3 billion dollar company in the last few years as it transitioned from developer to producer.  The proximity to these successful operations provides compelling valuation goal posts as they advance their projects. 

“The growth trajectory of this deposit since we began drilling it in April 2022 is a testament to its significance within our large portfolio of properties in this belt and will continue to be a key driver of our success,” said Lithium Ionic CEO Blake Hylands. “Bandeira represents just a fraction of our land holdings, and our team strongly believes that our success at this property could be replicated at our other properties in the region with the same effort.”

This Canadian company is advancing its lithium projects in Brazil’s mining-friendly jurisdiction which is quickly emerging as a world-class hard-rock lithium district. Follow its progress by visiting lithiumionic.com. 

Featured photo by Kumpan Electric on Unsplash.

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