ioneer Ltd, achieving a significant milestone

Team Veye | 22 May 2020 ASX - INR
ioneer Ltd, achieving a significant milestone

ioneer Ltd (ASX: INR)

ioneer Substantially Completes Asian Boric Acid Distribution and Sales Network

ioneer Ltd (ioneer or the Company) (ASX: INR), an emerging lithium–boron supplier, on 21 May 2020 announced that it had secured two separate boric acid Distribution and Sales Agreements (Agreements) for the supply of boric acid from ioneer’s Rhyolite Ridge Lithium-Boron Project (‘Project‘) in Nevada, USA, substantially completing its Asian boric acid distribution and sales network.

(Chart source: TradingView)

Highlights 

  • Three-year boric acid Distribution and Sales Agreements signed with Kintamani Resources Pte Limited, and Boron Bazar Limited, covering critical additional territories in Asia. 
  • The new agreements, plus the binding Dalian Jinma offtake agreement, announced December 2019, places 100% of ioneer’s first year of boric acid production, and more than 85% of boric acid production in years two and three. 
  • The signing of these Agreements completes the key components of ioneer’s current Asian boric acid marketing plan to secure direct offtake or distribution and sales agreements with recognised industry participants for most major Asian countries. 
  • Distribution and Sales Agreements expected to commence Q2 2023 as Rhyolite Ridge production commences. 
  • Boron production expected to account for approximately 30% of revenue at Rhyolite Ridge. Its reliable and steady revenue contribution helps secure Rhyolite Ridge at the bottom of the global lithium cost curve.

           

(Graphic Source – Company Reports)

The Agreements were signed with: 

  • Kintamani Resources Pte Limited (Kintamani) for the territories of Malaysia, Indonesia, Singapore, Thailand, Vietnam and the Philippines. 
  • Boron Bazar Limited (Boron Bazar) for the territories of Bangladesh, India, Pakistan and Myanmar. (Data Source – Company Reports)

 

Veye’s Take

Signing these Distribution and Sales Agreements mean 100% of ioneer’s first year of boric acid production is taken care of in either binding offtake agreements or through distribution and sales agreements. This is a significant milestone for ioneer to Rhyolite Ridge becoming operational. These Agreements demonstrate the high demand for sustainably produced boric acid and further underpins the Project’s compelling economics. Boric acid sales are expected to account for approximately 30% of average annual revenue at Rhyolite Ridge. The boric acid revenue is equivalent to approximately 72% of all-in sustaining cash costs for the Project. The stock was trying to make a cup and handle pattern which could have been bullish. Although the RSI has turned up the handle is still under formation. The stock crossing $0.135 with volumes can confirm this and then it can have the potential of rising significantly. Veye maintains a "Hold" on “Ioneer Ltd” at the current price of $0.12

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