Lithium Ionic arranges $11 million financing for Brazil projects

A drill rig at Lithium Ionic’s Bandeira project in northern Minas Gerais state in Brazil. Credit: Lithium Ionic

Lithium Ionic (TSXV: LTH) said on Monday it plans to raise C$15 million ($11m) through a private placement with its long-term shareholders. The offering will comprise units priced at C$0.90, each of which include one common stock plus warrant to buy another share at C$1.05.

The Toronto-based lithium developer is majority owned by the general public at nearly 60%, while insiders including CEO Blake Hylands and president Hélio Diniz hold approximately 20%.

Lithium Ionic’s shares shot up 7.6% in Toronto by midday to C$0.86 apiece, for a market capitalization of C$118.8 million ($87m).

Net proceeds will go towards Lithium Ionic’s two flagship projects, Itinga and Salinas, which together cover over 141 sq. km. of Brazil’s ‘Lithium Valley’, which is known for its hard-rock lithium production.

The Itinga project is situated in the same region as CBL’s Cachoeira lithium mine, which has produced lithium for over 30 years, and Sigma Lithium’s Grota do Cirilo project.

An integral part of the Itinga project is the Bandeira deposit, which has a measured and indicated resource of 23.7 million tonnes grading 1.34% lithium oxide (Li2O), for 783,000 tonnes of lithium carbonate equivalent (LCE).

A new feasibility study for Bandeira gave the project an after-tax net present value (at an 8% discount rate) of $1.3 billion, a post-tax internal rate of return of 40% and initial capex of $266 million. The underground mine would produce about 17.2 million tonnes of LCE grading 5.5% Li2O over a 14-year life, starting in 2026.

The company’s other project, Salinas, is about 120 km north of Bandeira and has a recent measured and indicated resource estimate of 5.9 million tonnes grading 0.97% Li2O for 158,678 tonnes of LCE. The Salinas project was acquired in March 2023 through the acquisition of Neolit Minerals. Lithium Ionic last week gained full ownership of the project.