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ioneer (ASX:INR) - Managing Director, Bernard Rowe
Managing Director, Bernard Rowe
Source: ioneer
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  • ioneer (INR) strikes a deal with South African mining giant Sibanye-Stillwater to form a joint venture (JV) for the Rhyolite Ridge Lithium-Boron Project
  • Sibanye-Stillwater will provide US$490 million (A$667.8 million) in funding for the project in return for a half-interest in the JV
  • INR will own the other 50 per cent of the JV company and will be responsible for operating and developing the project
  • Meanwhile, Sibanye-Stillwater is investing US$70 million (A$95.4 million) directly into ioneer in the form of a share placement at 65.5 cents each
  • Shares in ioneer are down 11.5 per cent and trading at 65.5 cents at 10:53 am AEST

ioneer (INR) has struck a deal with South African mining giant Sibanye-Stillwater to form a joint venture for the Rhyolite Ridge Lithium-Boron Project in Nevada.

Sibanye-Stillwater, which is listed on both the Johannesburg and New York stock exchanges, will provide US$490 million (A$667.8 million) in direct funding for the US project in return for 50 per cent of the joint venture, which INR referred to as JVCo.

INR will operate the project and own the other half of JVCo.

Under the terms of today’s deal, Sibanye has the option to contribute an extra US$50 million (A$68 million) in funding to also nab a 50 per cent interest in Rhyolite Ridge’s North Basin.

According to ioneer, the North Basin area is contiguous with other ioneer Nevada claims but separate from the Rhyolite Ridge project in the South Basin.

On top of the JV deal, Sibanye-Stillwater is also set to invest US$70 million (A$95.4 million) directly into ioneer in the form of an INR share placement.

Under the terms of this share placement, Sibanye will subscribe for 145.9 million ioneer shares at 65.5 cents each. This placement price is equal to INR’s 10-day volume-weighted average price but represents an 11.5 per cent discount to the company’s last closing price of 74 cents.

The Sibanye placement will increase INR’s total amount of shares on issue by 7.1 per cent.

INR Executive Chairman James Calaway spoke highly of Sibanye-Stillwater, saying ioneer is “extremely pleased” to welcome the mining giant as a strategic partner.

“Sibanye-Stillwater, with its proven track record of developing and operating major mining projects … is an excellent partner for ioneer to jointly realise the promise of Rhyolite Ridge,” Mr Calaway said.

“With a strong strategic partner in place, we can now look to finalise the debt financing for the project and move towards construction.”

Meanwhile, Sibanye-Stillwater CEO Neal Froneman said this was the second lithium deal for the South African company and its third transaction in the battery metals sector.

“We are excited to build a long-term relationship with ioneer, who share our vision of facilitating security of lithium supply to the North American markets,” Mr Froneman said.

He said Rhyolidge Ridge was a “world-class” asset with the potential to become the biggest lithium mine in the US.

While ioneer will continue to operate Rhyolite Ridge and will be responsible for developing the project, it will also form a technical committee and a marketing committee with its new JV partner to oversee the operation of the project and the commercialisation of its products.

Nevertheless, despite ioneer’s confidence in its new JV and strategic partner, the dilution from the Sibanye placement at the discounted placement price has seen INR shares dip deeply into the red.

Shares in ioneer are down 11.5 per cent and trading at 65.5 cents at 10:53 am AEST.

INR by the numbers
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