Australia-based Ioneer Ltd. (ASX: INR) has unveiled a sweeping new plan for its Rhyolite Ridge lithium-boron project in Nevada, expanding reserves and extending the mine’s life to a staggering 95 years.
While the upside is big, so is the budget.
The updated reserve now totals 1.92 million tonnes of lithium carbonate equivalent (LCE) and 7.68 million tonnes of boric acid equivalent (BAE). This solidifies Rhyolite Ridge as the world’s largest known lithium-boron deposit, according to the company.
Key stats
Annual output is projected at 17,200 tonnes of LCE and 60,400 tonnes of boric acid – a chemical staple in everything from agriculture to fiberglass.
Ioneer has upgraded more than 45% of the mineral resource to reserve status, offering a major confidence boost for long-term production plans.
The capital expenditure has risen from $800 million to $1.67 billion. Likewise, the all-in sustaining cost (AISC) is now $7,500 per tonne of LCE, although the first 25 years are expected to average a more palatable $5,745 per tonne.
Despite the cost increase, ioneer says the project’s post-tax net present value (NPV) has grown from $1.26 billion to $1.5 billion, though the internal rate of return (IRR) has dropped to 14.5% from a previously expected 20.8%.
Built-in adaptability
What sets Rhyolite Ridge apart isn’t just its size, but also it’s the dual-revenue model. In the face of falling lithium prices, Ioneer plans to front-load production with high-boron ore, capitalizing on the relatively uncorrelated market for boric acid.
“No other lithium project offers this level of flexibility and economic advantage,” said Managing Director Bernard Rowe, who emphasized that boric acid could contribute around 25% of revenue over the mine’s first 25 years.
When lithium prices dip, like they have since their 2022 highs, that flexibility could be a lifeline.
A strategic pivot after Sibanye exit
The update follows February’s high-profile departure of joint venture partner Sibanye-Stillwater (JSE: SSW)(NYSE: SBSW), a move partly driven by the tough pricing environment.
Since then, Ioneer has doubled down on its standalone strategy while also pursuing new investors. Rowe says the company is looking to sell up to 40% of the project to one or two strategic partners.
Still, investors seemed to like what they heard. Shares rose over 4% on the news, closing at A$0.13 and giving the company a market cap of A$295 million (~$190 million).
If the lithium market rebounds, or if boric acid demand stays strong, Rhyolite Ridge could become a textbook case of patient capital rewarded.
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