Ground Breakers: Ioneer leads ASX large caps with US lithium funding breakthrough
Ioneer (ASX:INR) has emerged as the leading light of the large and mid-cap ASX miners today after securing its funding pathway for the Rhyolite Ridge mine in Nevada.
Ioneer shares lifted upwards of 20% in early trade before calming to a 15.38% gain as the $950 million capped lithium developer announced it had been successful in receiving a commitment for a loan of up to US$700 million from the Biden Administration to fund the unique searlesite lithium and boron mine.
It comes alongside a US$490m equity commitment from one of the world’s largest miners, Sibanye-Stillwater, which plans to take a 50% interest in the mine, to be operated by ASX-listed Ioneer.
The loan commitment under the Department of Energy’s US$50b Advanced Technology Vehicles Manufacturing loan program, part of the Biden Administration’s critical minerals strategy, would back the construction of what INR claims is the most advanced undeveloped lithium project in the USA.
Backed by a regulatory framework including the well-publicised Inflation Reduction Act, providing incentives to manufacturers to source material outside the dominant Chinese EV and battery supply chain, the US Government has increasingly thrown its support behind initiatives to increase production of minerals key to the energy transition.
“Rhyolite Ridge is a major step towards bolstering domestic lithium production for clean energy technologies, and LPO is excited to further develop an environmentally responsible U.S. supply chain for critical materials,” DOE loans programs office director Jigar Shah said.
INR MD Bernard Rowe said the conditional commitment, which will carry a fixed interest rate from the date of each advance over its 10 year term, was made after 23 months of discussions and due diligence, calling it a “significant milestone.”
It came amid a weak day across the rest of the lithium space, with all the major players down.
However, the ASX materials sector was up 0.06%, with gold miners rallying after the price lifted beyond US$1920/oz — around US$150/oz below historic highs — supported by Chinese gold buying and a bullish outlook on future US Fed rate decisions.
“Gold prices are rising as Wall Street grows confident that the Fed is almost done with raising rates. The University of Michigan sentiment report showed one year inflation expectations fell to the lowest levels since April 2021,” OANDA senior analyst Ed Moya said.
“Non-interest bearing gold is loving the slide in bond yields and that could continue as earnings come in softer-than-expected.
“If gold can comfortably close above the $1900 level, that could be a very bullish signal for the rest of the month. Gold should have strong resistance at the $1950 region.”
Among the gold miners on the rise today were major players Northern Star (ASX:NST), Evolution (ASX:EVN), Newcrest (ASX:NCM) and Gold Road Resources (GOR), with smaller players Alkane (ASX:ALK), Red 5 (ASX:RED) and Catalyst Metals (ASX:CYL) up big.
Tietto Minerals (ASX:TIE) was down over 2% despite announcing the pouring of its first gold bar at the Abujar mine in Cote d’Ivoire, where it plans to deliver 260,000oz in its first year of production.
The 12.89kg bar, worth over $1.1 million at the current spot price, was poured around one year after $850m company, aiming to follow in the footsteps of fellow West African gold miners West African Resources (ASX:WAF) and Perseus Mining (ASX:PRU), started construction on the US$200m gold mine.
But the pour comes slightly behind the Q4, 2022, schedule initially set by Tietto for its first gold.
MD Caigen Wang said the miner is aiming to hit commercial production this quarter alongside a 120,000m calendar year exploration program and feasibility study on its APG heap leach project.
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