Sibanye-Stillwater investing $490 million for 50% stake of ioneer’s Rhyolite Ridge lithium-boron project

ioneer Ltd has announce that it has reached an agreement to establish a joint venture with Sibanye-Stillwater Ltd to develop the flagship Rhyolite Ridge lithium-boron open pit mining project located in Nevada, US. Under the terms of the agreement, Sibanye-Stillwater will contribute $490 million for a 50% interest in the Joint Venture, with ioneer to maintain a 50% interest and retain operatorship.

ioneer has also agreed to provide Sibanye-Stillwater with an option to participate in 50% of the North Basin, upon the election of Sibanye-Stillwater to contribute up to an additional $50 million, subject to certain terms and conditions. In addition, the company has entered into a subscription agreement with Sibanye-Stillwater for a strategic placement of $70 million of ioneer ordinary shares.

The operations are scheduled to start in 2023 with a fleet of Cat® 785 Next Generation mining trucks equipped with Cat® Command for hauling, and the fleet is scheduled to expand significantly in year four. All support equipment will feature the latest MineStar technology utilising high-precision GPS and real-time analytics to maximise efficiency and accuracy in material loading. This will be the first greenfield operation in North America to utilise AHS and will mark the expansion of Command for hauling automation technology to the 140 t class Cat 785. The partnership will operate through Cashman Equipment, Nevada’s Caterpillar dealership since 1931.

The statement said the “transformational strategic investment underpinsthe quality of Rhyolite Ridge and ioneer’s future as a major lithium and boron producer in the US.” Sibanye-Stillwater is a $10 billion global mining company, with a proven track record in large-scale mining projects, and has committed to become an important player in the battery materials supply chain

The move will see the formation of a joint venture operating committee comprised of ioneer and Sibanye-Stillwater representatives will leverage the deep skillsets of both partners to help deliver the project. Sibanye-Stillwater and ioneer will work collaboratively to secure debt financing for the Project on acceptable terms to ensure the Project is appropriately fully financed to production.

Proceeds from the Sibanye-Stillwater Placement will be used towards ioneer’s development capital requirement, medium term working capital needs and to progress long-lead items to minimise time to production James Calaway, Executive Chairman of ioneer commented: “We are extremely pleased to welcome Sibanye-Stillwater, a leading international mining company, as a strategic partner in the Rhyolite Ridge Project. Sibanye-Stillwater, with its proven track record of developing and operating major mining projects including operations in the United States, its commitment to developing and maintaining an inclusive and sustainable culture, and its determination to become a major force in the battery materials supply chain, is an excellent partner for ioneer to jointly realize the promise of Rhyolite Ridge. With a strong strategic partner in place, we can now look to finalise the debt financing for the Project and move towards construction. We are confident in the alignment of our companies. Our partnership with Sibanye-Stillwater will allow ioneer to unlock the tremendous, long- term value of Rhyolite Ridge.”

Neal Froneman, CEO of Sibanye-Stillwater commented: “This is Sibanye-Stillwater’s second lithium transaction and third transaction in the battery metals sector, which will be essential for the transition to a cleaner future. 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. Rhyolite Ridge is a world-class lithium project and we recognise its strategic value, with the potential to become the largest lithium mine in the US. We look forward to working collaboratively with the ioneer team and leveraging our complementary skills and capabilities to ensure this strategically important, world-class project is delivered, and materially contributes to reducing climate change”

ioneer will contribute the Project for a 50% interest in the newly created joint venture limited liability company and Sibanye-Stillwater will provide $490 million in direct funding to the project for 50% of the ordinary units in JVCo. ioneer will be the operator of the project, will enter into a management services agreement with JVCo and will be responsible for the development and subsequent operation of the project.

The companies will establish a Technical Committee which will meet regularly to oversee the operations of the project and an ESG Committee which will collaborate on key initiatives given the importance of ESG to both parties. In addition, the companies have agreed to establish a marketing committee to leverage each company’s existing relationships to maximise the value of JVCo’s products.

Establishment of the Joint Venture and Sibanye-Stillwater’s funding commitment is subject to certain terms and conditions precedent, including receipt of final permits, commitments for remaining debt financing, and other customary approvals. ioneer anticipates these conditions precedent to be satisfied during the during second half of calendar year 2022. The JVCo transaction is not subject to shareholder approval and is not conditional on ioneer shareholders approving the placement of shares to Sibanye-Stillwater under the Sibanye-Stillwater Placement.