(Kitco News) - On Friday, Ioneer (Nasdaq: IONR) announced finalization of a term sheet and offer of a conditional commitment for a proposed loan of up to US$700 million from the U.S. Department of Energy (DOE) Loan Programs Office for financing the construction of the Rhyolite Ridge lithium-boron project in Nevada, USA.
The company said that the proposed loan is to be made under the DOE Loan Programs Office's Advanced Technology Vehicles Manufacturing program for a term of approximately 10 years with an interest rate fixed from the date of each advance for the term of the loan at applicable U.S. Treasury rates.
The proposed DOE loan coupled with Sibanye-Stillwater's expected equity contribution to secure a 50% interest in the project, is anticipated to fund a substantial part of the preliminary capital expenditure estimate, representing a significant step towards a complete funding package for Rhyolite Ridge.
Financial close of the loan is conditional on several achievements including a positive record of decision and final investment decision, the company added.
"The term sheet and conditional commitment from DOE demonstrates its strong support for the Rhyolite Ridge project and, if finalised, the loan would be the first-ever by the DOE to provide financing for the processing component of a project where lithium is extracted and refined at site," the company said in a statement.
Ioneer pointed out that Rhyolite Ridge is the most advanced undeveloped U.S. lithium project, and it is on track to provide an environmentally sustainable, long-life source of both lithium and boron for delivery into the U.S. domestic EV supply chain.
Ioneer is the 100% owner of the Rhyolite Ridge lithium-boron project located in Nevada, USA, the only known lithium-boron deposit in North America and one of only two known such deposits in the world. The definitive feasibility study completed in 2020 confirmed Rhyolite Ridge as a world-class lithium and boron project that is expected to become a globally significant, long-life, low-cost source of lithium and boron vital to a sustainable future.
In September 2021, Ioneer entered into an agreement with Sibanye-Stillwater to advance the Rhyolite Ridge project. Following the satisfaction of all conditions precedent of the agreement, Sibanye-Stillwater will acquire a 50% interest in a joint venture, with Ioneer maintaining a 50% interest and retaining the operational management responsibility for the joint venture.
Ioneer signed separate offtake agreements with Ford Motor Company and PPES (joint venture between Toyota and Panasonic) in 2022 and Korea's EcoPro Innovation in 2021.
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