We have been following Lithium Ionic (TSX-V: LTH) (OTCQB: LTHCF) since April 2023, and since that time, the company has produced it’s maiden Mineral Resource Estimate on the Itinga Project, significantly expanded its land package in Minas Gerais, Brazil and raised $28.75 Million!
Located in the southeast of Brazil in the mining friendly state of Minas Gerais, LTH holds a staggering 14,182 hectares, and is situated within The Eastern Brazilian Pegmatite Province (EBPP), which is one of the largest geological belts of granitic pegmatites with high quality lithium-bearing petalite and spodumene in the world.
In our first article, we covered the fundamentals of Lithium Ionic and how they are developing “Clean Lithium in Brazil”. In that article, we dug into the exploration work LTH was doing on the two of the properties within its Itinga Project comprising the Bandeira and Galvani deposits. The stated corporate goal was delivering an initial mineral resource estimate in Q2 2023 for Itinga.
In a subsequent article published by The Resource Report called “Powering the Future and the Rise of MLithium Mining in Brazil” we looked at some of the lithium market fundamentals that are driving forces and how following the success of the Australian model, Brazil is seeking to be a major player in the global lithium industry with the launch of the Lithium Valley Brazil Initiative, precisely the region where LTH is located. In that same article we dug further into the Itinga Project as well as the newly acquired Salinas Project.
Since those articles were published in the Spring of 2023, the management team at LTH has been busy executing on exactly what they communicated to shareholders while also solidifying the company's balance sheet by bolstering their cash position.
Right on schedule, on June 27, LTH published its National Instrument 43-101 compliant mineral resource estimate (“MRE”) on its Itinga Lithium Project in Minas Gerais, Brazil, of 7.57 million tonnes (“Mt”) grading 1.40% lithium oxide (“Li2O”) of Measured and Indicated resources (“M&I”) and 11.86Mt grading 1.44% Li2O of Inferred resources.
Some highlights from the MRE included M&I Resource estimate of 7.57Mt grading 1.40% Li2O and Inferred of 11.86Mt grading 1.44% Li2O. The MRE incorporates the Bandeira and Outro Lado (Galvani) deposits, using a cut-off grade of 0.5% Li2O for Bandeira Open Pit and 0.8% Li2O for Outro Lado and Bandeira Underground. Approximately 39% of the MRE is classified in the M&I categories
Blake Hylands, P.Geo., Chief Executive Officer of Lithium Ionic was quoted: “This initial mineral resource estimate marks the most important milestone to date for our Company, highlighting large scale and high-grade lithium deposits with significant future growth potential. I commend our excellent team in Brazil for the speed at which these pegmatites have been delineated; the past year has been an impressive demonstration of how quickly these deposits can be defined and expanded”.
LTH has experienced rapid growth in a short timeframe with the MRE being based on 181 holes totaling 28,204 meters. As noted in this press release, there remains significant expansion potential. based on drill holes that occurred outside of the MRE area. The technical advisors on the project identified potential for significant additional lithium-bearing mineralization at Bandeira once tighter drilling is completed in these areas, estimated to be in the range of 1.5 - 3.0Mt at grades of 1.3 - 1.6% Li2O.
For the remainder of 2023, there will be 13 drill rigs running to complete 50,000 meters of work with the goal of increasing the size of the MRE and establish an NI 43-101 mineral reserve estimate at Bandeira and Outro Lado, while defining new lithium deposits at its other prospective regional targets, including the Salinas and Itira.
Following in the footsteps of its successful neighbor Sigma Lithium (TSXV:SGML) (NSDQ:SGML), LTH will be on the fast track to production with an accelerated timeline for project engineering with the objective of delivering a PEA in the coming month and a Definitive Feasibility Study (DFS), which is targeted for completion by the end of 2023. Additionally, LTH also has the permitting process underway with Environmental Impact Assessment (“EIA”) studies for both deposits underway and expected to be complete within H2 2023.
Hot on the heels of the publication of the Resource Estimate, on July 29 Lithium Ionic signed a non-binding Memorandum of Understanding (”MOU”) with Invest Minas (State Economic Department of Minas Gerais and the Minas Gerais Integrated Development Institute), mutually supporting the development of the battery materials sector in the region. Lithium Ionic’s Itinga and Salinas lithium projects were granted priority status by the state of Minas Gerais regional government bodies, facilitating support and acceleration of approvals and licensing through the development process.
The MOU also calls for Invest Minas to support and prioritize Lithium Ionic through the exploration to operational stages, including environmental licensing and other required regulatory approvals to advance the Itinga Lithium Project.
In eturn, Lithium Ionic (TSX-V: LTH) (OTCQB: LTHCF) has committed to supporting regional employment by using local suppliers and talent wherever possible throughout the exploration, construction, development and operational phases of the projects.
Investor sentiment towards LTH was decidedly positive in the period following the MRE, as shares rallied 28% from a June 27 low of $2.11 to a high of $2.70 on August 2, 2023.
Again, LTH management showed masterful business execution and completed a financing totaling $28,750,334 on July 31. Blake Hylands, P.Geo., Chief Executive Officer of Lithium Ionic, commented “We are very encouraged by the strong investor demand from this financing and we are pleased to welcome a new group of prominent global institutional funds and large retail investors to our share registry. We look forward to building on the momentum we’ve experienced so far as we quickly advance and grow the Itinga Lithium Project, and our other prospective properties in Brazil’s Lithium Valley.”
The team at Lithium Ionic has proven that it can establish and execute a work program while building shareholder value and trust. Although the expectations for the balance of 2023 are aggressive, there is every reason to think that LTH will continue to deliver on their word. The parallels to SGML are always brought up and, in our opinion, are warranted. We think that LTH is in a unique position to capitalize on the opportunity in the lithium industry in the coming years.