Source: Lithium Ionic Corp.

Lithium Ionic Corp. has been hailed as the multi-billion-dollar blueprint next door by analysts.

Lithium Ionic (TSXV:LTH) (OTCQB: LTHCF) (FRA: H3N) is a Canadian mineral exploration company focused on lithium, a battery metal that is critical to powering the global electric revolution. Its 100 per cent-owned Itinga lithium project covers approximately 36 sq. km in Vale do Jequitinhonha. This region hosts 100 per cent of Brazil’s official lithium reserves in the pro-mining state of Minas Gerais.

The Company is aggressively drilling their two main targets, Bandeira and Galvani, as it works towards delivering a maiden resource estimate in the coming months. These properties are located next to the Grota do Cirilo Mine under Sigma Lithium Corp. (TSX-V: SGML; NASDAQ:SGML), the largest lithium hard rock deposit in the Americas, as well as CBL’s Cachoeira mine, which has been producing lithium for 30 years.

Lithium Ionic started trading on the TSX Venture in May 2022, and has since drilled 11,000 metres and defined at least six different spodumene-bearing pegmatite bodies over a 1km mineralized trend. The Company has consistently announced excellent lithium grades and widths, with result highlights including: 1.99 per cent Li2O over 6.75m, 1.59 per cent Li2O over 9.62m and 1.27 per cent Li2O over 10.09m Based on the momentum of the Company so far, this project boasts potential to rapidly turn into an emerging developer in the region, with a maiden NI 43-101 mineral resource estimate expected in the coming months.

Could continued exploration success transform Lithium Ionic into a multi-billion dollar company, such as its immediate neighbour, Sigma Lithium Corp?

May 2022: Corporate launch

Since Lithium Ionic started trading on the TSX:V, the company has focused its primary efforts on exploration and discovery. It aimed to delineate lithium mineralization on its properties. Some of these properties are close to Companhia Brasileira de Litio (CBL) Cachoeira mine, which has produced lithium since 1993, and the soon-to-be-producing Grota do Cirilo under construction by Sigma Lithium Corp., which has delineated the largest hard rock lithium deposits in the Americas.

Major Upcoming Milestone: Maiden NI 43-101 Mineral Resource Estimate

Initial exploration activities included mapping and geochemical geophysical surveys. These soil anomalies led to the discovery and confirmation of lithium-bearing pegmatites by drilling and trenching. Over the year, the company collected 1,700 soil and rock samples and did 1,200 metres of trenching.

In April 2022, the company began drilling selected targets. By the end of the year, it had completed more than 11,000 metres of drilling, with a further 20,000 metres planned. 

Highlights from main targets, Galvani and Bandeira:

  • 1.98 per cent Li2O over 25.63 metres
  • 1.94 per cent Li2O over 19.78 metres
  • 1.71 per cent Li2O over 21.91 metres
  • 1.99 per cent Li2O over 6.75 metres
  • 1.59 per cent Li2O over 9.62 metres
  • 1.27 per cent Li₂O over 10.09 metres
  • 1.53 per cent Li2O over 5.7 metres
Lithium Ionic Claims on Geology Map. Source: Lithium Ionic Corp.

The company reported promising results from metallurgical testing on two-20 kg head-grade samples from its main targets, Galvani and Bandeira. Bandeira had a 77.99 per cent lithium recovery and  82.52 per cent at Galvani, which produced a high-quality lithium concentrate of 6 per cent, with a low iron content of 0.24 per cent and 0.51 per cent, respectively.

This demonstrated to the team that these main mineralized bodies could produce high-quality spodumene concentrations. The company continues metallurgical testing in preparation for future economic studies, including a pilot-plant circuit.

Cumulative Li2O recovery, mass yield, and Li2O grade for the four specific densities tested for the Bandeira composite sample. Source: Lithium Ionic Corp.

Lithium Ionic’s land holdings increased nearly threefold over the course of 2022 from 130 sq. km. to 360 sq. km. with the acquisitions of the Galvani claims in September and Borges claims in December. These claims and other 100 per cent-owned properties are located within the Aracuai Pegmatite District. This is an underexplored region that hosts the entirety of Brazil’s lithium reserves. The company believes these claims have high potential to yield new discoveries through further exploration.

Speaking on this acquisition in a news release, Blake Hylands, CEO of Lithium Ionic, commented,

“The Borges claims will significantly add to our land holdings in this highly sought-after lithium district… exploration on these prospective properties in the coming months.”

Lithium Ionic claims and Borges claims to be acquired. Source: Lithium Ionic Corp.

Financial strength and corporate development:

Lithium Ionic launched on the TSX-V in May 2022 at C$0.70 per share and reached a peak price of C$2.02 in early December 2022. Its shares started trading on the OTCQB Venture Market in the United States in August 2022 under the stock symbol LTHCF. Its stock also began trading on several German exchanges under the symbol H3N in early 2023. This allows for greater exposure for the company to larger pools of investors. 

In October 2022, Lithium Ionic closed a C$25 million private placement financing. The Company entered 2023  in a robust financial position of roughly $30 million.

Leadership’s take:

In a media release highlighting the year’s achievements, CEO Blake Hylands reflects on the year and sees 2022 as an exciting year for the company.

“We have an outstanding team that has been able to hit the ground running since the formation of Lithium Ionic. We are very proud of the progress made in exploration. This is evident by our consistent high-grade drill results, which have identified several low-grade and high-grade lithium-bearing pegmatites. With approximately $30 million in our treasury, we enter 2023 with a strong financial position that will allow us to expand our mineralized targets aggressively. We are also advancing technical studies and engineering work and laying the foundations for the permitting process through ESIA baseline studies. As we build on the momentum of last year and unlock the potential value of our Itinga project, we look forward to continuing that momentum.”

A professional geoscientist with more than a decade of experience in advanced and early-stage exploration, CEO Blake Hylands was co-founder of Troilus Gold Corp., where he led the technical team to discover more than 8 million equivalent ounces of gold. He has served on numerous boards of junior mining companies. He also has extensive experience in community outreach and capital markets. He has held executive positions in corporate development and communications with First Nations.

He is joined by President and Director Helio Diniz, a 40-year veteran in exploration and mining. He has been the Managing Director at Brazil Potash Corp. since July 2009. His career began with GENCOR South Africa, where he was responsible for the development and evaluation of the Sao Bento Gold Mine in Brazil. After that, he was appointed Managing Director of Brazil at Xstrata (now Glencore) and discovered the Araguaia Nickel deposit (more than 100 million tonnes at 1.5 per cent Nickel). As an entrepreneur, he set up Falcon Metais and HDX Consultoria to explore, develop and identify mining opportunities in Brazil. 

2023 outlook:

Looking ahead to the rest of this year, the company’s goal is to further demonstrate Itinga’s potential. A maiden NI 43-101 compliant mineral resource estimation is on deck in early 2023 and will be a significant milestone that will provide a foundation for future development.

Exploration activities will continue throughout the year to build on existing targets and discover new ones. The company is currently conducting baseline studies to include in the project’s Environmental and Social Impact Assessment. It also continues to look at potential strategic acquisitions.

Investment corner:

Pro-mining jurisdiction, established infrastructure, experienced team, C$30M on hand and expanding high-grade lithium zones – these factors make Lithium Ionic an attractive investment. This project has the potential to support a multi-billion-dollar NPV with similarities to the neighbouring Grota do Cirilo lithium project – considering Lithium Ionic’s current market capitalization of C$160 million, this could represent sizeable returns to early investors.

Emerging in a globally significant lithium district, Lithium Ionic holds claims in a district that has the potential to be one of the most important lithium-producing regions in the world. Lithium has been produced here for 30 years, and other lithium mines are coming online this year.

The Company has the funds to finish the program this year thanks to financing and affordable shallow drilling. In the coming months, a maiden resource of 10-20 Mt is expected, which should be enough to support a mine.

Even small resources can be profitable, and with low operating costs and tailwinds from high lithium prices, producers don’t need large resources, meaning opportunities such as this are perfect for investors needing that key incentive to advance deeper due diligence into what Lithium Ionic has to offer.


FULL DISCLOSURE:  This is a paid article produced by the Market Herald.

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