Lithium Ionic Corp. (TSXV: LTH; OTCQX: LTHCF; FSE: H3N) (“Lithium Ionic” or the “Company”), is pleased to announce that it has executed a binding term sheet (the “Term Sheet”) with Appian Capital Advisory LLP (“Appian”) to sell a 2.25% gross revenue royalty on its Bandeira Deposit in exchange for an upfront cash consideration of US$20,000,000 (the “Royalty”). Appian is an investment advisor to long-term, value-focused private capital funds that invest solely in mining and mining-related companies.

Lithium Ionic intends to use the proceeds of the Royalty to further advance the development and construction of its world-class Bandeira Lithium Project (“Bandeira” or the “Project”), located within the Lithium Valley in Minas Gerais State, Brazil. The Lithium Valley is a unique geological belt that hosts a significant concentration of lithium-bearing pegmatites and has emerged as a globally significant lithium production center. On May 29, 2024, the Company announced Feasibility Study results for Bandeira supporting a 14-year, low-cost mining operation producing 178,000tpa of high-quality spodumene concentrate (5.5% Li2O), resulting in a post-tax NPV8 of US$1.3B and an IRR of 40%.

Terms of the Royalty Term Sheet

The closing and funding of the Royalty are subject to the execution of a definitive agreement (the “Definitive Agreement”) between the Company and Appian. Certain key terms that have been agreed upon include:

  • A 2.25% Life of Mine gross revenue royalty on the Bandeira Project.
  • A purchase price of US$20,000,000 payable to the Company upon closing.
  • An option for the Company to fully buy-back the Royalty within the first five years for a fee of US$67,500,000.
  • Funding is subject to customary conditions precedent, including the finalization and execution of documentation and the provision of legal opinions.

BMO Capital Markets is acting as financial advisor to Lithium Ionic. Bennett Jones LLP is acting as Lithium Ionic’s legal advisor.

Source: Company Press Release