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Stonegate Capital Partners Updates Coverage On Ion Energy Ltd. (TSXV:ION)

Monday, May 16, 2022 2:20 PM

DALLAS, TX / ACCESSWIRE / May 16, 2022 / Ion Energy Ltd. (TSXV:ION): The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/ION.TO Q421.pdf

COMPANY DESCRIPTION

ION Energy Ltd. explores and develops lithium assets in Asia. The company holds 100% interest in the Baavhai Uul Lithium Brine Project and the Urgakh Naran Lithium Brine Project, covering a combined area of over 100,000 hectares (247,000 acres) located in Mongolia. The company has the distinction of having the first lithium brine license ever granted in Mongolia. Furthermore it possesses one of the largest exploration licenses in Mongolia. The company was formed via a reverse merger in August 2020, and is headquartered in Toronto, Canada and strengthened its North American presence by trading on the OTCQB.

SUMMARY

  • One of the largest exploration licenses in Mongolia - ION has the distinction of having been issued the first lithium brine license ever granted in Mongolia. ION holds 100% interest in the Baavhai Uul Lithium Brine Project covering an area of ~81,758 hectares located in the southeastern region of Mongolia.
  • Baavhai Uul Project is promising - Early exploration drill holes all contained significant levels of lithium with an average grade of 426 ppm lithium with a maximum grade of 811 ppm lithium. The project also has a very promising geological profile with low potassium and magnesium ratios, shallow aquifers, is a brine source vs. rock, and is in the Gobi Desert with high evaporation rates. In December 2021, ION announced a new lithium discovery at the White Wolf prospect that returned results up to 1,502ppm lithium.
  • Urgakh Naran project adds potential growth - The company acquired this project in February 2021.The acquisition represents management's execution of its growth goals by obtaining highly prospective terrains for discovery of lithium salars across Mongolia. The project is located 150km west, northwest of the Baavhai Uul project. In early May 2022, the Company announced that it had made a significant lithium brine discovery. The brine sample was collected at surface from a shallow pool and assayed 918mg/L Lithium. The Company noted that this is the highest-grade lithium brine known to have been collected in Mongolia.
  • Project location strategically located providing advantages - The Baavhai Uul project is strategically located to China via a 30km road. Additionally, the location is close to Korea, Taiwan, and Japan. According to a 2020 Benchmark Mineral Intelligence report, China dominates lithium-ion battery mega-factories with 89 of 123 of the worlds mega-factories in the pipeline, located in China. Assuming the company's property proves itself as economically viable, the project location will provide a significant cost advantage as shipping costs should be lower given the proximity to China and other Asian countries.
  • Management team with a track record - ION Energy's management team has successfully operated in Mongolia for over a decade. Collectively, the team has over 100 years of combined experience in mining and exploration activities. The team has also successfully delivered results to investors via three transactions that include the A$20M IPO of Hunnu Coal in 2010; the C$25M IPO of Steppe Gold in 2018; and the sale of Hunnu Coal at A$500M to Banpu Minerals in 2011.
  • Long-term demand for lithium - Global demand for lithium is expected to increase driven by clean energy. While various applications should help drive demand for lithium, the market for EVs is forecast to be the largest driver. With 2018 EV volumes in China at about 1.1M units, vs. Europe and the US at 0.32M and 0.36M, respectively, China's EV market is about 3x the size.
  • Valuation - Given the exploration stage of ION Energy, we are using an EV/Hectare analysis for valuation. Comparable companies and the implied valuations offer a wide range from C$286 EV/Hectare to C$20,810 EV/ Hectare with a median of C$3,715. This compares to ION Energy at C$174 EV/Hectare.

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.

CONTACT:

Stonegate Capital Partners
[email protected]
(214) 987-4121

SOURCE: Stonegate Capital Partners

Topic:
Company Update
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