The Ioneer Ltd (ASX: INR) share price has sunk this morning. In early trade, shares in the emerging lithium-boron company are 16.89% lower, trading at 61.5 cents.
This move follows Ioneer's announcement on Thursday it was entering into a strategic partnership with a multibillion-dollar multinational mining company.
Teamwork to make the dream work
The Ioneer share price is plummeting this morning after its latest release to the ASX.
According to the announcement, the future-focused mining company has formed a joint venture (JV) with the world's largest primary producer of platinum, Sibanye Stillwater.
Under the newly formed JV, Ioneer and Sibanye Stillwater will hold a 50/50 ownership. As part of the deal, Sibanye will contribute US$490 million in direct funding for its 50% share, while Ioneer will contribute 100% of its South Basin Rhyolite Ridge Lithium-Boron Project.
Additionally, Ioneer's North Basin of Rhyolite Ridge will be contributed to the JV if Sibanye Stillwater exercises its option by providing a further US$50 million.
About the new partner…
A little background on Sibanye, the A$13 billion mining company operates across South Africa, the United States, Zimbabwe, Canada, and Argentina. In the trailing 12-month period, Sibanye recorded more than A$15 billion in revenue and approximately A$4.23 billion in profits. Partnering with such a large mining company could buoy the Ioneer share price.
Interestingly, today's presentation specifies that this outcome is the product of an 18-month long process.
The South African mining company was deemed the appropriate partner due to its extensive experience in developing large projects. Furthermore, Sibanye Stillwater also has deep relationships with automakers and automotive OEMs, with a strong focus on battery metals.
In addition to the direct funding, Sibanye Stillwater will also subscribe for 145.9 million fully paid ordinary shares in Ioneer. This will be conducted through a placement, subject to shareholder approval, at 65.5 cents per share.
The proceeds of US$70 million will be used to cover the costs of advancing the project to the construction stage.
Management commentary
Commenting on the strategic partnership, Ioneer executive chair James Calaway said:
We are extremely pleased to welcome Sibanye-Stillwater, a leading international mining company, as a strategic partner in the Rhyolite Ridge Project.
With a strong strategic partner in place, we can now look to finalise the debt financing for the project and move towards construction. We are confident in the alignment of our companies. Our partnership with Sibanye-Stillwater will allow ioneer to unlock the tremendous, long-term value of Rhyolite Ridge.
What's next for the Ioneer share price?
According to the timeline presented, shareholders will be given the chance to vote on the US$70 million placement to Sibanye Stillwater by 20 September. Subsequently, a meeting will be held on 21 October 2021 to approve the placement. If all goes to plan, the company expects the placement to be completed in the December 2021 quarter.
Finally, if all approvals are received, Ioneer will target the construction of Rhyolite Ridge in the second half of 2022.
The Ioneer share price has climbed a staggering 572% in the past year.
