Surprising Lithium Find in Brazil's Eastern Pegmatite Province Redefines Resource Potential
Source: Streetwise Reports 01/17/2025
Lithium Ionic Corp. (LTH:TSX.V; LTHCF:OTCQX; H3N:FSE) reports a 32% increase in lithium resources at its Baixa Grande project, reinforcing its strategic importance in Brazil’s Eastern Pegmatite Province. Explore what this means for the company’s growth and the region’s potential.
Lithium Ionic Corp. (LTH:TSX.V; LTHCF:OTCQX; H3N:FSE) announced a substantial update to its NI 43-101 Mineral Resource Estimate (MRE) for the Baixa Grande Project, located in Minas Gerais, Brazil. The updated estimate reflects a 32% increase in resources for the Baixa Grande project, underpinned by 35,734 meters of diamond drilling across 167 holes. As one of three NI 43-101 deposits in Lithium Ionic’s portfolio, this update contributes to the company’s global mineral resources of 64.7 million tonnes (Mt), further positioning Baixa Grande as a critical asset with 6.52 million tonnes (Mt) in the Measured and Indicated categories and 12.90Mt in the Inferred category, totaling approximately 460,000 tonnes of lithium carbonate equivalent (LCE).
The Baixa Grande deposit, part of the Salinas group of properties, lies within Brazil’s Eastern Pegmatite Province, a region renowned for spodumene-bearing pegmatites. Notably, the project’s resources extend to both surface and underground, with mineralization remaining open at depth and along strike. According to Blake Hylands, P.Geo., CEO of Lithium Ionic, “This updated mineral resource estimate for Baixa Grande is a testament to the remarkable work of our exploration team in successfully delineating and expanding the deposit with targeted and efficient drilling.”
The announcement also follows regional consolidation trends, as seen in Pilbara Minerals’ 2024 acquisition of Latin Resources and their neighboring Colina deposit for US$369.4 million. This deal highlights the strategic importance of lithium assets in this area and underscores the quality of Lithium Ionic’s broader land package, which spans 17,000 hectares.
Industry Perspectives on Lithium Ionic
Battery Metals analyst Frederic Tremblay, CFA from Desjardins Capital Markets report, maintained a “Buy” rating for Lithium Ionic Corp. in his January 14 update, with a target price of CA$3.75, citing the strategic importance of the Baixa Grande project’s updated mineral resource estimate (MRE) and reinforcing the project’s appeal as a standalone asset or a potential acquisition target.
Analyst Frederic Tremblay, CFA from Desjardins Capital Markets report, maintained a “Buy” rating for Lithium Ionic Corp., with a target price of CA$3.75.
The Desjardins report also emphasized the significance of permitting progress at the Bandeira project, where Lithium Ionic was nearing approval for its Licença Ambiental Concomitante (LAC) license, a key step toward construction. Desjardins viewed this milestone as a near-term catalyst supporting the company’s growth. The analysis highlighted Lithium Ionic’s strong resource expansion capabilities and strategic positioning within Brazil’s lithium sector, underscoring its value in the evolving market.
Canaccord Genuity maintained its “Speculative Buy” rating for Lithium Ionic Corp. in its January 14 report, with an unchanged target price of CA$2.50. The firm highlighted the 32% increase in the mineral resource estimate (MRE) for the Baixa Grande project, which now includes 6.52 million tonnes (Mt) at 1.11% Li₂O in the Measured and Indicated category and 12.90 Mt at 0.96% Li₂O in the Inferred category. This update, supported by 35,734 meters of drilling, positions Baixa Grande as a long-term production option or potential monetization target. Canaccord Genuity emphasized the project’s strategic location adjacent to the high-profile Latin Resources’ Colina deposit, recently acquired by Pilbara Minerals, which underscores the region’s competitiveness.
CG’s report also noted that Lithium Ionic is prioritizing the advancement of its Bandeira project, which holds 41.9 Mt at 1.35% Li₂O and is nearing final approval for its Licença Ambiental Concomitante (LAC) license. The company is progressing toward project financing, with a non-binding letter of interest for up to US$266 million in debt financing secured, covering 100% of capital costs. Canaccord Genuity views these developments, combined with the company’s CA$24 million cash position and ongoing offtake discussions, as key catalysts that support its valuation and growth potential in the lithium sector.
Canaccord Genuity maintained its “Speculative Buy” rating for Lithium Ionic Corp., with an unchanged target price of CA$2.50.
Stifel issued a “Speculative Buy” rating for Lithium Ionic Corp. on January 14, as well. Stifel emphasized the project’s strategic location adjacent to Latin Resources’ Colina deposit, which Pilbara Minerals acquired for $152/tonne LCE, significantly higher than Lithium Ionic’s current valuation of US$46/tonne. The potential for a combined development scenario between Baixa Grande and Colina was noted as a key driver for narrowing the valuation gap.
Stifel looked at Lithium Ionic’s dual-track strategy. The company was credited for advancing the Bandeira project toward production while leveraging exploration across its extensive 17,000-hectare land package in Brazil’s fertile Minas Gerais region. The report noted imminent permitting milestones for Bandeira and the company’s strong position to secure financing, including a non-binding letter of interest for $266 million in debt. These developments, combined with favorable infrastructure proximity and government support, position Lithium Ionic as a promising player in the rapidly growing lithium market. Stifel maintained a target price of CA$3.50 per share, citing resource growth and strategic positioning.
The Global Lithium Landscape: Trends and Insights
The lithium industry, a cornerstone of the global energy transition, continues to evolve amidst dynamic market conditions and technological advancements. At the GDMMC conference in late November, Lee Allen of Fastmarkets reported in a November 27 article on significant capacity expansions planned by lithium battery recyclers in Europe despite challenging market conditions. He noted that “the economic viability in running lithium-ion battery recycling operations has suffered this year, with prices for battery metals declining significantly.” However, Allen also pointed out that the supply of end-of-life batteries is expected to grow significantly, from 96,000 tonnes in 2024 to 252,000 tonnes by 2029, providing long-term growth opportunities for the sector.
On November 30, Alex Koyfman of Energy Capital reflected on the remarkable growth trajectory of lithium demand. Despite a challenging period marked by market corrections, he emphasized that “world lithium demand continued to grow at a fairly predictable rate across a wide spectrum of product classes.” Koyfman attributed previous volatility to speculative exuberance but noted that the market is poised for a recovery driven by enduring fundamentals. He cited lithium’s essential role in powering diverse technologies, underscoring its strategic importance for the future.
In his December 28 analysis for Energy and Capital, Alex Koyfman revisited the lithium sector’s trajectory, asserting that “the lithium market will certainly be back and will exceed previous highs in due course.” He compared lithium’s current market dynamics to historical recoveries seen in tech and housing, emphasizing the cyclical nature of growth industries. Koyfman concluded that lithium demand remains robust across multiple sectors, making it a vital resource for the energy transition.
Most recently, on January 14, USA News Group reported that analysts are forecasting 2025 to be a pivotal year for lithium, with the global market projected to reach approximately US$28.45 billion by 2033, supported by a CAGR of 12.50%. Benchmark analysts highlighted a narrowing surplus in lithium carbonate equivalent, dropping from 150,000 tonnes in 2024 to an estimated 80,000 tonnes in 2025. The report also underscored the need for substantial investments, with US$116 billion required by 2030 to meet growing EV production targets.
Unlocking Growth Potential at Baixa Grande
According to their investor presentation, Lithium Ionic is strategically advancing the Baixa Grande Project alongside its flagship Bandeira development project. The company is advancing multiple key initiatives that underscore its growth potential in the global lithium sector. The company is preparing to release the NI 43-101 technical report associated with the feasibility study (FS) for its flagship Bandeira Lithium Project. The FS, expected to be available on SEDAR+ and the company’s website within 45 calendar days of the May 29, 2024, press release, highlights the project’s technical and economic feasibility. It reflects input from industry-leading consultants, including AtkinsRéalis, GE21, Planminas, and L&M, who bring extensive expertise in mineral resource estimates, environmental studies, and financial modeling.
Upcoming milestones include the final approval of construction permits for the Bandeira project, anticipated by Q4 2024, with initial mine development slated to begin shortly thereafter. Commissioning and initial production at Bandeira are targeted for 2025, supported by comprehensive engineering and construction plans. [OWNERSHIP_CHART-11098]
Additionally, Lithium Ionic is leveraging its extensive land package in the highly prospective Minas Gerais region of Brazil, with ongoing exploration and resource expansion expected to bolster its strategic positioning. These developments, combined with the company’s robust permitting progress and supportive local government policies, solidify Lithium Ionic’s trajectory as a key player in the lithium industry.
Ownership and Share Structure
According to the company, management and insiders own 20% of the Lithium Ionic.
One of the insiders, President & Director Helio Diniz, owns 5.52%, Director Michael Lawrence Guy owns 5.10%, Director David Patrick Gower owns 2.56%, and Andre Rezende Gumaraes owns 2.52%, according to Reuters.
30% is held by institutional investors. Reuters reports Waratah Captial Advisors owns 7.01%, JGP Gestao de Recursos Ltda owns 2.69%, RBC Global Asset Management Inc owns 1.94%, Sprott Asset Management LP owns 1.55%, BMO Asset Management owns 1.30%, and IXIOS Asset Management SA owns 1.20%. The rest is retail.
Lithium Ionic has 158.58 million shares outstanding and 131.15 million free-float traded shares.
The company’s market cap is CAUS$135 million, and it trades in a 52-week range of CAUS$0.41 – 2.24 per share.
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Important Disclosures:
- Lithium Ionic Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
- James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
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( Companies Mentioned: LTH:TSX.V; LTHCF:OTCQX; H3N:FSE, )
Source: https://www.streetwisereports.com/article/2025/01/17/surprising-lithium-find-in-brazils-eastern-pegmatite-province-redefines-resource-potential.html
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