Lithium Ionic (TSXV: LTH, OTC: LTHCF, FRA: H3N) is an exploration company focused on a world-class lithium district and has lithium-producing neighbor companies such as CBL mine. The company is aggressively exploring the land, putting 90% of its expenses into the ground. Lithium Ionic also recently acquired a strategic claim in Minas Gerais state, Brazil covering 1,000 hectares.

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Sector Overview

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The popularity of electric vehicles and the rising demand for lithium are related. Lithium-ion batteries, which are created from a substance known as lithium hexaferrum oxide, are needed in large quantities for electric vehicles. The production of electric vehicles has increased the demand for lithium by 3000% since 2010. The demand for lithium is rising due to several factors, including the development of more powerful and affordable batteries that can store more energy, regulations that encourage the growth of green technology and rising climate change awareness. After years of research and development, South America is prepared to play a significant role in the global lithium supply. The area is well-equipped to meet the demand for lithium batteries, and its residents are accustomed to using battery-related technologies. This might help close the supply-demand gap, essential for ensuring a sufficient lithium supply for technological applications.

Mineral lithium is necessary for batteries and other electronic types of equipment. In the global lithium market, it is hard to find and expensive to extract. The countries of Brazil, Argentina, Chile, and Mexico are working to close the lithium supply-demand gap. Brazil is the sixth-largest lithium producer in the world, but due to its remote location, it has a tiny supply chain. The nation's government collaborates with businesses like Samsung and Renault to create new methods for extracting lithium from minerals.

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Company Overview

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Lithium Ionic (TSXV: LTH, OTC: LTHCF, FRA: H3N) is an exploration company holding assets in Brazil’s most friendly mining jurisdiction with a highly efficient permitting process. Everything started in Q4 2021 when the company acquired 1,300 hectares of land. A year later, Lithium Ionic focused on expanding the team and being traded on the TSXV. 

Lithium Ionic’s flagship Itinga project is located in a well-known pegmatitic province where for decades, many pegmatite occurrences have been mined for high-value heavy metal oxide minerals (cassiterite and coltan), lithium silicates (spodumene, petalite, and lepidolite), and semi-precious gemstones. There, the company has two main targets: Bandeira and Galvani. 

The company is assessing a 30,000m drilling program. To date, the company has completed over 11,000m through 92 drill holes. 5,800m have been drilled at Bandeira (51 holes), while approximately 5,600m have been drilled at Galvani (44 drill holes). 

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 The company aggressively continues to grow, marked by ongoing surface sampling & trenching with near-term results and ongoing mapping, prospecting & geophysical surveys hinting at identifying discoveries. The company also expects to receive its maiden mineral resource estimate in early 2023, while 8 drill turnings provide continuous results. In the meantime, an Environmental Impact Assessment baseline study is underway.

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Most Recent News

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On January 24, 2023, the company shared promising news with high-grade drill results at its 100%-owned Bandeira property. Among them, we can highlight the following:

-1.59% Li₂O over 9.62m, incl. 2.39 Li₂O over 5m (hole ITDD-22-039)

-1.27% Li₂O over 10.09m, incl. 2.13% Li₂O over 5.06m (hole ITDD-22-023)

-1.61% Li₂O over 4.72m and 2.43% Li₂O over 1.40m (hole ITDD-22-038)

 “Results from Bandeira continue to impress us, with the latest intercepts returning some of the strongest grades and thicknesses encountered to date at this target. We have now identified an over 1km mineralized trend with at least six different spodumene-bearing pegmatite bodies, which remain open in all directions. We continue to aggressively drill Bandeira as we work towards delivering our maiden mineral resource estimate in the coming months.”

Blake Hylands, Chief Executive Officer of Lithium Ionic

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Share Structure / Financials

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The company is well-funded while having strong fundamentals. With the recent private placement,  the company had $30M in cash for no debt. On October 5, Lithium Ionice announced a $25M private placement offering led by Clarus Securities at a price of $1.60 per share, entitled to a warrant with an exercise price equaling the offering price. 15.6M shares were issued for the offering. The net proceeds will be used for exploration and

development work on the company’s mineral properties and for general working capital purposes. Talking about exploration, Lithium Ionic aggressively explores its land, with $6.2M spent on exploration and evaluation, totalling 90% of the company’s expenses. 

Regarding the share structure, Lithium Ionic has 116.8M shares issued and outstanding, added to 11.5M options and 4.7M warrants. The company also can count on a solid institutional basis (27%) and strong ownership by the management and insiders (23%). 

The stock price is about to hit its 52-week high of $3.00 and trades at $2.95 (February 21, 2023). Nevertheless, the stock price is far from its 52-week low of $0.70.

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Bottom Line

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Lithium Ionic (TSXV: LTH, OTC: LTHCF, FRA: H3N) attracts investors thanks to several factors. The company is well-funded, with $30M in cash and no debt. It has a solid share structure thanks to high institutional, management, and insiders ownership. Its flagship property is nearby a producing mine. The future is bright for the company, and its stock price should continue to move higher. 

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