ioneer Ltd. announced finalization of a term sheet and offer of a Conditional Commitment for a proposed loan of up to USD 700 million from the U.S. Department of Energy (DOE) Loan Programs Office for financing the construction of the Rhyolite Ridge Lithium-Boron Project in Nevada, USA. Under the term sheet, the proposed loan is for an amount up to USD 700 million with a term of approximately 10 years. The loan will be at an interest rate fixed from the date of each advance for the term of the loan at applicable U.S. Treasury rates.

The proposed loan is to be made under the DOE's Advanced Technology Vehicles Manufacturing (ATVM) loan program in support of the Biden Administration's critical minerals strategy. DOE has over USD 50.0 billion in remaining loan authority under the ATVM program to support the manufacture of eligible advanced technology vehicles including electric vehicles (EVs), and qualifying components and materials, in the United States. Domestic processing of critical minerals, such as lithium, for use in EV batteries qualifies for the ATVM loan program.

After commencing pre-application discussions in February 2021 regarding the DOE's ATVM loan program, Ioneer submitted an application in October 2021. The application was deemed substantially complete in December 2021 which initiated a third-party due diligence process that has been ongoing since March 2022. The Loan Programs Office has undertaken extensive and detailed market, technical and legal due diligence on both Ioneer and the Rhyolite Ridge Project.

The Conditional Commitment is based on a revised Plan of Operations submitted by Ioneer to the U.S. Bureau of Land Management (BLM), now in the National Environmental Policy Act (NEPA) process, which completely avoids all direct impact and minimises indirect impact on Tiehm's buckwheat. Rhyolite Ridge is the most advanced undeveloped U.S. lithium project, and it is on track to provide an environmentally sustainable, long-life source of both lithium and boron for delivery into the U.S. domestic EV supply chain. The term sheet and Conditional Commitment from DOE demonstrates its strong support for the Rhyolite Ridge Project and, if finalised, the loan would be the first-ever by the DOE to provide financing for the processing component of a project where lithium is extracted and refined at site.

The proceeds from the DOE loan, along with Sibanye Stillwater Limited's ("Sibanye-Stillwater") expected equity contribution to secure a 50% stake in the Rhyolite Ridge Project once all conditions precedent for the joint venture have been fulfilled or waived, as applicable, are anticipated to fund a substantial part of the preliminary capital expenditure estimate from the revised plan of operations included in the application submitted to the DOE. Finalising the term sheet and receiving the Conditional Commitment from the DOE represent a significant step towards completing the funding for the Rhyolite Ridge Project. The proposed loan amount is necessarily based on preliminary and partially complete information that the DOE required from Ioneer pertaining to: 1) capital expenditure for a conceptual mine plan; 2) macroeconomic cost escalation assumptions; and 3) capital expenses to meet DOE stipulated requirements for participation in the ATVM program.

As a result, the proposed loan amount remains subject to negotiation and documentation of long-form agreements and various conditions and may be subsequently revised to appropriately match updated project economics leading up to financial close and upon satisfaction of several conditions, including: Positive Record of Decision (ROD) issued by the BLM; Updated cost estimate including a P85 cost contingency; Updated Resource and Reserve statements and mine plan incorporating the southern extension to the deposit; Updated economic model based on the updated information above; All necessary permits; and Final Investment Decision (FID) by both Ioneer and Sibanye-Stillwater. Ioneer and Sibanye-Stillwater will continue to progress work on the engineering, complete additional drilling post ROD to delineate the southern limits of the deposit where mining is expected to commence and optimize the mine plan. Based on these outcomes, an updated capital and operating cost estimate will be provided to stakeholders before making an FID.

The final loan is subject To Approve the Ioneer and Sibanye-Stillwater Boards, receipt of all material governmental consents necessary for the loan and the negotiation and execution of binding loan documents. When binding loan documents are signed, certain closing conditions must be satisfied before the loan commitment from DOE becomes effective and funds can be advanced.