With all the small cap lithium explorers running lately (LKE, CXO, LTR), it seems like INR is being left behind. The news of the project being halted due to concerns by the authorities have been greatly overdone.
Ioneer is looking to produce lithium carbonate from its Rhyolite Ridge project in Nevada, North America. It has the advantage of being located in the USA where there are very few lithium (Li) projects. The USA is also the second biggest car market in the world. Geopolitical risks have put a spotlight on the supply chain for the EV companies in the USA.
What sets them apart is a hard rock deposit and making the lithium carbonate and boric acid onsite and selling the final chemical which has a higher value than shipping put the raw material. Most Li miners currently send out what they dig out to another country for processing.
Because the nature of the ore, the side effect of the process for leeching the Li and boron (B) produces the final product lithium carbonate, no intermediate steps are involved. You go from crushing the rock to producing the lithium carbonate in a continuous process. The refining process doe snot use any energy source from gas or electricity and uses the waste heat from the sulfuric acid plant onsite which is made for the leeching process. This makes the project have very attractive ESG credentials - uses low energy and low CO2 emissions, which is being sought after by many EV makers.
Recent concerns about issues with the project due to the rare plant species located in the proposed site has been over blown. Managing director Bernard Rowe has confirmed in a recent interview that they have been working closely relevant authorities and are in the process of updating the mine plan to reflect the small changes to allow the plants to be undisturbed. There is no other barriers or issues slowing down the project, once it is completed, they plan to move ahead to the final stage of the permitting process. This is a potential catalyst around the end of March when they anticipate to have the updates completed. The final permit is due to be completed by the end of the current calendar year which could be another catalyst.
Summary
• The next Li producer in the USA, will quadruple the existing Li production.
• Equity funding already in place and debt funding to be finalized.
• Have 2/3 critical permits to allow construction.
WHAT DOES THE CHART SAY??
• The EMA's (see chart notes) are indicating a sideways or weak bullish trend at the moment.
• The price in the last couple of days has broken out of a trend line.
• Todays finish (intraday) retraced 78.6% from the open which is showing weakness.
• The bulls are dominating the volumes from the low pivot point.
• The vol profile node area 0.635 - 0.66 will be a key level to look out for. If the price hits this level and bounces down, expect the price momentum to continue down. If it breaks above this area, I expect some resistance in the next high vol node around 0.79.
Trade Thesis
• Looking to swing trade, holding for a few months up about a year. Let the thematic play out.
• Ideally I should wait a few more days to see what happens to the breakout as it is looking shaky atm. Also I should see how it reeacts when it hits the critical level around 0.635 - 0.66 as mentioned above.
• To ease my feeling of FOMO though - I have aggressively entered a small starting position today at 0.565. I believe in the thematic and I think it will last a bit longer yet. These type of stocks tend to run and then go sideways for a bit as I have learnt the hard way in other similar trades where I sold too early. So I am willing to observe this closely now that I have my starting position.
• At the moment, setting SL at 0.445 and TP 0.795, just before the ATH levels.
Ioneer is looking to produce lithium carbonate from its Rhyolite Ridge project in Nevada, North America. It has the advantage of being located in the USA where there are very few lithium (Li) projects. The USA is also the second biggest car market in the world. Geopolitical risks have put a spotlight on the supply chain for the EV companies in the USA.
What sets them apart is a hard rock deposit and making the lithium carbonate and boric acid onsite and selling the final chemical which has a higher value than shipping put the raw material. Most Li miners currently send out what they dig out to another country for processing.
Because the nature of the ore, the side effect of the process for leeching the Li and boron (B) produces the final product lithium carbonate, no intermediate steps are involved. You go from crushing the rock to producing the lithium carbonate in a continuous process. The refining process doe snot use any energy source from gas or electricity and uses the waste heat from the sulfuric acid plant onsite which is made for the leeching process. This makes the project have very attractive ESG credentials - uses low energy and low CO2 emissions, which is being sought after by many EV makers.
Recent concerns about issues with the project due to the rare plant species located in the proposed site has been over blown. Managing director Bernard Rowe has confirmed in a recent interview that they have been working closely relevant authorities and are in the process of updating the mine plan to reflect the small changes to allow the plants to be undisturbed. There is no other barriers or issues slowing down the project, once it is completed, they plan to move ahead to the final stage of the permitting process. This is a potential catalyst around the end of March when they anticipate to have the updates completed. The final permit is due to be completed by the end of the current calendar year which could be another catalyst.
Summary
• The next Li producer in the USA, will quadruple the existing Li production.
• Equity funding already in place and debt funding to be finalized.
• Have 2/3 critical permits to allow construction.
WHAT DOES THE CHART SAY??
• The EMA's (see chart notes) are indicating a sideways or weak bullish trend at the moment.
• The price in the last couple of days has broken out of a trend line.
• Todays finish (intraday) retraced 78.6% from the open which is showing weakness.
• The bulls are dominating the volumes from the low pivot point.
• The vol profile node area 0.635 - 0.66 will be a key level to look out for. If the price hits this level and bounces down, expect the price momentum to continue down. If it breaks above this area, I expect some resistance in the next high vol node around 0.79.
Trade Thesis
• Looking to swing trade, holding for a few months up about a year. Let the thematic play out.
• Ideally I should wait a few more days to see what happens to the breakout as it is looking shaky atm. Also I should see how it reeacts when it hits the critical level around 0.635 - 0.66 as mentioned above.
• To ease my feeling of FOMO though - I have aggressively entered a small starting position today at 0.565. I believe in the thematic and I think it will last a bit longer yet. These type of stocks tend to run and then go sideways for a bit as I have learnt the hard way in other similar trades where I sold too early. So I am willing to observe this closely now that I have my starting position.
• At the moment, setting SL at 0.445 and TP 0.795, just before the ATH levels.
