Investment Tips 30-11-2023 12:01 16 Views

Ion Energy

Overview

ION Energy Ltd. (TSXV:ION, OTC:IONGF, FSE:5YB) is a battery metal exploration company focusing on lithium exploration in southeast Mongolia. The company holds one of the largest mining licenses in Mongolia and is leveraging its first-mover advantage to explore an area of more than 80,000 hectares containing lithium brine targets.

The global lithium market is projected to grow to US$6.62 billion by the end of 2028 driven by demand from the green energy and electric vehicle markets. Rising concern over global carbon emissions is leading to the increasing adoption of green technologies, including electric vehicles and large-scale energy storage solutions, all of which require massive amounts of battery metals like lithium, cobalt and nickel. Governments around the world, including the United States and China, are working to secure a steady supply of battery metals to prepare for a green energy future.

The Mongolian government has granted ION Energy one of the largest exploration licenses in the country for the company’s Baavhai-Uul project in the Sukhbaatar province. The 81,758-hectare asset contains high-grade, near-surface lithium brines of up to 810 parts per million (ppm) with low potassium and magnesium ratios, which makes for better crystallization of the lithium hydroxide. ION Energy is the first company to be granted a license for this asset, which has never been mined before. Previous exploration work has been conducted on the project by the Technical University of Mongolia and the Mongolian government.

The potential for significant deposits is driven by the geology of Southeast Mongolia, which mirrors the famed Lithium Triangle of South America. Like the Lithium Triangle, the region is an endorheic basin contained within a low precipitation zone.

ION Energy’s management team has extensive experience working with the Mongolian government, which has been largely supportive of mining exploration within the country. The Mongolian economy is largely commodity-based and is considered by the World Bank to be stable and growing. Mongolia’s Foreign Investment Promotion and Protection Agreement (FIPA) with Canada, signed in 2017, established a legal framework under which Canadian investors working in Mongolia are offered greater predictability and certainty for their investments.

Outside of Mongolia, ION Energy is exploring opportunities in Canada. It has signed a definitive agreement to acquire the Bliss Lake Lithium Pegmatite project in the Northwest Territories. The project is 5,798 hectares in area and totals five contiguous licenses. It is located less than 15 kilometers from Li-FT Power Ltd’s ‘Road Access Group,’ where numerous lithium-bearing pegmatites have been identified and sampled with over 1 percent lithium oxide. Numerous pegmatite occurrences have been identified from landsat images on the Bliss Lake Project, the largest of which is interpreted to be more than 300 meters in strike length.

Company Highlights

ION Energy is the first mover in-country on lithium exploration, and holder of one of the largest mining licenses in Mongolia, with more than 100,000 hectares of lithium brine property, consisting of two projects: Baavhai Uul and Urgakh NaranManagement owns 25 percent of the companyAccomplished management team with extensive experience working with the Mongolian governmentHas solidified its vision of becoming a global diversified lithium company, by acquiring a Canadian lithium pegmatite asset in the NWT.The company has acquired The Little Nahanni claims and Bliss Lake Lithium Pegmatite Project in NWT, Canada.

Key Projects

Baavhai-Uul Project, Mongolia

ION Energy’s Baavhai-Uul asset is located approximately 800 kilometers southeast of Ulaanbaatar, the capital of Mongolia, and 200 kilometers south of Baruun-Urt, the capital of Mongolia’s Sukhbaatar province. The approximately 81,758-hectare property is about 200 kilometers from the Chinese border, with paved roads connecting all population centers in the area to the capital city. Gravel roads lead directly to the Baavhai-Uul property. Local towns could supply the project with inexpensive labor, while supplies and equipment can easily be obtained from Ulaanbaatar.

Exploration work

Exploration work has been conducted on the property by the Mongolian University of Science and Technology. The university’s work consisted of two pits drilled by hand auger in the lake bottom collected in 20-centimeter intervals and has indicated the presence of high-grade, near-surface lithium brines. Sampling results by the university indicate lithium content in brines of up to 811 ppm lithium with an average of 462.64 ppm lithium. The samples were assayed by the independent certified assay lab Khanlab LLC located in Ulaanbaatar.

Drilling Results

ION Energy successfully completed the drilling of three lithological diamond core drill holes for a total depth of 954 meters. Notable two-meter drill core results include:

UNDH-01: 123 meters at 278 ppm lithium from 122 meters, with maximum lithium reported at 832 ppm over 2 meters;UNDH-02: 100 meters at 362 ppm lithium from 65 meters, with maximum lithium at 601 ppm over 2 meters; andUNDH-03: 71.4 meters at 360 ppm lithium from 3.6 meters with maximum lithium at 911 ppm over 2 meters.

ION Energy also completed the drilling of two hydrological test wells for the testing of basin brines. The third test well is currently being completed.

In March 2023, the company completed the drilling of three water wells on site for a total of 900 meters, which consisted of UNWH-01 (300 meters), UNWH-02 (300 meters and UNWH-03 (300 meters).

Hydrogeological studies have commenced at the Urgakh Naran site, the first crucial step to laying the framework for NI 43-101 resource estimates at this site, and guiding future exploration work. Lithological results released in December 2022 have shown the basin to be impregnated.

Urgakh Naran: Rising Sun Project

Urgakh Naran Project license map

ION Energy’s Urgakh Naran Rising Sun project is composed of over 29,000 hectares of highly prospective lithium terrain. The acquisition of the Urgakh Naran Project brings the total land area held by the company prospective for lithium salars to over 100,000 hectares.

The project is situated in the arid and infrastructure-rich region of the South Gobi Desert, where the brine sample collected at surface assayed 918 mg/L lithium – the highest-grade lithium brine known to have ever been collected in Mongolia.

In August 2022, ION Energy completed an additional 16-line-kilometer TEM survey intersecting the previously completed 82-line-kilometer survey. Results indicate strong conductivity and low resistivity that is typical of a significant brine aquifer.

Bliss Lake Lithium Project

The Bliss Lake Lithium Project spans 5,798 hectares with five contiguous licenses located less than 15 kilometers from Li-FT Power’s Road Access Group, where numerous lithium-bearing pegmatites have been identified and sampled with over 1 percent lithium oxide. Numerous pegmatite occurrences were identified from landsat images on the Bliss Lake Project and the largest of which is interpreted to be over 300 meters in strike length.

Little Nahanni Claims

The Little Nahanni claims were acquired in August 2023, and covers approximately 900 hectares situated in a pegmatite-rich area, with pegmatites first identified in 1961. Little Nahanni is close to Lake Winn Resources and Li-FT Power assets, where significant results of lithium have been identified. The claims are underexplored and have the potential for lithium discovery.

Management Team

Ali Haji – CEO and Director

Ali Haji is the director of Antler Hill Mining Ltd and Spirit Banner II Capital. Haji serves as an advisor to ATMA Capital Markets Ltd and Steppe Gold. Ali Haji has extensive knowledge of the financial services sector after having spent over 13 years in the asset management industry performing strategic and process improvement roles. He started his career as a technology analyst at Invesco in 2006 and advanced into various roles including technology risk, controls, program management, and process improvement, with international assignments involving mergers and acquisitions in Hong Kong, USA and Australia. Most recently, he was a principal contributor to the creation of a Center of Excellence in London, England for Invesco. Haji attended Western University and holds a BSc in computer science.

Matthew Wood – Chairman of the Board

Matthew Wood is a mineral resource explorer and developer with over 25 years of global industry experience in mining and commodities investments. He serves as the Director (former Chairman) of Steppe Gold (TSX:STGO). He was a founding chairman of Avanco Resources, which sold in March 2018 for AU$440 million and Hunnu Coal, which sold for US$500 million in 2012.

He has managed investment deals in diamonds, coal, energy, ferrous metals, base and precious metals, and other commodities. His unique skills in technical and economic evaluation of resource opportunities have resulted in a record of nurturing resource deals from early stage to market listings and exit strategies for his investors.

Bataa Tumur-Ochir – Director

Bataa Tumur-Ochir is a Mongolian citizen, and CEO and Chairman of Steppe Gold. At Steppe Gold, he is responsible for new business acquisitions, development and government and community relations. Tumur-Ochir is also responsible for daily operations in Mongolia. Tumur-Ochir is currently a director at GCD Mongolia and CEO and executive director of ASX-listed Wolf Petroleum.

Under his guidance, Wolf Petroleum was awarded the “Operator of the Year Award” from the Petroleum Authority of Mongolia, and today, Wolf Petroleum is recognized as the fastest-growing petroleum exploration company with the largest petroleum exploration acreage in Mongolia. Tumur-Ochir holds a bachelor’s degree in business administration and graduate certificates in international business and marketing from Australia and Singapore.

Aneel Waraich – Director

Aneel Waraich is the EVP and director of Steppe Gold, director of Antler Hill Mining CEO of Spirit Banner Capital, and founder of ATMA and ATMACORP with experience in investment banking at Dundee.

Waraich is the founder of ATMA Capital Markets and ATMACORP and a financial services professional with progressive experience in both asset management and corporate finance businesses.

Waraich focuses primarily on advising public and private companies in the Natural Resources sector. In previous roles at Goodman and Company Investment Counsel and Dundee Capital Markets, he worked as an analyst valuing private companies. Most recently Aneel worked as an investment banker focusing on deal origination, going-public transactions and financings for both public and private companies in the resource and technology sectors.

Joseph Gallucci – Director

Joseph Gallucci is a senior capital markets executive and corporate director with more than 20 years in investment banking and equity research, focused on global mining, base metals, precious metals, critical metals and bulk commodities. He has worked with BMO Capital Markets, GMP Securities and Dundee Securities. He is currently the managing director and head of investment banking at Laurentian Bank Securities, and holds the ICD.D designation.

Enkhtuvshin Khishigsuren – Director

Enkhtuvshin Khishigsuren has over 30 years of Mongolian mineral exploration experience. He has focused his expertise on the precious metals exploration sector resulting in successes for numerous companies. Khishigsuren spent the first 10-12 years of his career at Central Geological Expedition doing regional geological mapping in various areas of Mongolia, followed by seven years as senior exploration manager on exploration of precious metal in Mongolia for Harrods Minerals, a privately funded exploration company.

Since 2005 he has been running his own company Erdenyn Erel and conducting exploration and consulting services to Western exploration and mining companies. Khishigsuren has been responsible for identifying targets and properties. His knowledge and experience have resulted in the discovery of several prospective gold and copper deposits in Mongolia; such as the multimillion-ounce gold deposit Olon Ovoot, a large molybdenum porphyry deposit Zuun mod and the Shand copper porphyry deposit near Erdenet copper mine.

Robert Payment – Chief Financial Officer

Robert Payment is a seasoned certified public accountant and chartered accountant with more than 16 years of experience in finance, reporting, regulatory compliance, public company administration, equity markets, and the financing of publicly traded companies. Since 2014, he has served as a CFO and consultant to a portfolio of companies listed on both the TSX Venture Exchange and the Canadian Securities Exchange. He has extensive involvement across the natural resource, technology and retail sectors, with a BBA from Simon Fraser University.

Wendy Li – Director, Asia

Wendy Li’s more than 18 years of extensive commercial and business development experience in Asia, including Mongolia and China, has spanned commodity branding and trading, supply chain management and asset development. Before joining ION Energy, Li served as general manager of International Trade for Noble Resources and general manager of marketing for SouthGobi Resources. Li graduated from Wilfrid Laurier University, in Waterloo, Canada with a Bachelor of Arts, Honours in economic and financial management.

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