Lithium Ionic Corp.'s (LTH:TSX.V; LTHCF:OTCQX; H3N:FSE) Bandeira lithium project in Brazil was recommended for approval by the agency in Minas Gerais state that grants environmental licenses, reported BMO Capital Markets Analyst Greg Jones in a Feb. 19 research note. The final decision is expected on Feb. 28, 2025.
"The LAC [Licença Ambiental Concomitante] is the final permitting milestone required, and a positive outcome would allow Lithium Ionic to begin construction and operations at Bandeira," Jones wrote.
100% Uplift Implied
On the news, BMO reiterated its CA$2 per share price target on the Canadian mining company, now trading at about CA$1 per share.
The target implies a potential return for investors of 100%.
Lithium Ionic remains rated Outperform.
Accelerated Permitting Process
Minas Gerais' Department of Environment and Sustainable Development, or SEMAD, issued a technical report in which it recommended that an environmental, installation and operational license be given to Lithium Ionic for Bandeira, Jones reported. This determination comes about one year and three months after the company submitted the LAC application (November 2023).
"The LAC license is part of a fast-track authorization process for critical minerals projects, designed to expedite the timeline to construction," noted the analyst.
On this accelerated permitting path, Jones explained, the LAC takes the place of the installation license and the operating license.
Timeline to Production
Jones wrote that if Lithium Ionic is granted the LAC, BMO expects it to start construction at Bandeira next quarter with an eye toward first production two years later, in Q2/27.
"We are modeling about US$300 million of capex and about a 12-month ramp-up, with Bandeira reaching target production levels in Q2/28," the analyst added.
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