Lithium Ionic Corp. (LTH:TSX.V; LTHCF:OTCQX; H3N:FSE) again increased the overall resource estimate of its Bandeira project in Brazil's Lithium Valley, this time by 9%, reported Clarus Securities Analyst Varun Arora in a May 7 research note.
"Overall, we see potential for multiple production fronts as the company continues to discover new resources, adding to the production profile while also expanding mine life and potentially providing exposure to multiple commodity cycles," wrote Arora.
1,011% Upside Implied
Clarus has a CA$8 per share target price on the Canadian lithium explorer, whose price at the time of the report was about CA$0.72 per share. The difference between these prices suggests a potential return for investors of 1,011%.
Lithium Ionic remains rated Speculative Buy.
The company has 159 million (159M) basic shares outstanding and 185M diluted shares outstanding. Its market cap is CA$114 million. Its 52-week range is CA$0.41–1.17 per share.
Resource Keeps Growing
Arora discussed Bandeira's new resource estimate and how it compares to previous ones. The updated global resource now is 45,800,000 tons (45.8 Mt) of 1.34% lithium oxide (Li2O). It is based on 297 drill holes over 60,301 meters, drilled between April 2022 and September 2024.
The previous resource update in April 2024 reflected a 42% increase from the October 2023 one.
"As a reminder, the maiden global resource at Bandeira was only about 16 Mt at about 1.4% Li2O in June 2023, which represents more than 185% resource growth in less than two years," wrote Arora.
Between the April 2024 and latest updates, the Measured & Indicated (M&I) resource increased 15% to 27.27 Mt of 1.34% Li2O. The Inferred resource, mostly the same, is about 18.6 Mt of 1.34% Li2O.
Companywide Resource
Lithium Ionic's total resource, encompassing all of its projects, is 68.6 Mt of 1.25% Li2O. This represents only about 5% of the 14,182 hectare land package. The companywide resource breaks down into 45.8 Mt at Bandeira, 19.4 Mt at Baixa Grande and 3.4 Mt at Galvani.
Clarus Securities expects that with more drilling, the resources at Bandeira at Baixa Grande will keep increasing, the latter toward 25–30 Mt, noted Arora.
Implications of Growth
With an expanding resource comes the potential for multiple production fronts, mine life extensions and optionality to the commodity price, wrote Arora.
For example, using the 85% conversion rate used in the 2024 study of Bandeira, the project's current M&I resource equates to roughly 5 Mt of additional reserves. This translates into another three to four years of mine life, or specifically for Bandeira, an increase to a 17- to 18-year life of mine.
"This is in line with our current modeled mine life as we had assumed additional reserves in our mine model for Bandeira through conversions and resource expansion," Arora explained.
The mine life outlined in the 2024 feasibility study was 14 years. That study was based on only 17 Mt in the mine plan or 21 Mt (85% of the M&I resource).
On the Horizon
Lithium Ionic plans to incorporate the new Bandeira mineral resource estimate into an updated feasibility study, due to be completed in H2/25.
Other near-term catalysts for the company are approval/receipt of a construction permit and finalization of financing through the Export-Import Bank of the United States.
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- Lithium Ionic Corp. is a billboard sponsor of Streetwise Reports.
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Disclosures for Clarus Securities, Lithium Ionic Corp., May 7, 2025
Clarus Securities Equity Research Disclosures Within the last 24 months, Clarus Securities Inc. has managed or co-managed a public offering of securities of this company. Within the last 24 months, Clarus Securities Inc. has received compensation for investment banking services with respect to the securities of this company. General Disclosure The information and opinions in this report were prepared by Clarus Securities Inc. (“Clarus Securities”). Clarus Securities is a wholly-owned subsidiary of Clarus Securities Holdings Ltd. and is an affiliate of such. The reader should assume that Clarus Securities or its affiliate may have a conflict of interest and should not rely solely on this report in evaluating whether or not to buy or sell securities of issuers discussed herein. The opinions, estimates and projections contained in this report are those of Clarus Securities as of the date of this report and are subject to change without notice. Clarus Securities endeavours to ensure that the contents have been compiled or derived from sources that we believe are reliable and contain information and opinions that are accurate and complete. However, Clarus Securities makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions contained herein and accepts no liability whatsoever for any loss arising from any use of, or reliance on, this report or its contents. Information may be available to Clarus Securities or its affiliate that is not reflected in this report. This report is not to be construed as an offer or solicitation to buy or sell any security. No part of this report may be reproduced or re-distributed without the written consent of Clarus Securities. Conflicts of Interest The research analyst and/or associates who prepared this report are compensated based upon (among other factors) the overall profitability of Clarus Securities and its affiliate, which includes the overall profitability of investment banking and related services. In the normal course of its business, Clarus Securities or its affiliate may provide financial advisory and/or investment banking services for the issuers mentioned in this report in return for remuneration and might seek to become engaged for such services from any of such issuers in this report within the next three months. Clarus Securities or its affiliate may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis. Clarus Securities, its affiliate, and/or their respective officers, directors or employees may from time to time acquire, hold or sell securities discussed herein, or in related securities or in options, futures or other derivative instruments based thereon. Analyst’s Certification Each Clarus Securities research analyst whose name appears on the front page of this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst’s personal views about the Company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst’s compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report. Equity Research Ratings Buy: Attractively valued and expected to appreciate significantly from the current price over the next 12-18 months. Speculative Buy: Expected to appreciate significantly from the current price over the next 12-18 months. Financial and/or operational risk is high in the analyst’s view. Accumulate: Attractively valued, but given the current market price, is expected to appreciate moderately over the next 12 -18 months. Hold: Fairly valued and expected to trade in line with the current price over the next 12-18 months. Sell: Overvalued and expected to decline from the current price over the next 12-18 months. Under review: Pending additional review and/or information. No rating presently assigned. Tender: Company subject to an acquisition bid: accept offer. A summary of our research ratings distribution can be found on our website. Dissemination of Research Clarus Securities’ Equity Research is available via our website and is currently distributed in electronic form to our complete distribution list at the same time. Please contact your Clarus institutional sales or trading representative or investment advisor for more information. Institutional clients may also receive our research via THOMSON and REUTERS. For additional disclosures, please visit our website http://www.clarussecurities.com. © Clarus Securities Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.
