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Stonegate Capital Partners Initiates Coverage On Ion Energy Ltd. (TSXV:ION)

·3 min read

DALLAS, TX / ACCESSWIRE / October 28, 2020 / Ion Energy Ltd. (TSXV:ION): The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/ION.TO Initiation.pdf

Company Description

Ion Energy Ltd. explores and develops lithium assets in Asia. The company hold interest in the Baavhai Uul Lithium Brine Project covering an area of approximately 81,758 hectares located in Mongolia. The company has the distinction of having the first lithium brine license ever granted in Mongolia. Furthermore it possess one of the largest exploration licenses in Mongolia. The company was formed via a reverse merger in August 2020. The company is headquartered in Toronto, Canada.


  • One of the largest exploration licenses in Mongolia - The company has the distinction of having been issued the first lithium brine license ever granted in Mongolia. Ion Energy holds a 100% interest in the Baavhai Uul Lithium Brine Project covering an area of approximately 81,758 hectares located in the southeastern region of Mongolia.

  • Baavhai Uul project is promising - Early exploration drill holes all contained significant levels of lithium with an average grade of 426 ppm lithium with a maximum grade of 811 ppm lithium. The project also has a very promising geological profile with low potassium and magnesium ratios, shallow aquifers, is a brine source vs. rock, and is in the Gobi Desert with high evaporation rates.

  • Project location strategically located providing advantages - The Baavhai Uul project is strategically located to China via a 30km road. Additionally, the location is close to Korea, Taiwan, and Japan. According to a 2020 Benchmark Mineral Intelligence report, China dominates lithium-ion battery mega-factories with 89 of 123 of the worlds mega-factories in the pipeline, located in China. Assuming the company's property proves itself as economically viable, the project location will provide a significant cost advantage as shipping costs should be lower given the proximity to China and other Asian countries.

  • Management team with a track record - The management team at Ion Energy has successfully operated in Mongolia for over a decade. Collectively, the team has over 100 years of combined experience in mining and exploration activities. The team has also successfully delivered results to investors via three transaction that includes the A$20M IPO of Hunnu Coal in 2010; the C$25M IPO of Steppe Gold in 2018; and the sale of Hunnu Coal at A$500M to Banpu Minerals in 2011.

  • Long-term demand for lithium - Global demand for lithium is expected to increase driven by clean energy. While various applications should help drive demand for lithium, the market for EV's is forecast to be the largest driver. With 2018 EV volumes in China at about 1.1M unites, vs. Europe and the US at 0.32M and 0.36M, respectively, China's EV market is about 3x the size.

  • Valuation - Given the exploration stage of Ion Energy, there are no reserves, or expected cash flows in the near term. As such, we employ an EV/Hectare methodology to help frame valuation. Comparable companies and the implied valuations offer a wide range from C$94 EV/Hectare to C$3,868 EV/Hectare with a median of C$646. This compares to Ion Energy at C$181 EV/Hectare

About Stonegate Capital Partners
Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.

Stonegate Capital Partners
(214) 987-4121

SOURCE: Stonegate Capital Partners

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