ION Energy – Disrupting Asia’s Battery Metals Scene
The vast north Asian country of Mongolia may not be the first place that investors think of when the subject of battery materials comes up. But this gigantic, sparsely populated and largely unexplored territory might just be a sleeping giant. Lying beneath the immense Mongolian steppes are untapped natural resources of tin, coal, gold, oil, and essential next generation battery materials like lithium and copper. Mongolia also has an enviable geographic location, right next door to China, the world’s largest consumer economy and leading global battery manufacturer, and is on the doorstep of several other Asian economic powerhouses like South Korea and Japan.
Major mining companies are beginning to take notice of the country dubbed “The Saudi Arabia of Asia” Gold behemoth Rio Tinto made a $5 billion commitment to Mongolia, and China’s Zijin Mining Group has committed to a strategic partnership with Mongolia’s Xanadu Mines.
On the heels of these majors are some intrepid junior exploration companies, well-poised to continue to highlight resource-rich Mongolia’s untapped potential and fortunate geographic positioning. ION Energy (TSXV: ION)(OTCQB: IONGF) is one such company. The Canadian early-stage lithium brine explorer is making a move to disrupt Asia’s battery metals supply chain. ION was granted Mongolia’s largest exploration license ever, and first lithium brine license, and currently controls two assets totaling 110,000 hectares of highly prospective lithium, just 24 kilometers from the Chinese border.
“China consumes 53% of the world's lithium. They refine 75% of the world's lithium that ends up in batteries worldwide. They produce more EVs per capita than anywhere else on the planet.” enthuses ION’s CEO Ali Haji, “Our proximity to that market makes ION a rather compelling story for an investor to come into.”
Haji believes that if ION Energy can find significant amounts of lithium – a commodity with increasing global demand – on China’s doorstep, the company can disrupt the entire global lithium supply chain, which currently flows through Latin America or Australia, where the vast majority of lithium is found, before being routed to major consumers in Asia.
If recent exploratory drilling results on ION’s Mongolian assets are any indication, the company could be well on their way to fulfilling that goal.
In December 2021, ION announced that it had made a significant lithium discovery at its 81,000-hectare Baavhai Uul project, located in Mongolia’s Sukhbaatar province, with grades of up to 1502 ppm (parts per million). The implication of this finding is not lost on Ali Haji. “1502 ppm is very significant based on what you would find at other lithium projects around the world. Some of the assets that have come into production have grades as low as 400 ppm, so the 1502 at Baavhai Uul is an anomaly. It is extremely exciting for us, and we look forward to doing additional work to derisk those assets further.”
The company recently reported significant findings of lithium brine at their secondary asset, Urgakh Naran, as well. The brine sample found there assayed 918 mg/L, making it the highest-grade lithium brine ever collected in Mongolia. ION is planning an early resource indication for both the Baavhai Uul and Urgakh Naran projects for the fall of 2022.
The Calgary born, Nairobi, Kenya raised Haji spent 13 years at the global asset management firm Invesco, specializing in M&A, strategic initiatives, and program management before co-founding ION Energy in 2017 with Executive Chairman Matthew Wood after a visit to Mongolia advising Steppe Gold. “Matthew and I looked at Mongolia as a country that's vastly underexplored. We looked at the potential for finding lithium in country and started to dig up the archives, and we found that lithium was in fact found in Sukhbaatar province, close to the border with China. We then forged ahead with the vision of ION Energy, knowing that lithium was going to make a comeback, much like every other element given the cyclical nature of natural resources.”
While ION is busy de-risking its two major lithium assets, they’re also dipping their toes into Mongolian copper. In February 2022, the company announced a strategic alliance with Aranjin Resources, an emerging Mongolian copper exploration company that owns the highly prospective Sharga Copper Project. The reciprocal mining rights agreement gives ION energy 20% of all proceeds for any copper or nickel found on ION's assets. And on the flipside, it gives Aranjin Resources 20% of all revenue derived from lithium being extracted from Aranjin’s resources.
The Aranjin deal came about for two reasons, according to Haji, “One, the fact that we found copper nickel anomalies on Baavhai Uul, and two, we had some common leadership between both companies. Our chairman, Matthew Wood, is the chairman of Aranjin Resources as well as ION Energy. We saw an opportunity for us to synergistically work across both these elements that are extremely battery metal important.”
With their feet in both Mongolian lithium, and copper, Haji is banking on not just the natural resources of Mongolia, but on the country’s political stability as well. “Mongolia is a very young democracy. We've been in the country since 2009 as a group. We've seen the government change on multiple occasions. And as of the last election cycle, the People’s Party took a 70% sort of stake in government in terms of their win that ultimately has given us a very stable government, a very stable business environment.”
Other major players like Standard Lithium Ltd. (SLI: TSX-V,SLI: NYSE) and Chile’s Sociedad Quimica y Minera de Chile (SQM: NYSE), continue to produce lithium elsewhere in the world, but for ION Energy, location is everything. Situated next door to the world’s leading consumer of battery materials is a potential game-changer for CEO Ali Haji, “We’re all-in on Mongolia. We see a lot of value in Mongolia and having the likes of Rio Tinto check that box for us or reaffirm it to our global investor audience makes our job that much easier. Mongolia is truly open for business, so we're excited for the years ahead.”
If ION Energy continues to find high-grade lithium under the steppes on Mongolia, Haji’s excitement will be well warranted.
For more information on ION Energy Ltd. (TSX.V: ION, OTCQB: IONGF) please click the investor request info button.
FULL DISCLOSURE: ION Energy Ltd. is a client of BTV-Business Television. This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. Any action taken as a result of reading information here is the reader’s sole responsibility.