Why the Ioneer (ASX:INR) share price has dropped 19% in a month

Key points

• The Ioneer share price has dropped 19% in a month
• The lithium explorer (along with a joint ventur partner) has made advancements in the construction of its US-based site
• The US site aims to become “an integral part of the US electric vehicle supply chain”

The Ioneer Ltd (ASX: INR) share price has seen a significant drop within the last month.

Between the market closes on January 4 and February 4, Ioneer shares fell 19.28%. However, they climbed 4.69% today to close at 67 cents.

So what’s been going on with the company, which describes itself as “an emerging American lithium-boron supplier”?

Let’s dive in…

How has ioneer been performing?

Last week, the explorer released its activities and cash flow report for the quarter ending 31 December.

Most notable was a strategic investment from US-based Sibanye-Stillwater to develop Ioneer’s flagship Rhyolite Ridge lithium-boron project in Nevada, described as the “most advanced lithium project in the US”.

The company reported cash and equivalents at $149 million, and activities as follows:

• Silbanye-Sillwater’s US$70 million strategic investment in Ioneer;
• “Major progress” on its goal of achieving secondary listing of Ioneer shares by CY 2022;
• Advancement in offtake discussions directed at the US supply chain, which are expected to conclude by CY 2022;
• “Engineering and procurement activities” for site construction at advanced stage; and
• Ioneer invited into due diligence by the US Department of Energy’s (DOE) Loan Programs Office.

Since 31 December, the Ioneer share price has decreased by 16%.

What’s going on with Ioneer?

Despite the drop in the Ioneer share price, the explorer is remaining positive on its flagship operations.

The financing from Sibayne-Stillwater (which has entered into a joint venture with the company), tied with the invite from the DOE, signifies a major step towards the lithium project becoming “an integral part of the US electric vehicle supply chain”.

However, the Ioneer share price saw a 14.5% drop between the DOE’s invitation on December 20 and its activities report on January 25.

Ioneer managing director Bernard Rowe said Sibayne-Stillwater “share our vision of becoming a major force in the battery materials supply chain” and that the “investment further aligns our two companies as we look to bring the Rhyolite Ridge project to production”.

It aims to be construction-ready by Q4 2022.

Further, Rowe said:

We continue to see increased demand globally for lithium products and are well positioned to capitalise on the US Government’s efforts to secure critical minerals supply chains for end uses like EVs and renewable energy infrastructure in the US.

The uptick in inbound enquiries from potential offtake parties has only strengthened this quarter, as lithium supply is short, and prices have been rising.

Ioneer share price snapshot

Over the past 12 months, the Ioneer share price has increased by 63%. It saw its lowest price of 28 cents in late June and its highest price of 85 cents in mid-December.

The company has a market capitalisation of $1.31 billion and 2.05 billion shares issued.

The post Why the Ioneer (ASX:INR) share price has dropped 19% in a month appeared first on The Motley Fool Australia.

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Motley Fool contributor Alice de Bruin has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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