Lithium Ionic boosts returns with stronger DFS for Bandeira lithium project in Brazil

Lithium Ionic (TSXV: LTH) has raised projected returns for its Bandeira project in Brazil. A new feasibility study shows a $1.45B NPV, 61% IRR, lower capex, and extended mine life.

Toronto-listed Lithium Ionic (TSXV: LTH) announced that its definitive feasibility study (DFS) for the Bandeira lithium project in Minas Gerais, Brazil, shows significantly improved economics compared with earlier estimates. The updated study highlights higher returns, reduced capital costs, and an extended mine life, strengthening Bandeira’s standing among the world’s most competitive hard-rock lithium operations.

Stronger project economics

Lithium Ionic said the project’s post-tax net present value (NPV) now stands at $1.45 billion, up from $1.31 billion in its May 2024 study. The internal rate of return (IRR) rises to 61% from 40%, while the payback period has shortened to just 2.2 years compared to 3.4 years previously.

CEO Blake Hylands emphasized Bandeira’s strengthened profile, stating:

“What was already a robust project is now even stronger – delivering a longer mine life, lower capital requirements and significantly improved project economics.”

Capital and operating efficiencies

Capital expenditures, including contingency, are now forecast at $191 million, a 28% reduction from earlier estimates of $266 million. Operating costs are estimated at $378 per tonne of spodumene concentrate, placing the project in the first quartile of global lithium producers.

The project’s mine life has been extended to 18.5 years from 14 years, with annual output averaging 177,000 tonnes of spodumene concentrate.

Resource growth in Lithium Valley

Bandeira’s measured and indicated resources have expanded to 27.27 million tonnes grading 1.34% Li₂O, equal to 901,059 tonnes of lithium carbonate equivalent (LCE). This represents a one-third increase over last year’s figures. Inferred resources also edged up 1.9% to 18.55 million tonnes grading 1.34% Li₂O, or 615,432 tonnes of LCE.

Covering 1.6 sq. km, Bandeira represents only about 1% of Lithium Ionic’s 141.8-sq.-km land package in Brazil’s so-called “Lithium Valley.” The region also hosts the company’s Salinas project, located 120 km to the north.

Market reaction

Shares of Lithium Ionic rose 3.8% to C$0.82 on Wednesday morning in Toronto, giving the company a market capitalization of about C$130 million. The stock has traded between C$0.50 and C$1.15 over the past 12 months.

Outlook

With construction scheduled to begin shortly, production at Bandeira is expected to start in the second half of 2026. The company believes the updated feasibility results confirm its position as a key player in the rapidly expanding lithium market, underpinned by surging global demand for battery materials.