Ioneer stock forecast: Will INR shares rise as the lithium-boron supplier makes a bet on the clean energy transition, supplying the EV battery industry?
The share price for lithium-boron supplier Ioneer (INR) on the Australian Stock Exchange (ASX) is approaching its 52-week low seen in June, as the stock has dropped sharply in December.
The Australia-listed company is focused on developing a lithium-boron project in Nevada in the US, to capitalise on the clean energy transition by supplying the electric vehicle (EV) battery industry.
Is the fall in the INR stock price an opportunity to pick up shares at a discount to profit from long-term gains?
In this article, we look at the key drivers for INR’S share price performance and some of the latest Ioneer stock predictions.
Ioneer aims to supply growing US EV industry
Headquartered in Sydney, Australia, Ioneer was founded in 2001 as Global Geoscience. The company was listed on the ASX in 2007. The company listed its American Depositary Receipts (ADRs) on the Nasdaq Stock Exchange in the US under the ticker symbol IONR on 30 June 2022.
Global Geoscience acquired an option for the Rhyolite Ridge Lithium-Boron Project in June 2016 and acquired a 100% interest in the project in 2017.
The company was renamed Ioneer in 2018, a combination of the words “ion” and “pioneer”, reflecting its focus on producing materials that are essential to a sustainable future, extracting them in an environmentally and socially responsible manner.
The Rhyolite Ridge project is expected to be one of the lowest-cost lithium producers because of its boron content. It is estimated that the mine will produce around 20,600 tonnes of lithium per year. The mine is expected to start operations in 2025, producing enough lithium materials to supply approximately 400,000 EV batteries every year. The site is close to major lithium producer Albemarle’s Silver Peak lithium mine and 330km southeast of EV manufacturer Tesla’s Gigafactory near Reno, Nevada, which requires lithium to produce its battery cells.
Precious metals producer Sibanye Stillwater became a 50% joint venture partner in the project in October 2021, investing $490m.
The Rhyolite Ridge project is controversial, as there are concerns that It may damage a rare wildflower in the area, Tiehm's buckwheat, raising a debate as to whether the benefits of extracting lithium from the site outweigh the impact on the plant. The US Fish and Wildlife Service designated Tiehm’s buckwheat as an endangered species under the Endangered Species Act on 14 December and designated 910 acres of critical habitat in the Rhyolite Ridge area.
INR share price approaches 52-week low
Ioneer’s share price has fallen by 54.8% since the start of 2022 to around A$0.38, although it has rebounded from a decline to A$0.08 in March 2020 at the start of Covid-19 pandemic lockdowns.
In April 2020, Ioneer released the results of a Definitive Feasibility Study (DFS) that validated the economics and viability of the Rhyolite Ridge project.
The INR stock price climbed to an all-time high of A$0.84 on 14 January 2022.
In February, South Korea’s EcoPro Innovation increased the volume of lithium it plans to offtake from the mine from 2,000 tonnes per year to 7,000 tonnes per year, the largest amount available under an agreement the two companies signed in June 2021.
Ioneer has since signed other offtake agreements, including a five-year deal agreed in July to supply 7,000 tonnes a year to Ford and a five-year deal to supply 4,000 tonnes annually to Prime Planet Energy & Solutions, which is a joint venture between Japanese automotive manufacturer Toyota and battery manufacturer Panasonic.
On 8 December, Ioneer signed an agreement with Shell Canada Energy to buy 50,000 tonnes of sulphur annually for its ore processing.
On 19 December, Ioneer announced that the project has advanced into the final stage of the federal permitting process, moving closer toward the completion of the National Environmental Policy Act (NEPA) process and approval of the project's Plan of Operations. Ioneer submitted its latest revised plan to the US Bureau of Land Management in July 2022, with no direct impact on the area’s populations of Tiehm's buckwheat.
The Ioneer share price started 2022 at A$0.83 and dropped to A$0.46 in mid-March before rebounding to A$0.78 in early April. The stock dropped to its 52-week low of A$0.32 on 23 June. The share price moved up to A$0.73 in August and then traded between A$0.56 and A$0.68 until early December, when it fell from A$0.62 on 5 December to A$0.38 on 23 December.
Ioneer’s latest quarterly cash flow report for the three months to end of September, released on 24 October, showed that its net cash and cash equivalents fell from US$94.2m to $77m, equating to 5,2 months of financing for its activities. The company has applied for a loan from the US Department of Energy, as political support for developing a domestic US supply chain for battery materials has grown.
According to Ioneer’s annual general meeting presentation in November, it expects to produce annual revenue of $422m and $288m annual earnings before interest, tax, depreciation and amortisation (EBITDA) from the mine.
What is the long-term Ioneer stock forecast?
Ioneer stock forecast: Will the share price rebound or set new lows?
At the time of writing, stock data provider TipRanks had tracked only one Wall Street analyst offering a 12-month Ioneer share price forecast in the last three months, with a price target of A$0.70 and a buy recommendation. That represented an 84.71% increase from the closing price of A$0.38 on 23 December.
According to ASX data provider Market Index, the consensus from brokers that have issued an Ioneer stock forecast was a strong buy, with six analysts issuing buy recommendations, two rating the stock a hold, and no sell ratings.
The Ioneer stock forecast for 2023 from data provider Trading Economics was bearish at the time of writing, predicting the share price could edge down to A$0.34 in one year from A$0.36 at the end of this quarter, based on its global macro model projections and analysts’ expectations.
The Ioneer stock forecast for 2025 from algorithm-based forecaster WalletInvestor showed the share price could take time to return to its previous highs, reaching A$0.869 by the end of the year, from A$0.554 at the end of 2023 and A$0.717 at the end of 2024. The stock could reach new highs in 2027, trading at A$1.15 by the end of the year.
Back in April, Henry Fung, co-founder of MF & Co. Asset Management, wrote in an Ioneer stock forecast research note that by the time the company starts production, “it will likely have buyers lining up for its lithium, and profitability would be a given”.
Are you looking for a Ioneer stock forecast to decide whether to buy the company’s shares? Keep in mind that market volatility can make it difficult for analysts and algorithm-based forecasters to come up with accurate long-term targets. As such, they can and do get their prediction wrong.
We recommend that you always do your own research. Look at the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision. Keep in mind that past performance is no guarantee of future returns. And never invest money you cannot afford to lose.