ASX:ION

- Iondrive Ltd

China’s export restrictions on rare earths kick started the whole “US Critical Minerals” macro thematic.

Rare earths are receiving the most US government attention, the most capital from inside the US with the most urgency.

Which is why we think ION’s tech is being focused on the right critical mineral in the right jurisdiction at the right time.

ION, for its rare earth business in the US already has:

• A binding agreement with America's largest e-waste processor (Colt Recycling) to supply feedstock
  
  
• Independent lab tests showing ION's tech recovers rare earths - including heavy rare earths (93.5% dysprosium, 96.5% neodymium, 96.5% praseodymium)
  
• A letter of support for up to ~US$15M from the Oklahoma Department of Commerce for a recycling plant
  
• A first production run underway for 1.4 tonnes of rare earth oxide due within 150 days
  

The 20-July order forces US military contractors to prove "serious efforts" to source critical minerals domestically before they can import them - with a 1 January 2027 deadline on Chinese-origin materials in US defence systems.

(They either show they have tried or risk losing defence contracts)

Then there is the 30-July Presidential Determination that gives the Department of Commerce the power to ban exports of e-waste, black mass and magnets so they get recycled at home.

Two executive orders that will mean more capital going into potential domestic supply sources (like ION) and also more feedstock for a business like ION.

In June the G7 group of nations (basically all the western big dogs) met and made explicit commitments to “boost recycling of critical minerals”. (source)

Specifically calling out urgency around China dominated rare earths supply - rare earths being critical inputs in advanced technologies like AI, robotics and advanced weaponry.

One stated G7 aim was to make recycling capacity account for a “significant share” of annual consumption by 2030. (source)

Remember ION’s binding agreement in the US is with a company inside the Elemental Holding Group which has operations across 20+ countries across four continents.

S&P Global's July 2026 study puts the average time from discovery to production at 16 years - and nearly 30 years for mines not yet operating, with permitting the main culprit. ION's modules bolt onto e-waste facilities that already exist, with US$11.9M of development capital per module - and its first rare earth oxide is due within 150 days. (S&P Global, Jul-2026)

One of ION’s 2,400tpa rare earths “modules” has the following economics:

• ~US$243M post-tax NPV,
• US$62M EBITDA
• US$122M revenue, and
• US$11.9M of development capital

That company (Colt Recycling) ION has a binding agreement with, runs FOUR US e-waste facilities.

AND is part of the Elemental Holding Group which has 50+ licensed scrap/e-waste collection and processing hubs across three continents. (source)

So those modular plants can be plugged into a global network pretty quickly (IF they work) - at US$243M NPV each...

Oklahoma is where the US government just handed out a US$1.6BN funding deal to USA Rare Earth - which includes ~US$50M to expand a magnet manufacturing plant. (source)

USA Rare Earths has in the past explicitly mentioned “third party feedstock” would be used in the ramp up stages of its magnet plants.

Especially for heavy rare earths which are almost impossible to find in the US. (source)

Remember: ION can recover heavy rare earths from e-waste.

We are seeing a lot of capital flow into recycling tech companies - especially in the US for companies able to recover critical minerals.

We have already seen the US government back:

• Jan 2025: the Pentagon put US$5.1M into a recycler pulling rare earths from old electronics. (source)
  
• June 2026: the Department Of Energy put US$134M for heavy rare earth recovery from e-waste and scrap. (source)
  
• The Department Of War made a US$25M strategic investment in ReElement, and handed Energy Fuels a ~US$725M conditional loan for rare earths processing

And private capital get behind the following two deals this year alone:

• Noveon Magnetics (recycled magnets) raise US$215M (Jan 26).
  
• Cyclic Materials (rare earth recycling) raise US$75M (Aug 26)

We think ION is in a position with its US rare earths business to attract this sort of funding.

ION has already shown it can recover:

• Silver from solar panels (95%+ recoveries at bench scale).
  
  
• Battery metals from scrap batteries (black mass) - 89% lithium, 100% nickel, 98.6% cobalt, 98.4% manganese with a pilot plant due for commissioning in Q4-2026, AND
  
  
• Copper, gold and silver from circuit boards.

ION’s underlying Deep Eutectic Solvent tech has also been shown to recover other critical minerals like gallium, antimony and indium (plus many more).

We think that once ION commercialises its tech in one domain, it can expand into other critical minerals.

ION is also using its tech to solve extraction issues that miners have (getting a certain mineral out of a certain type of rock).

ION is currently focused on two markets for mineral processing:

• Cobalt (also a critical mineral where the US is import dependent) - ION signed a binding term sheet with Latitude 66 to apply its technology on concentrates that would be produced from Latitude's project in the EU (Finland). (Source)
  
• Nickel - ION is testing its tech on US sourced feedstock in the nickel industry. (Source)

Processing tech, when it works can be very valuable - like the company ION’s director Hugo Schumann was CFO of (Jetti Resources) which raised US$100M at a US$2.5BN valuation.

We think any success in minerals processing can on its own be a company maker.

Electric vehicle growth is creating millions of tons of end-of-life batteries. +80% of battery recycling occurs in Asia. Europe and the USA are already struggling to acquire critical metals and they want to stop exporting their recyclable batteries (and precious battery metals) back to Asia ASAP.

ION’s recycling tech uses non-toxic, typically biodegradable Deep Eutectic Solvent (DES). Conventional recycling technologies are much more energy and acid intensive. This means ION’s tech has the potential to be cheaper and more environmentally friendly.

ION’s tech has been de-risked in large lab trials with recoveries from pre-treated black mass of 89.1% lithium, 100% nickel, 98.6% cobalt and 98.4% manganese.

The company has published a PFS for a commercial scale 10,000 tonnes per annum plant. ION expects to have a smaller pilot plant operational in 2025 and work towards a commercial scale plant after that.

• Ebbe Dommisse (CEO): Worked as COO of Circa Group when it was a biomass waste recycling startup through to commercialisation. IPO’d on Norway’s stock exchange at a market cap of €194M.
• NEW ADDITION: Lewis Utting (Commercial Director): Former MD of SciDev (wastewater treatment), While Lewis was MD the stock went from 6.5c to $1.
• NEW ADDITION: Hugo Schumann (Non-Executive Director): Former CFO of Jetti Resources copper extraction technology. Hugo delivered the Series C ($50M) and Series D ($160M) rounds for the company which was last valued at $2.5BN in 2022. Jetti was backed by top industry investors like Freeport, BHP, Mitsubishi and Blackrock. Hugo also established the London office of the Apollo Group, a global natural resources VC firm.

We have seen a few big deals for recycling technology companies in the last 12 months:

• Ascend Elements raised US$524M and also secured a $480M grant from the US Department of Energy (September 2023).
• Clyib recently raised €55M in what was the biggest recycling tech deal in the EU. The company had only been operational for 2 years before that deal… (May 2024).
• Descyle also raised €12M with backing from some high profile EU venture funds (November 2024).

Battery metals prices have come off from the 2021-2022 boom years for a number of reasons.

We see this as a counter-cyclical Investment with a relatively cheap entry point as a bet on battery metals prices running again. We expect to see demand for commercially viable recycling technology increase as battery metals prices increase.

The EU has legislated a goal that 15% of critical raw materials consumption comes from recycled content each year. The EU is making moves to classify black mass as a hazardous material in a move to limit China’s ability to import it. This could improve ION’s ability to source feedstock with Europe without being undercut by Chinese competition.

ION has key industry partnerships within the EU including universities and industry groups. This will set the foundation for critical relationships that ION will need to build to (1) secure a reliable supply of feedstock (black mass) for its processing plant and (2) support with off-take agreements.

Post money the company will have a cash balance of ~$9M and an enterprise value of ~$7M. The two biggest holders together own close to 40% of the company. Per the last annual report, more than 66% of the stock was held by top 20 shareholders. The largest shareholders appear to hold for the long term, and have supported past cap raises and the most recent raise. Sticky, large, supportive long term holders are very important for a small stock to succeed.

We have seen creative, clean, green tech solutions in battery metals supply work very well with our best ever Investment Vulcan Energy Resources. VUL is still up by over ~30x from our Initial Entry Price and has been rising over the last few months. The EU likes clean battery tech stories and it seems the market does too.

ION has a strategic partnership with the University of Adelaide. ION will get first look at any new technologies developed under a $5M grant by the Australian Research Council which is overseen by the two professors that developed ION’s current DES recycling technology.

By 2040 the volume of “end of life” battery projects is expected to generate 11M tonnes of black mass every year. This represents $100BN in recoverable value if it is able to be efficiently recycled. This resolves the “feedstock” issue for both ION and Europe to deliver a battery metals industry.