ION to produce first 1.4 tonnes of Rare Earth Oxides (the ones for advanced magnets), in North America, within the next 150 days.

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 21,953,727 ION Shares and the company’s staff own 460,000 ION Shares at the time of publishing this article. The Company has been engaged by ION to share our commentary on the progress of our Investment in ION over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

The US exports nearly 33,000 metric tons of electronic waste PER MONTH.

And all the valuable critical minerals inside it.

Wait... isn’t the USA in a mad scramble to secure domestic critical minerals supply?

Late on Friday afternoon, US President Donald Trump said: STOP!

US President Donald Trump signed an Executive Order to restrict the export of e-waste, black mass (old batteries) and old magnets - that contain critical minerals.

SO that the critical minerals inside them can be recycled and extracted INSIDE North America.

(source)

(Most of the Australian market is only really able to react to the Friday news today - most “finance guys” would have been at their long lunches on Friday arvo.)

Recycling critical minerals from USA e-waste, INSIDE North America is what Iondrive (ASX:ION) is doing.

ION already has:

• A binding agreement with America’s largest e-waste processor (Colt Recycling) to supply the e-waste to feed ION’s process. (source)
  
• Independent lab testing showing ION’s tech can recover rare earths (including heavy rare earths) from e-waste.
  
• And a letter of support for up to ~US$15M for a recycling plant from the Oklahoma Department of Commerce.

But this morning, ION announced it isn’t going to wait for its Oklahoma plant to get built before it starts producing rare earths.

ION just announced it has found a third party processing plant it can rent, to apply its patented IONsolv technology right now...

AND has just commissioned its first ~5 tonne production campaign.

Old permanent magnets will be processed using ION technology into mixed rare earth oxide (MREO).

To deliver 1.4 tonnes of mixed rare earths oxide including neodymium, praseodymium and dysprosium - all precursor materials for magnets.

(magnets used to make F-35 fighter jets, Tomahawk missiles and Predator drones)

INSIDE North America, within 150 days.

(source: read the ION announcement here)

ION says this 1.4 tonne production run will be used for product qualification with “potential customers” - defence contractors? refiners? who knows.

And... form the basis for ION to build its first commercial module, a 2,000 tonne per annum plant in Oklahoma - with potential customers already having qualified the product from ION’s early production run.

Just as Donald Trump recently told USA companies to start making magnets as fast as they can...

“I'll show you how to make money... make magnets”:

(source)

Today, ION said that its target was to produce a 1.4 tonne batch of Mixed Rare Earth Oxides next quarter.

Almost like ION is sending a direct response back to Trump’s last few Executive Orders...

14 days ago, Trump signed an Executive Order forcing US military suppliers to prove "serious efforts" to source critical minerals domestically before they are allowed to import them.

(and so that they don’t have their defence contracts ripped up)

(Read the full Executive Order here)

Putting all of the Executive Orders (and random ramblings in press conferences) together - the US government wants to see:

US military contractors buying US sourced (including from e-waste and old scrap), US made critical minerals...

So any company that can offer that solution (like ION) will be on the watchlists of defence contractors not wanting to risk their lucrative defence contracts.

And for some reason, we can’t shake the feeling that this US critical minerals macro thematic won’t end before we see what we saw in the battery metals bull run...

(Offtake and equity deals from the downstream guys)

For battery minerals it was Stellantis, Tesla, Volkswagen (the carmakers).

For US critical minerals we have a feeling it's going to be the defence contractors - RTX, Lockheed Martin, L3Harris, Boeing etc etc.

Anyone who knows the Sunrise Energy Metals story will know what we mean - that company signed an option deal with Lockheed Martin in October 2025 to supply scandium from its project in NSW and the stock is up ~71x in the last 18 months:

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

Yes, this is a completely different type of project and commodity - but you get the point.

And as we noted above, ION’s announcement today said that some of the MREO produced would be used to “support multiple downstream qualification and refining programs with potential customers”...

(so it could actually end up in the hands of some defence contractors)

(source)

And that the production run would form the basis for a proposed 2,000 tonne per annum commercial module that ION is planning in Oklahoma.

In the same state as USA Rare Earth which will receive up to US$1.6BN including ~US$50M to expand a magnet manufacturing plant. (source)

(source)

The same USA Rare Earth that has explicitly said “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.

(so that product qualification samples could end up in USA Rare Earth’s hands too)

We think the production run in Q4-2026 could be a big catalyst for unlocking big funding deals.

(no guarantee of course)

If USA Rare Earth (or maybe a defence contractor) is going to source Mixed Rare Earths including heavies - ION might just be a viable partner.

Especially considering how much quicker ION’s tech could deliver critical minerals relative to building a mine from scratch.

That's why, we think ION could be one of the dark horses on the ASX that gets to actual US rare earths production first.

(and a potential big US based funding deal)

Why we think ION is a chance for non-dilutive funding

ION already has:

• A Binding agreement with America’s largest e-waste processors (Colt Recycling), signed back in September 2025. (source)
  
• Independent Lab Testing showing its tech can recover rare earths (including heavy rare earths)
  
• A letter of support for up to ~US$15M from the Oklahoma Department of Commerce.
  
• And financial modelling for a roll-out of small, modular rare earth recycling facilities that can be shown to financiers...

Based on economic studies, ION’s small modular plants are capable of producing ~115 tonnes per year of mixed rare earth oxides over a 10-year life with the following economics:

• Post-tax NPV of ~US$7M
• IRR of 46%
• Payback in 2.6 years
• CAPEX of just ~US$4.6M

Those numbers were BEFORE ION 3x’ed its recovery rates AND was able to recover heavy rare earths - so surely the economics would look a lot stronger now. (source)

(Heavy rare earths prices are trading at ~5x China prices - so we think that is a big change to the economics of any plant ION can get up and running). (source)

ION did say it would re-run the numbers on those plants in a Pre-Feasibility Study (PFS).

(source)

Going back to that agreement with Colt Recycling.

Colt processes ~40 million lbs of e-waste a year in the US, is a member of the US Defense Industrial Base Consortium, and is part of the Elemental Holding Group, which operates in 20+ countries across four continents.

So ION could technically roll out its tech across Colt's US recycling network - using Colt's feedstock as inputs for its plants.

(and then maybe across the bigger group's network around the world too)

(source)

ION could, by the end of this year, show the government + downstream partners it has a well thought out plan to scale up production AND proof that its tech works and can produce an at spec product.

(No guarantees of course, ION is still an early stage small cap company with risks involved - see the end of this note for a complete set of risks.)

At a time when funding deals are being announced with companies playing in the same space as ION:

• In Jan 2025, the Pentagon put US$5.1M into a recycling company that can produce heavy rare earths (dysprosium and terbium) out of old electronics for defence magnets. (source)
  
• Two months ago the Department of Energy put up US$134M for heavy rare earth recovery from e-waste and industrial scrap. (source)
  
• Three weeks ago, the Department of War made a US$25M strategic investment in a critical minerals refiner in Indiana.
  
• And recently the US Department of War handed Energy Fuels a ~US$725M conditional loan to scale domestic processing of rare earths:

(source)

A couple of weekends ago we wrote about the International Energy Agency's (IEA) Global Critical Minerals Outlook (check out our weekender here)

In that report, the IEA explicitly mentioned the West had made progress on mining rare earths BUT refining, processing and recycling was where the gap was.

The IEA also hammered home the point that:

Targeted policy (government policy) + investment support (government or downstream funding) = worked (brought on supply).

(source - direct link to the report)

We think the last few Executive Orders from Trump is doing exactly what the IEA describes:

Using targeted policy to mobilise capital into the rare earths recycling/processing space.

Now we wait to see if any of that funding comes ION’s way.

ION also has the “minerals processing” X factor

Another reason we think ION could attract financing support is because it's also applying its tech to minerals processing at mine sites.

(so finance support to commercialise its tech could have benefits beyond just recycling)

ION is 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)

(source - ION investor presentation)

That IEA report we keep mentioning is also pretty bullish processing tech.

The report highlighted how critical minerals refining in the West had operating costs ~50% higher than China. (source)

Which makes tech like ION’s that could be lower cost and less energy intensive interesting...

No wonder the US Department of War set aside ~US$1BN in funding for demo/commercial plants "processing, recycling, or manufacturing critical materials".

Mineral processing technology can also be very valuable.

First because it can make projects that were not economically viable work from a financing perspective, and second, because the target market is essentially any mining/processing company in the world.

If a producer is able to get a better "recovery rate" it could mean millions of dollars of extra revenue generated (all from a process it's already doing - mining).

For context - one of ION's directors Hugo Schumann is the former CFO of Jetti Resources, which developed copper extraction tech.

Jetti went on to raise Series C funding of US$50M and then Series D funding of US$100M which valued the company at US$2.5BN in 2022.

Jetti was backed by top industry investors like Freeport, BHP, Mitsubishi and Blackrock.

(source)

(And ION's NEW CEO Dr Grant Caffery - who literally started two days ago ran innovation at BHP - the world's biggest miner.)

(source)

ION's tech also works on other critical minerals

As mentioned earlier ION’s tech can be applied to recover just about any critical mineral...

Note: the above chart shows metals amenable to Deep Eutectic Solvent chemistry in general, and have not necessarily been specifically tested by ION.

Outside of the rare earths program in the US - ION also has active programs across:

• Recovering silver and silicon from solar panels - initial bench scale testing achieved over 85% silver recoveries. The next step is looking to recover the silicon.
  
• A pilot plant currently being built - recovering nickel, lithium, cobalt and graphite from waste batteries (more on this later in today’s note).

The way we see it, ION only has to be successful in one mineral, in one industry (processing or recycling), for the company to achieve our Big Bet which is as follows:

Our ION Big Bet

“ION re-rates to a +$150M market cap on successful large-scale production of commercial quantities of battery materials through its recycling process and/or by securing important partnerships in the recycling industry.”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including technology risk, scale up risk, regulatory risk and development risk - just some of which we list in our ION Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

What's next for ION?

Below are the key catalysts we want to see ION deliver:

🔄 US rare earths (where ION has the most momentum right now)

ION has a binding agreement with Colt Recycling (one of the largest e-waste processors in the US) to potentially roll out its modular recycling technology across Colt's facilities.

ION's shown it can recover rare earths from Colt's feedstock.

And now it's got support from the Oklahoma state government for a recycling facility in the state.

Next we want to see ION produce the 1.4 tonnes of Mixed Rare Earth Oxides and get its product qualified with potential buyers.

At the same time we want to see ION progress Front End Engineering Design (FEED) and move toward FID for its facility.

(source)

🔄 Pilot Plant currently being built (nickel, lithium, cobalt and graphite from waste batteries)

Separate from the proposed US facility, ION is also building a pilot plant right now for its battery recycling tech.

We think this will be a big inflection point for ION, because it takes ION's tech out of the lab and into a pilot plant.

ION recently redesigned the plant as a flexible, skid-mounted system - so the same plant can process multiple recycling feedstocks (not just black mass).

The plant is being funded largely by a ~A$3.9M non-dilutive grant from the Australian government. (source)

Wet commissioning is targeted for Q4 2026 (that's when liquids run through the plant for the first time) - only a few months away now. (source)

🔄 ION's mineral processing tech gets de-risked

Any news across the multiple mineral processing testworks ION is doing right now could trigger a re-rate in ION's share price - especially if it's in a material that the market is looking for exposure to.

As mentioned earlier ION is testing its tech on cobalt and nickel to begin with.

🔄 Application into new markets

ION is aiming to recover copper, gold, silver and rare earth elements from e-waste (Printed Circuit Boards).

Results from these tests could come at arbitrary times.

What could go wrong?

The main risk in focus for us right now is "Commercial / scale-up risk".

Everything ION has demonstrated so far has been at bench and lab scale - albeit independently verified, on real commercial feedstock.

The step from a controlled lab environment to a continuously operating plant is where recycling and processing technologies historically stumble.

Throughput bottlenecks, solvent recycle performance, feedstock variability and impurity build-up only reveal themselves in continuous operation.

ION now has that risk across two workstreams:

1. At its Australian pilot plant (commissioning expected in Q4 2026), and
   
2. At the proposed Oklahoma facility, which still needs to pass through PFS, FEED and a Final Investment Decision before anything gets built.

There is also no guarantee the strong single-pass recovery numbers translate into the same overall recoveries once full mass-balance accounting is done - and the improved economics everyone is waiting for remain subject to the PFS.

And even IF the tech scales perfectly, commercial success still depends on partners like Colt committing to a revenue-generating rollout - which they haven't yet.

Scale up / technology risk

There is no guarantee that the Pilot Plant is able to replicate the results from the large lab study. Also "feedstock reliability" both in terms of supply and consistency of material is a big risk for ION to scale up its operations.

Source: "What could go wrong" - ION Investment Memo 03 December 2024

We list more risks to our ION Investment in our ION Investment Memo here.

Other risks

Like any early-stage minerals technology company, ION carries significant risk, here we aim to identify a few more risks.

The company is currently working toward securing various US government grants and state incentives, but these processes are highly competitive and discretionary, and there is no guarantee that ION will be successful in receiving this funding.

The Oklahoma support remains a letter of support - the composition and value of any final package is subject to definitive documentation.

Friday's Executive Order also cuts both ways: while it supports the domestic recycling thesis, the scope, timing and enforcement of export restrictions remain uncertain - policy can change quickly, and a future softening of restrictions could reduce the urgency driving capital into the sector.

If grant funding does not materialise, the company may need to raise additional capital from the market to fund its pilot plant, the proposed US facility and ongoing R&D, which could result in shareholder dilution.

Finally, ION's economic model relies on the market price of the minerals it recovers; a significant sustained drop in rare earth or battery metal prices could make recycling less attractive compared to traditional mining.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our ION Investment Memo

Our Investment Memo provides a short, high-level summary of our reasons for Investing.

We use this memo to track the progress of all our Investments over time.

Click here to read our ION Investment Memo where you will find:

• What does ION do?
• The macro theme for ION
• Our ION Big Bet
• What we want to see ION achieve
• Why we are Invested in ION
• The key risks to our Investment Thesis
• Our Investment Plan