Nov 17 (Reuters) - Australian titanium producer IperionX Ltd IPX.AX "strongly rejected" a critical short seller report by Spruce Point Capital on Monday, with its shares tumbling as much as 24.4% after a trading halt was lifted.

IperionX's shares fell to A$4.24 in early trade, their lowest since July 10, making the stock the biggest decliner on the benchmark S&P/ASX 200 index .AXJO, which was down 0.2%.

IperionX halted trading last Thursday to prepare a response to Spruce Point's 93-page report, which accused the company of overhyping its prospects, questioning its valuation and challenging its project claims.

The short seller flagged the firm's lack of revenue despite touting an A$17 million ($11.11 million) supply deal with Ford Motor Co. F.N and raised concerns over discrepancies in project data and finances. It also cast doubt on management credibility, citing links to Piedmont Lithium, previously targeted by short sellers.

In its rebuttal, IperionX said it stands by its technology and pointed to about $47 million in U.S. government funding to scale titanium production as validation.

Chief Executive Taso Arima said a recent Pentagon contract "underscores the U.S. government's commitment to reshore an all-American titanium supply chain" and reaffirmed plans to ramp up output at its Virginia plant.

IperionX said Spruce Point did not contact its management before publishing the report and had never sought to visit its titanium operations in Virginia.

The company's shares had tripled over 2024, but now face a test of investor confidence following Spruce Point's attack.

In 2022, lithium developer Lake Resources slumped after a short-seller report, while Piedmont Lithium, once led by IperionX's CEO, faced similar allegations last year.

($1 = 1.5307 Australian dollars)

(Reporting by Roushni Nair in Bengaluru; Editing by Rashmi Aich)

((Roushni.Nair@thomsonreuters.com))