TSX-V/AIM Symbol:
BCN
CALGARY, Aug. 23, 2017 /CNW/ - BACANORA MINERALS
LTD. ("Bacanora" or the "Company") (TSX-V: BCN and AIM: BCN),
the Canadian and London listed
lithium exploration and development company, is pleased to provide
an update on its flagship Sonora Project ("Sonora") in Mexico, one of the world's larger lithium
resources, where the Feasibility Study ("FS") for a 35,000 tpa
lithium carbonate ("Li2CO3") operation is
scheduled for completion in late 2017.
Li2CO3 is a key component of battery
technology used in rapidly-growing industries such as electric
vehicles and energy storage. Bacanora is focused on its
continuing objective of becoming a significant large-scale supplier
to these emerging industries and is targeting first production at
Sonora in 2019/2020.
Sonora Lithium Project Update
The FS is focused on a
two-phase open-pit mine and lithium carbonate processing facility
with a life of over 20 years:
- Phase 1: 17,500 tonnes per year of battery-grade
Li2CO3, for the first 2 years
- Phase 2: Expansion to 35,000 tonnes
Li2CO3 per year
Operating and capital cost work for the FS is nearing
completion. Operating costs ("OPEX") and capital costs
("CAPEX") estimates for the Phase 1 17,500 tpa operation are being
updated from those previously developed in the Sonora Project
Pre-Feasibility Study (PFS) of April 2016. As a soft rock
deposit, operating costs at Sonora
are anticipated to be lower than typical hard rock deposits due to
the lack of a need for the lithium ore to be drilled, blasted,
crushed and ground prior to processing. While Sonora's OPEX
is expected to be higher than brine deposits in Chile, the length of time required to produce
Li2CO3 should be considerably
shorter.
Flow sheet work is being finalised with the focus being on
optimising Li2CO3 production at Sonora.
With this in mind, a sodium sulphate (Na2SO4)
roast, utilising sodium sulphate produced from one of the Sonora
Project process re-cycle streams, has been developed in preference
to the more expensive gypsum (Ca2SO4) roast
previously contemplated. The flow sheet is currently being
subjected to metallurgical variability and locked-cycle testwork in
Australia. Ausenco Engineers is currently undertaking final
plant layout, capital equipment tenders and flow sheet optimisation
work. In addition, mechanical and metallurgical optimisations
of the Hermosillo pilot plant are
currently being undertaken as a result of the past 12 months
operating improvements and advances to continue to improve flow
sheet ergonomics and operations.
In tandem with this, IMC Mining Consultants in Tucson is continuing mine plan optimisation
and equipment selection for the open pit mining operation.
Local infrastructure at Sonora,
consumable chemicals and final design for heavy vehicle access to
the site continue to be a focus. In addition, one of the
previous schedule priorities for provision of energy has been
resolved with five independent proposals being received from local
energy and pipeline groups for supplying energy to Sonora.
These include both gas and electrical energy supplies.
Ahead of the completion of the FS, Hanwa Co., LTD. ("Hanwa"),
the Company's strategic partner, continues to facilitate
discussions in Japan with regards
to securing long-term project debt funding to contribute to the
construction capital. Preliminary discussions have also commenced
with additional debt providers for more traditional project
financing packages. The pricing environment for lithium
carbonate has continued to strengthen with Seeking Alpha indicating
April 2017 lithium carbonate contract
prices in the order of US$14-15,500/t1. Hanwa is a leading
Japan-based global trading company
and one of the larger traders of battery chemicals in the Asian
region.
Bacanora CEO Peter Secker said,
"The FS at Sonora is scheduled for
completion by the end of the year. In anticipation of this
and assisted by our strategic partner Hanwa, discussions are
already underway with long term debt providers with regards to
funding the construction of what we believe will be a world class
lithium operation in Sonora. This is to allow us to commence
the estimated 18 month build programme, subject to final Board
approval, as we look to capitalise on the anticipated need for new
battery grade supplies of lithium carbonate to come on stream to
satisfy an expected step-up in demand from fast growing industries,
such as electric vehicles and energy storage."
_____________________________
1 See
www.seekingalpha.com/article/4083894-lithium-miner-news-month-june-2017
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Zinnwald Lithium Project Update
The
Feasibility Study to develop a strategy of producing downstream,
higher value lithium products for the European battery and
automotive sectors at the Zinnwald Lithium Project in Germany continues. Approvals for mining a
large bulk ore sample for metallurgical testwork have been obtained
and this work will commence in the next few weeks. Final
scheduling of an infill drilling programme is underway and this
programme is scheduled to commence in Q4 2017. Initial laboratory
testwork has demonstrated that higher value lithium products can be
produced from the Zinnwald concentrates and this testwork programme
will be expanded to establishing pilot scale flowsheet testwork at
external laboratories, using the material available from the bulk
metallurgical ore sample.
In April 2017, Bacanora's 50%
partner in Zinnwald, SolarWorld AG ("SolarWorld"), announced its
intention to file for bankruptcy protection in Germany due to ongoing pricing pressures in
its core solar markets. Under the terms of the agreement
signed with SolarWorld in February
2017, Bacanora acquired a 50% interest in, and joint
operational control of Zinnwald in exchange for a cash
consideration of EUR5 million and an
undertaking to spend EUR5 million
towards the cost of completing the FS. The agreement also
included an option for Bacanora to acquire the outstanding 50% held
by SolarWorld within a 24 month period for EUR30 million. The Company is confident
that the SolarWorld insolvency process will have no material impact
on the Company's interest.
Other Lithium Market Developments
In addition to the
continuing development of its own projects, Bacanora also takes
note of other significant developments within the lithium industry
that have the potential to have a positive impact on Bacanora's
projects and future operations, including the following:
- Volkswagen stating that 25% of their vehicle sales by 2025 will
comprise electric vehicles, requiring in the order of 200GW of
energy, equivalent to 30 Nevada size giga
factories.2
- Volvo announcing that it will move to total electric vehicle
production by 2019.3
- The launch of the Tesla Model 3.4
- France and the UK stating that
all vehicles will be zero emission by 2040.5
- Lyft, a ride sharing company in the USA, stating that it expects to be providing 1
billion automated electric vehicle car rides per year by
2025.6
- In China, domestic automakers
only have 43 percent of market share in the world's largest auto
market, but they have a 96 percent stranglehold on the EV market
and it has been estimated that 49 of 103 new EV launches by 2020
will come out of China. In
addition, it has also been reported that China is targeting to have 65 percent of the
world's manufacturing capacity for lithium-ion batteries by
2021.7
_________________________
2 See
http://europe.autonews.com/article/20170710/COPY/307149996/industry-needs-40-gigafactories-vw-says
3 See
www.theguardian.com/business/2017/jul/05/volvo-cars-electric-hybrid-2019
4 See www.tesla.com
5 See
http://www.telegraph.co.uk/news/2017/07/06/france-ban-petrol-diesel-vehicles-2040
6 See
www.sierraclub.org/compass/2017/07/lyft-will-provide-1-billion-automated-electric-car-rides-year-2025
7 See
www.motortrend.com/news/future-electric-autonomous-vehicles-coming-us-like-freight-train
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ABOUT BACANORA:
Bacanora is a Canadian and London listed lithium exploration and
development company (TSX-V: BCN and AIM: BCN). The Company is
exploring for, and developing a pipeline of international lithium
projects, with a primary focus on the Sonora Lithium Project. The
Company's operations are based in Hermosillo in northern Mexico. The
Company is led by a team with lithium expertise and proven mine
development, construction and operations experience.
The Sonora Lithium Project, which consists of ten mining
concession areas covering approximately 100 thousand hectares in
the northeast of Sonora State. The Company, through drilling and
exploration work to date, has established an Indicated Mineral
Resource (in accordance with National Instrument 43-101 –
Standards of Disclosure for Mineral Projects.
("NI-43-101")) of 4.5 million tonnes (LCE8) and 2.7
million tonnes Inferred.9 A Pre-Feasibility Study
completed in Q1 201610 established Probable Mineral
Reserve (in accordance with NI 43-101) of 2.1 million tonnes LCE
and demonstrated the economics associated with becoming a 35,000
tpa lithium carbonate and 50,000 tpa SOP producer in Mexico.
In addition to the Sonora Lithium Project, the Company also has
a 50% interest in the Zinnwald Lithium Project in southern Saxony,
Germany. The Zinnwald Lithium Project is located in a granite
hosted Sn/W/Li belt that has been mined historically for tin,
tungsten and lithium at different times over the past 300 years.
The strategic location of the Zinnwald Lithium Project allows
immediate access to the German automotive and downstream lithium
chemical industries.
_______________________
8 LCE = lithium carbonate (Li2CO3)
equivalent; determined by multiplying Li value in percent by 5.324
to get an equivalent Li2CO3 value in per
cent. Use of LCE is to provide data comparable with industry
reports and assumes complete conversion of lithium in clays with no
recovery or process losses.
9 See Amended Mineral Resource Estimate for
the Sonora Lithium Project, Mexico, April 2016. The lead
author of the amended report is Mr. Martin Pittuck (MSc., C.Eng.,
FGS, MIMMM) of SRK Consulting (UK) Limited ("SRK"). A copy of this
report is available under Bacanora's corporate profile at
www.sedar.com.
10 See Technical Report on the Pre-Feasibility Study
for the Sonora Lithium Project, Mexico, 15 April 2016. The
authors of the PFS are Ausenco Limited, SRK and Independent Mining
Consultants Inc. A copy of this report is available under
Bacanora's corporate profile at www.sedar.com.
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Reader
Advisory
Except for statements of historical fact, this news release
contains certain "forward-looking information" within the meaning
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similar words, or statements that certain events or conditions
"may" or "will" occur. In particular, forward-looking
information in this press release includes, but is not limited to
future production targets, completion of the Feasibility Study,
finalisation of the flow sheet, potential cost projections, timing
of plant construction, estimated first production dates, potential
debt financing alternatives and other industry estimates and
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reflected in the forward-looking information are reasonable, there
can be no assurance that such expectations will prove to be
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SOURCE Bacanora Minerals Ltd.