TIDMBCN
RNS Number : 9035W
Bacanora Minerals Ltd
20 November 2017
Bacanora Minerals LTD / Index: AIM; TSX-V / Epic: BCN / Sector:
Natural Resources
20 November 2017
Bacanora Minerals Ltd ('Bacanora' or the 'Company')
Corporate Update
Bacanora, the London and Canadian listed (AIM: BCN, TSXV: BCN)
lithium exploration and development company, announces that it has
filed a statement of claim with the Court of Queen's Bench
(Alberta) seeking to void ab initio, a 3% gross over-riding royalty
held by the Estate of Colin Orr-Ewing over certain of the Company's
lithium assets in Sonora, Mexico (the "Royalty"). In addition,
ahead of the completion of the Feasibility Study for the Sonora
Lithium Project in Q4 2017 and Bacanora's transition from an
exploration to a development company, the Company announces
amendments to the employment arrangements of certain members of the
executive management team.
The Royalty
The basis of the Company's claim is that the Royalty was
originally granted based on the misrepresentation of Colin
Orr-Ewing that he held a pre-existing royalty granted prior to the
acquisition of the lithium properties by the Company. The Board of
Directors of Bacanora has completed a review of the historical
background and concluded that no such pre-existing royalty existed
and accordingly there was no basis for the grant of the royalty by
the Company. Further updates on the progress of the claim will be
provided to the market as and when it is appropriate to do so.
Executive Employment Arrangements
With the Feasibility Study for the Sonora Lithium Project
nearing completion, Bacanora is set to transition from an
exploration to a development company. To reflect this change, the
Company's independent directors have reviewed the current executive
employment arrangements and agreed to amend the employment and
consultancy arrangements respectively between the Company and each
of Peter Secker, Chief Executive Officer, and Fernan Pty Ltd, which
provides the services of Mark Hohnen, Executive Chairman.
In line with this, Peter Secker has been issued with a new
English law governed service contract. This is on broadly similar
terms to the existing Canadian law governed service contract which
has been terminated, save for changes required to meet English law
and practice requirements and for the following material
changes:
(i) the removal of performance bonus provisions of up to
GBP250,000;
(ii) the removal of a GBP250,000 change of control payment;
(iii) an increase of GBP50,000 in annual salary;
(iv) the inclusion of new pensions arrangements; and
(v) the inclusion of a cash payment representing an acceleration
of unvested options in the event of a change of control of the
Company at an acquisition price of at least 130p per Bacanora
share. Such cash payment will be calculated on the basis of the
difference between the acquisition price per Bacanora share and
102p (being the middle market price of a Bacanora share at close of
business in London on 17 November 2017), multiplied by 2,550,000 in
the event that such change of control is completed prior to the
award of performance based options in relation to the financial
year ended 30 June 2018 and a further 2,550,000 in the event that
such change of control is completed prior to the award of
performance based options in relation to the financial year ended
30 June 2019. In the event the Board has resolved upon Mr Secker's
award in the relevant financial year (which may be zero) then the
right to the relevant payment terminates for that period.
The consultancy agreement with Fernan Pty Ltd has been amended
to provide Mark Hohnen also with a cash payment representing an
acceleration of unvested options in the event of a change of
control of the Company on the same terms as Peter Secker, save that
the multiplier for each relevant financial year is 2,124,150.
The changes to the employment arrangements are considered to be
related party transactions under the AIM Rules for Companies. The
independent directors, having consulted with independent
remuneration consultants and the Company's Nominated Adviser,
consider that the terms of these amended arrangements are fair and
reasonable insofar as the Company's shareholders are concerned.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
**ENDS**
For further information please visit www.bacanoraminerals.com or
contact:
Bacanora Minerals Peter Secker, CEO info@bacanoraminerals.com
Ltd.
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Cairn Financial
Advisers LLP, Sandy Jamieson +44 (0) 20 7213
Nomad / Liam Murray 0880
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Canaccord Genuity, Martin Davison, +44 (0) 20 7523
Broker James Asensio 8000
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St Brides Partners, Frank Buhagiar, +44 (0) 20 7236
Financial PR Adviser Megan Dennison 1177
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ABOUT BACANORA:
Bacanora is a Canadian and London listed lithium exploration and
development company (TSX-V: BC 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 (LCE[1]) and 2.7 million tonnes Inferred[2]. A
Pre-Feasibility Study completed in Q1 2016[3] demonstrated the
economics associated with becoming a 35,000 tpa lithium carbonate
and 50,000 tps 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.
[1] LCE = lithium carbonate (Li(2) CO(3) ) equivalent;
determined by multiplying Li value in percent by 5.324 to get an
equivalent Li(2) CO(3) 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.
[2] See Amended Mineral Resource Estimate for the Sonora
LithiumProject, 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.
[3] 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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