TIDMBCN
RNS Number : 4384Z
Bacanora Minerals Ltd
15 December 2017
NOT FOR DISTRIBUTION TO U.S. NEWSWIRES OR DISSEMINATION IN THE
UNITED STATES
Bacanora Minerals Ltd ("Bacanora" or the "Company")
Strategic Cornerstone Investor & Offtake Agreement
Highlights
-- New Institutional Investor agrees to acquire 19.89% interest in Bacanora
-- Follows highly favourable Feasibility Study which estimated a NPV8 of US$1.253 Billion
-- Provides entry into key Chinese market
Bacanora Minerals Ltd., the London and Canadian listed lithium
company, is pleased to announce that NextView Capital ('NextView'),
a leading Chinese institutional fund management group focused on
new technologies and energy, has agreed to acquire a 19.89% equity
interest (non-diluted) in Bacanora ('the Strategic Investment') via
the placement of 32,976,635 common shares in the Company (the
"Placing") at a price of 94.53 pence (approximately C$1.6223) per
share ("the Placing Price"). The GBP31,172,813 (approximately
C$53,498,000) capital raised by the Placing will be used for the
continued development of the Company's Sonora Lithium Project. The
Placing Price represents the volume weighted average price of the
Company's shares on the AIM Market of the London Stock Exchange
over the previous seven trading days. The actual number of shares
to be issued may be adjusted upwards at closing (to keep the total
equity interest at 19.89%) in order to reflect any securities
issuances (in particular, potential option exercises) occurring in
the interim. Ashanti Capital acted as lead broker for the
Placing.
In addition, Bacanora has agreed to supply NextView with
5,000tpa of lithium carbonate produced at its Sonora Project in
Mexico ('Sonora' or 'the Project') on a best endeavours basis at
market prices from its Stage 1 of production, with a firm
commitment to supply 8,000tpa of lithium carbonate during Stage 2
and a best endeavours promise to supply a further 7,000tpa during
Stage 2. NextView has also agreed to employ its reasonable
endeavours to assist the Company in procuring project debt
financing for Sonora. The Company believes that these commitments,
along with the Strategic Investment, represent further validation
of the quality of Sonora's battery grade (+99.5%) lithium carbonate
product and Bacanora's production process. NextView will (following
closing) be entitled to present a nominee for appointment to the
board of directors of Bacanora and subsequent election by
shareholders and NextView has indicated that it will nominate its
President, Mr. Yaping He, to be appointed as a Non-Executive
Director of the Company, subject to the completion of the relevant
due diligence process, including standard regulatory background
checks and approvals by AIM and TSX Venture Exchange. Further
profile information for Mr. He will be provided in a subsequent
news release prior to his appointment taking effect.
The Strategic Investment and offtake agreement follows the
completion of a Feasibility Study ('FS') at Sonora which confirmed
the positive economics and favourable operating costs of a 35,000
tonnes per annum ('tpa') battery grade Li(2) CO(3) operation at
Sonora: estimated pre-tax project Net Present Value ('NPV') of
US$1.253 Billion, an Internal Rate of Return ('IRR') of 26.2%, and
Life of Mine ('LOM') operating costs of US$3,910/t of lithium
carbonate ('Li(2) CO(3) ') (see announcement 13 December 2017).
NextView becomes the latest institutional cornerstone investor
in Bacanora and further strengthens the Company's funding platform
for the commencement of the construction of mining and large-scale
processing facilities at Sonora in H1 2018. This platform already
includes cornerstone investor Hanwa Co., LTD. ('Hanwa'), a leading
Japan-based global trading company and one of the larger traders of
battery chemicals in the Asian region. The Company believes that
the addition of NextView with its extensive network of associated
groups across China opens up the Chinese investment market for
Bacanora. Together with the Company's established relationship with
Hanwa, Bacanora now has key partners in place for the major Chinese
and Japanese markets.
In view of the size of the opportunity provided by the Chinese
and Japanese markets for lithium, the Company intends to commence a
review of the parameters of its planned two stage operation at
Sonora with a view to increasing Stage 1 from 17,500tpa.
Further details regarding the completion of the Strategic
Investment will be provided in due course but it is anticipated
that it will close in January 2018, subject to regulatory
approval.
Peter Secker, CEO of Bacanora, commented, "NextView's investment
and offtake agreement underlines both the quality of our asset and
the progress we have made to date. The recently completed FS shows
why Sonora has and continues to attract such strong institutional
interest: US$1.253 Billion pre-tax project NPV; 26.2% IRR; and LOM
operating costs of US$3,910/t of lithium carbonate. Together with
highly favourable demand/supply dynamics for lithium carbonate
driven by fast growing end markets such as electric vehicles and
energy storage, the investment case for Bacanora is clear.
"Having completed the FS, secured an offtake agreement with
leading trading house Hanwa, who are also a major shareholder in
the Company, a shareholder register dominated by blue chip
institutions and with all relevant approvals in place, we have an
excellent funding platform with which to move to the construction
phase at Sonora in H1 2018. With an estimated construction period
of 24 months, Sonora remains on track to become the next major
world class lithium carbonate producer and I look forward to
providing further updates on our progress."
Mr. Yaping He, Managing Partner and President of NextView,
commented, "Through this investment, NextView Capital intends to
build a long-term strategic partnership with Bacanora to capitalise
on the expanding lithium battery raw materials market which has
significant potential given the electric vehicle industry in China,
the largest new energy vehicles market in the world. NextView
Capital believes that Bacanora has a central role to play in the
field of new energy upstream lithium resources and that NextView is
ideally placed to assist it in achieving its growth potential."
About NextView
NextView Capital ("NextView") is an active investment fund based
in Beijing and Shanghai, China. NextView Capital has available
resources of c.RMB 30 billion and invests primarily in new energy,
mineral resources, TMT, sports and consumption sectors. NextView's
recent investments include a shareholding in Nanjing Yuebo Auto
Electronics Co., Ltd., a leader in the field of electric vehicle
systems in China.
NextView's strategic aim is to become a long-term strategic
partner of listed companies by investing in them and assisting in
the realisation of their long-term investment value.
Earlier this year, NextView together with Tibet Summit Resources
Co., Ltd. (a company listed on the Shanghai Stock Exchange)
launched a USD 1.5 billion fund focused on investments in the new
energy and resources sectors (the "Fund"). The Fund has recently
acquired a Canadian listed company with a South American lithium
salt lake project. Limited partners of the Fund comprise a number
of large Asian institutions including China Huarong Asset
Management Co., Ltd. (China Huarong, ) one of the largest financial
asset management companies in China in terms of total assets.
**S**
For further information, please contact:
Bacanora Minerals Peter Secker, CEO info@bacanoraminerals.com
Ltd.
--------------------- ----------------------- ---------------------------
Cairn Financial
Advisers LLP, Sandy Jamieson / +44 (0) 20
Nomad Liam Murray 7213 0880
--------------------- ----------------------- ---------------------------
Ashanti Capital,
Lead Broker for +61 484 761
the Placing Rob Hamilton 263
--------------------- ----------------------- ---------------------------
Canaccord Genuity, Martin Davison / +44 (0) 20
Retained Broker James Asensio 7523 8000
--------------------- ----------------------- ---------------------------
St Brides Partners,
Financial PR Hugo de Salis / Frank +44 (0) 20
Adviser Buhagiar 7236 1177
--------------------- ----------------------- ---------------------------
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 Projecti, 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 a Measured plus Indicated
Mineral Resource estimate of over 5 Mt (comprising 1.9Mt of
Measured Resources and 3.1Mt of Indicated Resources) of LCEii and
an additional Inferred Mineral Resource of 3.7 Mt of LCE. The
Feasibility Study discussed herein has established Proven Mineral
Reserves (in accordance with National Instrument 43-101 - Standards
of Disclosure for Mineral Projects ('NI 43-101')) of 1.67 MT and
Probable Mineral Reserves of 2.85 Mt LCE and confirmed 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.
Cautionary Statement Regarding Forward-Looking Information
Except for statements of historical fact, this news release
contains certain "forward-looking information" within the meaning
of applicable securities law. Forward-looking information is
frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other
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: the
completion of the aforementioned financing and the anticipated
timing thereof; appointment of a new director; future plant
construction and production information; as well as estimated
operating costs, estimated IRR and NPV. Although we believe that
the expectations reflected in the forward-looking information are
reasonable, there can be no assurance that such expectations will
prove to be correct. We cannot guarantee future results,
performance or achievements. Consequently, there is no
representation that the actual results achieved will be the same,
in whole or in part, as those set out in the forward-looking
information.
Forward-looking information is based on the opinions and
estimates of management at the date the statements are made, and
are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those anticipated in the forward-looking
information. Some of the risks and other factors that could cause
the results to differ materially from those expressed in the
forward-looking information include, but are not limited to:
commodity price volatility; general economic conditions in Canada,
the United States, Mexico and globally; industry conditions,
governmental regulation, including environmental regulation;
unanticipated operating events or performance; failure to obtain
industry partner and other third party consents and approvals, if
and when required; the availability of capital on acceptable terms;
the need to obtain required approvals from regulatory authorities;
stock market volatility; competition for, among other things,
capital, skilled personnel and supplies; changes in tax laws; and
the other risk factors disclosed under our profile on SEDAR at
www.sedar.com. Readers are cautioned that this list of risk factors
should not be construed as exhaustive.
The forward-looking information contained in this news release
is expressly qualified by this cautionary statement. We undertake
no duty to update any of the forward-looking information to conform
such information to actual results or to changes in our
expectations except as otherwise required by applicable securities
legislation. Readers are cautioned not to place undue reliance on
forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
i The Sonora Lithium Project is comprised of the following
lithium properties: La Ventana lithium concession, which is 100
percent owned by Bacanora and El Sauz and Fleur concessions, which
are held by Mexilit S.A. de C.V. ('Mexilit') which is owned 70
percent by Bacanora and 30 percent by Cadence Minerals Plc.
ii 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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