TIDMBCN
RNS Number : 0223K
Bacanora Lithium PLC
06 April 2018
Bacanora Lithium plc
("Bacanora Lithium" or the "Company")
Sonora Project Update
Bacanora Lithium plc (AIM: BCN), the London listed lithium
company, is pleased to provide an update on activities at its
flagship Sonora Lithium Project in Mexico ('Sonora' or 'the
Project'). This update is in line with the Company's objective to
commence the construction of a 35,000 tpa lithium carbonate
operation at Sonora in H1 2018, targeting first production in Q1
2020. A recently completed Feasibility Study ('FS') demonstrated
Sonora's potential to become a leading supplier of high value
lithium products to fast-growing industries, such as electric
vehicles and energy storage. The FS demonstrated strong economics
of US$1.25billion NPV; 26.1% IRR; and life of mine gross operating
costs of US$3,910/t Li(2) CO(3) , which are comparable to those of
the low cost brine producers of South America.
Front End Engineering Design (FEED) and EPC/EPCM Engineering
Design of both the roaster/kiln FEED and the
crystalliser/evaporation/IX FEED has commenced following the
delivery of bulk lithium samples from Sonora to selected vendors.
These two equipment packages are expected to comprise approximately
75% of the total capital cost of the processing plant.
Bacanora is in detailed contract discussions with EPC/EPCM
engineering groups for all other parts of the processing plant in
order to finalise the project cost and to complete budget and
timetables in conjunction with completion of the FEED engineering
packages.
The current FEED schedule is to have designs, cost estimates and
process guarantee scopes completed in Q2 2018 with orders for long
lead items being placed at the end of the FEED process. The current
timetable is based on commissioning and lithium carbonate
production commencing in Q1 2020 and will be updated at the end of
the FEED process.
Project Approvals: Water Licences
Water licence permits covering the Sonora Lithium Project have
been granted by the Comisión Nacional Del Agua ('CONAGUA'). This
follows the granting of the 'Manifestacion de Impacto Ambiental'
('MIA') environmental permits and the completion of the land
acquisition agreements for the purchase of the surface land over
the Sonora project area in Q4 2017.
Energy
It is currently envisaged that LNG gas supplies will be
initially utilised at Sonora during the early stages of
commissioning whilst gas consumption is low. Once energy
consumption reaches steady state, pipeline supply to the Project
will be initiated. The Company is in detailed discussions with a
number of potential Build, Own and Operate (BOO) energy partners
for the gas pipeline development to the Project along with the
finalisation of the proposed natural gas pipeline routes. Detailed
quotes for the supply of LNG are also currently being
evaluated.
NextView
As previously announced, the Company entered into a binding
placing letter (the "Placing Letter") with NextView New Energy Bull
HongKong Limited ("NextView") in December 2017 and as announced on
28 February 2018, although the Company had fulfilled all of its
obligations in respect of the Placing as of that time, NextView
failed to forward the Placing proceeds to the Company, leaving it
in default under the terms of the Placing Letter.
In spite of repeated efforts on the part of the Company
requesting that NextView remedy its continuing default, NextView
has continued to fail to complete the Placing as contemplated under
the Placing Letter. Accordingly, the Company has terminated the
Placing Letter and has reserved its rights to pursue any available
legal remedies against NextView.
Financing
The Feasibility Study estimated the capital cost for the Stage 1
production of 17,500tpa of lithium carbonate at Sonora at US$420M.
The Company continues to finalise its debt and equity financing
strategy with Canaccord and its other financial advisors.
Bacanora CEO Peter Secker said: "The Feasibility Study in
December 2017 confirmed Sonora's credentials to become a world
class, low cost producer of battery grade lithium carbonate, and we
are focused on realising this potential at the earliest
opportunity. With this in mind, work streams covering FEED,
infrastructure, permitting and financing are all progressing
concurrently and on schedule so that we remain on course to embark
on the construction phase at Sonora in H1 2018. Allowing for an 18
month build out period, this is expected to enable the production
of high value lithium products to commence in Q1 2020, which we
believe positions Sonora as the next world class lithium mine
supplying fast growing markets, such as electric vehicles and
energy storage."
**S**
For further information, please contact:
Bacanora Lithium Peter Secker, CEO info@bacanoraminerals.com
plc
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Cairn Financial Sandy Jamieson +44 (0) 20
Advisers LLP, Nomad / Liam Murray 7213 0880
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Canaccord Genuity, Martin Davison +44 (0) 20
Broker / James Asensio 7523 8000
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St Brides Partners, Megan Dennison +44 (0) 20
Financial PR Adviser / Frank Buhagiar 7236 1177
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ABOUT BACANORA LITHIUM:
Bacanora Lithium is a London listed lithium exploration and
development company (AIM: BCN). The Company is exploring for, and
developing a pipeline of international lithium projects, with a
primary focus on its 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(1) , 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 LCE(2) and
an additional Inferred Mineral Resource of 3.7 Mt of LCE. The
Company's Feasibility Study (which was announced 12 December 2017)
has established Proven Mineral Reserves (in accordance with 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 30,000 tpa SOP producer in Mexico. In
addition to the Sonora Lithium Project, the Company also has a 50%
interest in the Zinnwald Lithium Project and the Falkenhain Licence
in southern Saxony, Germany. Each of the Zinnwald Lithium Project
and the Falkenhain Licence are 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 and the Falkenhain Licence provides
close geographical proximity to the German automotive and
downstream lithium chemical industries.
1 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.
2 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.
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: roaster /
kiln FEED and crystalliser/evaporation/IX FEED comprising
approximately 75% of the total capital cost of the processing
plant; commencement of lithium carbonate production in Q1 2020; use
of LNG gas supplies during early stages of commissioning;
finalising debt and equity financing strategies; commencement of
construction phase at Sonora in H1 2018; 18 month build-out period
and production of high value lithium products in Q1 2020. 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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