Bacanora Lithium PLC Issue of Equity to Cornerstone Shareholder (4409U)
November 25 2019 - 2:00AM
UK Regulatory
TIDMBCN
RNS Number : 4409U
Bacanora Lithium PLC
25 November 2019
Bacanora Lithium plc / Index: AIM / Epic: BCN / Sector: Natural
Resources
25 November 2019
Bacanora Lithium plc ("Bacanora" or the "Company")
Issue of Equity to Cornerstone Shareholder
Bacanora Lithium plc (AIM: BCN), the London traded lithium
exploration and development company, is pleased to announce that it
has raised GBP7,729,150 (approximately US$10 million) via the
placing of 30,916,601 new ordinary shares in the Company (the
'Placing Shares') with one of its long standing cornerstone
shareholders, M&G Plc, at a price of 25 pence per Placing Share
(the 'Placing'), increasing their strategic holding in Bacanora to
19.9%. The net proceeds of the Placing will be used to support
pre-construction works at the Company's Sonora Lithium Project in
Mexico ('Sonora' or the 'Project') where a feasibility study has
indicated highly favourable economics of a battery grade lithium
carbonate operation, including US$1.25 billion NPV, 26% IRR and
operating costs among the lowest in the industry at around
US$4,000/t of lithium carbonate.
Following the Placing, initial planned works at the Project will
involve the commencement of the bulk earthworks on site in H1 2020
and an upgrade to the primary access road. In addition, the funds
raised will be used to place the initial orders for some of the
longest lead-time items in the concentrator, pyrometallurgy and
hydrometallurgy sections of the lithium plant. The placing of
orders for long lead-time items at this early stage will enable the
construction and installation of the lithium plant to commence once
the technical review currently being undertaken by strategic
partner Ganfeng Lithium Co., Ltd. ('Ganfeng') has been
completed.
As part of its Strategic Investment, Ganfeng recently completed
a 29.99% equity investment in Bacanora and a 22.5% investment at
the Sonora project level. Following the Placing, Ganfeng retains
pre-emption rights to maintain its existing interest in Bacanora at
29.99%.
Bacanora Chairman Mark Hohnen said: "Today's Placing, following
an inbound request from one of our long-standing institutional
investors, M&G, represents in our view an endorsement of
Sonora's potential to become a leading supplier of high-value
lithium products to fast-growing industries such as electric
vehicles and energy storage. It also further de-risks the required
funding for the Project, that continues to be progressed by our
brokers, Canaccord and Citi, and which we are aiming to complete in
H1 2020. With our highly supportive strategic partner and leading
global lithium company, Ganfeng, undertaking a technical review of
the Project, we are working hard to ensure we hit the ground
running as soon as this work has been completed. By allowing long
lead-time items to be ordered and earthworks to commence, the funds
raised will enable us to maintain the momentum behind our flagship
project.
"Forecast lowest quartile operating costs, a 200 year plus
resource base and high-grade, high value end product ideally
position Sonora to play a major role in the ongoing battery
technology revolution that promises to transform and reshape how
businesses and industries operate. We are focused on capitalising
on this opportunity for the benefit of all our shareholders and I
look forward to providing further updates on our progress."
Issue of Equity & Total Voting Rights
Application has been made for the 30,916,601 new ordinary shares
to be admitted to trading on AIM ("Admission"). Admission is
expected to occur on or around 28 November 2019. These new ordinary
shares will rank pari passu with the existing ordinary shares in
issue. Following admission of the new ordinary shares, there will
be 222,981,837 ordinary shares in issue. This number may be used by
shareholders in the Company as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change in their interest in, the share capital of
the Company. This placing was arranged by WH Ireland Ltd acting as
sole placing agent. The placing is conditional, inter alia, on
Admission becoming effective.
** ENDS **
For further information please visit www.bacanoralithium.com or
contact:
Bacanora Lithium plc Peter Secker, CEO info@bacanoralithium.com
Janet Blas, CFO
Cairn Financial Advisers Sandy Jamieson / Liam +44 (0) 20 7213
LLP, Nomad Murray 0880
----------------------------------- -------------------------
James Joyce / James Sinclair-Ford
WH Ireland, Placing Harry Ansell / Daniel +44 (0) 20 7220
Agent Bristowe 1666
----------------------------------- -------------------------
Citigroup Global Markets, Tom Reid / Patrick Evans +44 (0) 20 7986
Joint Broker / Matthew Kenney 4000
----------------------------------- -------------------------
Canaccord Genuity, James Asensio / Edward +44 (0) 20 7523
Joint Broker Montgomery 8000
----------------------------------- -------------------------
St Brides Partners, Frank Buhagiar / Megan +44 (0) 20 7236
Financial PR Adviser Dennison 1177
----------------------------------- -------------------------
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014
ABOUT BACANORA LITHIUM:
Bacanora owns ten mining concession areas covering approximately
100 thousand hectares in the northeast of Sonora State in Mexico.
Seven of these ten mining concessions (the "Sonora Lithium
Project"(1) ) were included in the Feasibility Study announced on
12 December 2017. The Company, through drilling and exploration
work to date, has established a Measured plus Indicated Mineral
Resource estimate of over 5 Mt (comprising 1.9 Mt of Measured
Resources and 3.1 Mt of Indicated Resources) of LCE(2) and an
additional Inferred Mineral Resource of 3.7 Mt of LCE. The
Company's Feasibility Study 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. Sonora Lithium Ltd ("SLL") is the operational holding company
for the Sonora Lithium Project and owns 100% of the La Ventana
concession. The La Ventana concession accounts for 88% of the mined
ore feed in the Sonora Feasibility Study which covers the initial
19 years of the project mine life. SLL is owned 77.5% by Bacanora
and 22.5% by Ganfeng Lithium Ltd. SLL also owns 70% of the El Sauz
and Fleur concessions, which are held by Mexilit S.A. de C.V.
("Mexilit").
2. LCE = lithium carbonate (Li(2) CO(3) ) equivalent; determined
by multiplying Li value in percent by 5.323 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.
IMPORTANT NOTICE
The contents of this announcement have been prepared by and are
the sole responsibility of Bacanora.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IOECKBDNCBDDBDB
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