TIDMBCN
RNS Number : 5806W
Bacanora Lithium PLC
12 December 2019
Bacanora Lithium plc / Index: AIM / Epic: BCN / Sector: Natural
Resources
Bacanora Lithium plc ("Bacanora" or the "Company")
AGM Update
Bacanora Lithium plc (AIM: BCN), the London traded lithium
company, is holding its Annual General Meeting ('AGM') later today.
During the AGM, Bacanora Chairman, Mark Hohnen will update
shareholders on key milestones achieved over the past 12 months,
specifically with regards to the Company's flagship lithium project
in Sonora, Mexico ('Sonora' or the 'Project').
Highlights for the year 2019
2019 has been a critical year for Bacanora and is one that has
resulted in a number of significant developments that have
continued to add incremental shareholder value over the past 12
months. These developments include:
-- Securing one of the world's biggest lithium producers,
Ganfeng Lithium Co., Ltd. ('Ganfeng'), as a 29.9% cornerstone
investor
-- Securing Ganfeng as our joint-venture development partner
with a 22.5% direct investment in Sonora
-- Securing 100% of Stage 1 production at Sonora under two
guaranteed offtake agreements with Ganfeng and Hanwa and 75% of
Stage 2 production with Ganfeng
-- Continued longstanding support from our earliest
institutional investor M&G Plc ('M&G') who increased their
investment in Bacanora to 19.9%
-- Completion of a Feasibility Study for the Zinnwald Lithium Project in Germany
"Each of the key milestones achieved over the past 12 months
demonstrated increased shareholder value and moves us ever closer
to production, further distinguishing us from our peers. Indeed, in
the 12 months since our last AGM, the Bacanora share price has
increased by 25%, compared with our lithium peers who have seen
share price declines of between 10% and 74%.
"In order to appreciate the value of our Company, it is
important to understand what first attracted Ganfeng and M&G to
Bacanora and our world class Sonora Lithium Project in Mexico. I
believe this includes Sonora's large scale and high grade
resources, proven processing route, robust economics, strong
shareholder base, a management team with a proven track record of
delivery, a supportive jurisdiction, and access to end markets.
Sonora is set to be one of the lowest cost operators in the
industry at around US$4,000/t production cost. This low-cost
profile is a significant advantage at a time when Australian hard
rock producers' higher cost production models are coming under
increasing pressure as a result of falling spodumene prices.
"The considerable institutional and industry backing we continue
to receive is testament to the robust economics of Sonora. Ganfeng
is now the largest shareholder in the Company and is also a
joint-venture partner in Sonora. Ganfeng has embarked on a
technical review of the hydrometallurgical circuit of the
processing plant, with a view to potentially sourcing key sections
of the production equipment from Chinese suppliers and is expected
to be completed in H1 2020. Both Bacanora and Ganfeng are also
developing testwork programmes to evaluate the potential to produce
other high value lithium products at Sonora in addition to
battery-grade lithium carbonate.
"Our confidence extends to our Zinnwald project in Germany. With
a Feasibility Study for a 5,112 tpa (7,285 tpa LCE) of
battery-grade lithium fluoride operation, project NPV of EUR428
million, an IRR of 27.4%, and a resource of 124,974 tonnes of
contained lithium, Zinnwald's potential to supply the European
market with high value lithium products is clear. Discussions with
strategic partners with a view to funding the EUR159 million
capital cost of the project are ongoing.
"With major institutions and industry players on our shareholder
register and a strong retail investor following, we are well-placed
to complete the finance package for Sonora in H1 2020. Before then,
thanks to the progress made over the last twelve months, Bacanora
has a cash rich balance sheet which enables us to invest in long
lead items and commence bulk earthworks. Our focus remains to start
production at Sonora at the earliest opportunity, as we look to
realise the Project's potential and, in the process, generate value
for all our shareholders."
**S**
For further information, please 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
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Citigroup Global Markets, Tom Reid / Patrick Evans +44 (0) 20 7986
Broker / Matthew Kenney 4000
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+44 (0) 20 7523
Canaccord Genuity, Broker James Asensio 8000
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St Brides Partners, Frank Buhagiar / Megan +44 (0) 20 7236
Financial PR Adviser Dennison 1177
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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 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 1.9Mt 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
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
and Altenberg Licences in southern Saxony, Germany. The Zinnwald
Feasibility Study has established Total Mineral Reserves (Proven
and Probable in accordance with NI 43-101) of 94kt of contained
lithium and confirmed the economics associated with becoming a
5,112 tpa lithium fluoride producer in Germany. Each of the
Zinnwald Lithium Project, and the Falkenhain and Altenberg Licences
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 and Altenberg Licences 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.
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 updated
estimation of resources, followed by mine design and mine planning
activities and the completion of feasibility studies. 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 the
United Kingdom, Canada, the United States, Mexico, Germany 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 and on our
website at www.bacanoralithium.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 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
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