TIDMBCN
RNS Number : 3649X
Bacanora Minerals Ltd
21 February 2017
Bacanora Minerals Ltd
('Bacanora' or the 'Company')
Acquisition of 50% Interest in Strategic German Lithium
Asset
Bacanora, the London and Canadian listed (AIM: BCN, TSXV: BCN)
resource developer focused on building an international lithium
company, is pleased to announce that it has entered into a
definitive agreement (dated 17 February 2017) to acquire a 50%
interest in, and joint operational control of, the Zinnwald Lithium
Project ('Zinnwald' or 'the Project') in southern Saxony, Germany
from SolarWorld AG ('SolarWorld'), the largest solar panel producer
in Europe. This is in line with management's vision to become a
global lithium operator focused on projects with significant value
accretion potential and defined markets at both the product and
geographic levels.
Highlights:
-- Zinnwald, which reportedly produced lithium carbonate in the
1950s, is located in a granite hosted Sn/W/Li belt that has been
mined historically for tin, tungsten and lithium
-- The Project benefits from excellent access to the rapidly
growing market for lithium in Germany which is being driven by the
automotive, renewable energy storage and chemicals industries
-- Geographical location of the Project provides potential
access to new markets, which diversifies risk and complements
potential target markets for the Company's Sonora project in Mexico
where a Feasibility Study is on track for completion in 2017
-- Bacanora will earn 50% of the project in return for a cash
consideration of EUR5 million and an undertaking to contribute EUR5
million towards the cost of completing a Feasibility Study on the
Project, which is anticipated to take approximately 18-24 months to
complete
-- Access to the significant lithium technical expertise
developed by SolarWorld over the past ten years in the renewable
energy industry
-- Option to acquire the outstanding 50% held by SolarWorld
within a 24 month period for EUR30 million
Bacanora Chairman Mark Hohnen stated, "Zinnwald is a strategic
asset located in close proximity to a thriving market for lithium
and energy products. The Project fits with both our corporate
strategy to develop and operate integrated lithium projects to
produce high value lithium products, and also the commercial
overlay which drives our acquisition strategy."
"Sonora continues to sit at the heart of our portfolio and
having produced battery grade lithium carbonate from our 100% owned
pilot plant ahead of finalising off-take agreements in Asia, we are
committed to bringing this into production. However, Zinnwald
provides us with exposure to an exciting new geographic market and
adds hard rock mineralisation to our portfolio. We believe that
with an ownership structure that is accretive to Bacanora, Zinnwald
will further facilitate our ambition of becoming an independent
global lithium operating group."
Zinnwald
The Zinnwald Lithium Project is located in southeast Germany,
some 35 km from Dresden and adjacent to the border of the Czech
Republic and within 5km of the town of Altenberg and 50 km of the
town of Freiberg.
The 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
project allows immediate access to the German automotive and
downstream lithium chemical industries.
The Zinnwald Project and leases are held by Solarworld Solicium
GmbH, a 100% owned subsidiary of SolarWorld AG, the largest solar
panel producer in Europe. The Project has a historical resource
estimate dated 1(st) October 2014 which was reported in accordance
with the PERC Code[1], comprised of Measured, Indicated and
Inferred Resources.[2] A Qualified Person (under National
Instrument 43-101 - Standards of Disclosure for Mineral Projects
('NI 43-101')) has not done sufficient work to confirm the
historical estimate; hence Bacanora is not treating the historical
estimate as current Mineral Resources or Mineral Reserves. However,
Bacanora believes that the historical work at Zinnwald and the
geological context of the deposit support the case for investing in
further work to investigate the Mineral Resource and its potential
for economic extraction.
Resource Category Tonnes* Li Grade Contained
(000) (ppm) LCE** (Tonnes)
------------------- -------- --------- ----------------
Measured 10,283 3,661 200,277
------------------- -------- --------- ----------------
Indicated 16,287 3,594 311,408
------------------- -------- --------- ----------------
Inferred 9,867 3,705 194,484
------------------- -------- --------- ----------------
Notes:
* Li cut-off 2,500pm and >2 metres vertical thickness.
** LCE is the industry standard terminology for, and is
equivalent to, Li(2) CO(3) . 1 ppm Li metal is equivalent to 5.32
ppm LCE / Li(2) CO(3) . 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.
SRK Consulting (UK) Ltd has briefly reviewed the historical work
at Zinnwald and adjacent properties and is working with the Company
to test the historical estimate and develop a future resource. It
is expected that additional infill drilling and an updated
geological and grade model will allow current Mineral Resources to
be reported, following which a new technical report is expected to
be prepared in accordance with NI 43-101 and AIM Note for Mining
and Oil & Gas Companies standards.
In 2014, SolarWorld AG also completed a technical report on the
Project, prepared in accordance with the PERC Code.[3] Bacanora has
reviewed the foregoing report (a copy of which has been published
by SolarWorld AG on its website) and relied upon it in ascribing
its internal valuations for the Project and the negotiation of the
transaction terms.
Bacanora's investment into the Zinnwald project gives the
potential to provide entry into the fast-growing European lithium
market whereas the Sonora project continues to focus on off-take
markets in Asia. In addition, the location of Zinnwald, adjacent to
existing downstream German lithium chemical infrastructure and
automotive manufacturing capacity, has the potential to allow the
Zinnwald Project to focus on the production of higher value,
downstream lithium products, which typically command premium
pricing as compared to lithium carbonate products.
Martin Pittuck of SRK Consulting (UK) Limited is the Qualified
Person pursuant to NI 43-101 and the AIM Note for Mining and Oil
& Gas Companies who has reviewed and approved the technical
contents of this announcement.
For further information, please contact:
Bacanora Minerals Peter Secker, CEO info@bacanoraminerals.com
Ltd.
----------------------- ----------------------------- --------------------------
Cairn Financial
Advisers LLP, Sandy Jamieson/Liam +44 (0) 20
Nomad Murray 7213 0880
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Numis Securities
Ltd, John Prior/James Black/Paul +44 (0) 20
Broker Gillam 7260 1000
----------------------- ----------------------------- --------------------------
St Brides Partners, Frank Buhagiar/ Elisabeth +44 (0) 20
Financial PR Adviser Cowell 7236 1177
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ABOUT BACANORA:
Bacanora is a Canadian and London listed minerals explorer
(TSX-V: BCN and AIM: BCN). The Company explores and develops
industrial mineral projects, with a primary focus on the Sonora
Lithium Project. The Company's operations are based in Hermosillo
in northern Mexico and it currently has two significant projects
under development in the state of Sonora.
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 NI 43-101) of 4.5 million tonnes (LCE)
and 2.7 million tonnes Inferred.[4] A PFS completed in Q1 2016[5]
demonstrated the economics associated with becoming a 35,000 tpa
lithium carbonate and 50,000 tpa SOP producer in Mexico.
[1] PERC Code means the Pan European Code for Reporting of
Exploration Results, Mineral Resources and Reserves prepared by the
Pan-European Reserves and Resources Reporting Committee, as
amended.
[2] The foregoing estimates were set forth in a report dated
October 1, 2014, prepared by G.E.O.S. Ingenieurgesellschaft mbH and
Technical University Bergakademie Freiberg on behalf of SolarWorld
Solicium GmbH and entitled, "Zinnwald Lithium Project, Report
According to PERC Standard".
[3] See report dated October 1, 2014, prepared by G.E.O.S.
Ingenieurgesellschaft mbH and Technical University Bergakademie
Freiberg on behalf of SolarWorld Solicium GmbH and entitled,
"Zinnwald Lithium Project, Report According to PERC Standard".
[4] See Amended Mineral Resource Estimate for the Sonora Lithium
Project, 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.
[5] 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.
The company news service from the London Stock Exchange
END
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