TIDMBCN
RNS Number : 1141Q
Bacanora Lithium PLC
04 June 2018
Bacanora Lithium plc / Index: AIM / Epic: BCN / Sector: Natural
Resources
4 June 2018
Bacanora Lithium plc ("Bacanora" or the "Company")
Positive Progress at Sonora Lithium Project
Bacanora Lithium plc, the London listed lithium exploration and
development company, is pleased to provide a positive update on the
ongoing development of its Sonora Lithium Project in Mexico
('Sonora' or the 'Project') as it prepares to commence construction
of a fully integrated lithium carbonate operation, beginning with
Stage 1 construction of a 17,500 tpa plant before upgrading to
35,000 tpa via a planned Stage 2 expansion project.
Highlights:
-- State Governor Claudia Pavlovich hosted the official Project
Commencement ceremony in Hermosillo, Mexico
-- Hanwa Corporation ('Hanwa') of Japan has agreed in principle
to extend their initial lithium off-take partnership for a further
5 years at a rate of 17,500 tpa of lithium carbonate, on the same
commercial terms as the initial 5 year off-take
-- Front End Engineering Design (FEED) ongoing and scheduled to
have final designs, cost estimates and process guarantee scopes
substantially completed by end Q2 2018
-- Continued pilot plant operations for operator training and
production of battery grade lithium samples for delivery to
selected customers
-- Current timetable is to commission the plant within 20 months subject to project financing
Bacanora CEO Peter Secker said: "Bacanora is continuing its
strategy to become a leading, low cost producer of battery grade
lithium carbonate. To maximise these strong value prospects we are
focused on fast-tracking the Project into production with
preliminary site access developments underway and the chemical
processing plant construction due to commence later this year. This
will initially focus on building a 17,500 tpa lithium carbonate
plant with engineering design and documentation for procurement of
long lead items being developed. Following successful project
execution, we will look to undertake our Stage 2 expansion plan to
increase lithium production to 35,000 tpa. In support of this, we
have agreed in principle to extend the initial lithium off-take
partnership with Hanwa for a further 5 years at a rate of 17,500
tpa and are expecting to complete formal documentation shortly. In
addition, we are progressing well in discussions for additional
strategic partners for the extra Stage 2 off-take tonnages. These
are exciting times for Bacanora and we look forward to sharing
further updates on the road to production in due course."
Project Commencement Ceremony
Project development took another significant step forward in
early April 2018 with an official Project Commencement ceremony
held in Hermosillo, Mexico. The ceremony was presided over by
Governor Claudia Pavlovich and senior Sonora state government
personnel and focussed on the significant economic opportunities
that the construction of a fully integrated lithium carbonate
facility will create. This includes the new employment
opportunities that will be created and the enhanced standing it
will give Sonora state as a supporter of new "green" technology in
North America.
Off-take Agreement with Hanwa:
Following on from the Company signing a 5-year lithium off-take
agreement with Hanwa in April 2017, Bacanora has continued to
strengthen its relationship with Hanwa, which is one of the largest
battery chemical traders in Asia. Accordingly, Bacanora and Hanwa
have agreed in principle to extend their initial lithium off-take
partnership for a further 5 years at a rate of 17,500 tpa of
lithium carbonate, on the same commercial terms as the initial 5
year off-take, with lithium sales continuing to be based on an "at
market" pricing structure. Formal documentation for this is now
being prepared. This additional 5-year agreement will underpin the
Company's expansion strategy to bring on a Stage 2 expansion of the
project to increase lithium production to 35,000 tpa. The Company
continues to hold discussions with additional strategic investors
for additional Stage 2 off-take tonnages.
Front End Engineering Design (FEED) and EPC/EPCM Engineering
The Front End Engineering Design ("FEED") of both the
roaster/kiln and the crystalliser/evaporation/IX, which account for
approximately 75% of the total capital cost of the processing
plant, are advancing following the delivery of bulk lithium samples
from Sonora to selected vendors. Detailed discussions with EPC/EPCM
groups for all other parts of the processing plant are also
ongoing. The current FEED schedule is to have designs, cost
estimates and process guarantee scopes to be substantially
completed by end Q2 2018, with orders for long lead items being
placed at the end of the FEED process in Q3 2018. The current
timetable is based on a planned commissioning of the project in Q1
2020 and lithium carbonate shipments commencing subsequent to
commissioning. This schedule and final project go ahead is subject
to completing the US$450 million debt and equity project financing
strategy and final Board approvals. The schedule will be updated at
the end of the FEED process.
**ENDS**
For further information please visit www.bacanoralithium.com or
contact:
Bacanora Lithium Peter Secker, CEO info@bacanoraminerals.com
Plc
Cairn Financial Sandy Jamieson / Liam
Advisers LLP, Nomad Murray +44 (0) 207 213 0880
------------------------------------- ---------------------------------------
Canaccord Genuity, Martin Davison / James
Broker Asensio +44 (0) 20 7523 8000
------------------------------------- ---------------------------------------
St Brides Partners, Megan Dennison / Frank
Financial PR Adviser Buhagiar +44 (0) 20 7236 1177
------------------------------------- ---------------------------------------
ABOUT BACANORA:
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 1.9 Mt 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 (Li2CO3) equivalent; determined by
multiplying Li value in percent by 5.324 to get an equivalent
Li2CO3 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 news service of the
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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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