TIDMBCN
RNS Number : 6297T
Bacanora Lithium PLC
05 July 2018
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE
REPUBLIC OF SOUTH AFRICA, SINGAPORE OR ANY OTHER JURISDICTION IN
WHICH SUCH RELEASE PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL.THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON
STOCK EXCHANGE, NOR IS IT INTED THAT IT WILL BE SO APPROVED.
Bacanora Lithium plc / Index: AIM / Epic: BCN / Sector: Natural
Resources
05 July 2018
Bacanora Lithium Plc ("Bacanora" or the "Company")
US$150 Million Debt Funding Secured as Part of Sonora Lithium
Project Funding Package
Bacanora Lithium plc, the London listed lithium company, is
pleased to announce it has entered into a US$150 million senior
debt facility (the "Facility") with RK Mine Finance ("RK"), a
leading specialist in the provision of senior debt capital to
mining companies, for the development of Stage 1 of the Sonora
Lithium Project in Mexico ("Sonora" or the "Project"), an initial
17,500tpa lithium carbonate ("Li2CO3") operation. The Company
believes the competitive terms of the RK Facility provide further
validation of the quality of Sonora's battery grade (+99.5%) Li2CO3
product and its potential to become a leading supplier of high
value lithium products to fast-growing industries such as electric
vehicles and energy storage. The Facility forms part of an overall
funding package for Sonora and further updates will be provided by
the Company in due course.
Highlights
-- US$150 million senior debt facility secured with leading
specialist finance provider at competitive rates
-- Follows favourable Feasibility Study which assigned a pre-tax
US$1.253 billion NPV8 to the Sonora Lithium Project
-- Advanced discussions with off-take partner and other
strategic investors to complete the proposed Stage 1 development
funding package
Bacanora CEO Peter Secker said: "We believe that senior debt
facilities of this size have been few and far between in the junior
resource space in recent years. Furthermore, we consider that the
costs and terms of the Facility are highly competitive when
compared to other debt packages that have recently been reported
for greenfield lithium projects in Canada and Australia. We view
the debt facility with RK as a vote of confidence in Sonora's
credentials by a leading specialist debt provider in the resource
sector.
"We have always believed that Sonora stands out from the crowd.
Not only is the Project one of the world's larger lithium deposits
but, as the Feasibility Study demonstrates, it is expected to have
one of the lowest quartile (Q1) LOM operating costs once production
commences in 2020. In addition, we have proved our operating
credentials with the Sonora pilot plant, which continues to produce
battery grade (+99.5%) lithium carbonate. We believe that it is
this compelling combination that has enabled us to attract
blue-chip backers including the Japanese trading company Hanwa as
an offtake partner and strategic investor, tier one fund managers
as major shareholders, and now RK as a debt provider. We continue
to talk with other important participants in the lithium space with
a view to securing additional high quality strategic partners, as
we focus on entering into the construction phase of what we believe
will be the next significant producer of battery grade lithium
carbonate."
Terms of US$150 million RK Facility
The Facility is structured as two separate Eurobonds to be
listed in Jersey:
-- Main bond: US$150m nominal amount secured notes issued at a
purchase price of US$138m with a 6-year term and bearing an
interest rate of three months LIBOR +8% per annum based on a
nominal amount of US$150m but payable only on drawn down principal.
Interest will be capitalised every three months for the first 24
months and thereafter interest will be paid every three months in
cash;
-- Second bond: US$56m nominal amount zero interest-bearing
secured notes issued at a purchase price of US$12m with a 20-year
term. The nominal amount is repayable by reference to monthly
production of lithium at a rate of US$160 per tonne of lithium
produced, with any remaining amount repayable at the end of the
20-year term; and
-- Grant of 6 million warrants exercisable over five years at a
20% premium to the 20-day VWAP, subject to normal anti-dilution
provisions, cash settlement at the Company's option, and cashless
exercise at either party's option.
The Facility may be drawn in three tranches of US$25m, US$50m
and US$75m, subject to certain conditions precedent, with the first
tranche available for immediate drawdown. The conditions precedent
to second drawdown include various matters in respect of the
execution, registration and perfection of certain security and the
granting of listing consent by The International Stock Exchange.
Additionally, the conditions precedent to third drawdown include
the requirement that the first and second issuance of Notes shall
have been listed, that gas supply contracts shall have been entered
into, that commitments for at least 80% of the Project's total
funding requirement have been entered into and that the Project is
fully funded. All drawdowns under the RK Facility will be pro-rata
across the two eurobond instruments.
The Facility forms part of the Company's funding package for
Sonora and follows the completion of a Feasibility Study ('FS')
(see announcement of 13 December 2017). This confirms the
attractive economics and competitive operating costs of the 35,000
tonne per annum ("tpa") battery grade Li2CO3 operation at Sonora:
estimated pre-tax project Net Present Value ("NPV") of US$1.253
billion, a pre-tax Internal Rate of Return ("IRR") of 26.2%, and
Life of Mine ("LOM") operating costs of US$3,910/t of Li2CO3. The
FS estimated the capital cost for an initial 17,500tpa operation at
Sonora to be US$420 million. In addition to this, the Company
estimates that approximately a further US$40 million will be
required for working capital purposes. The Company is continuing
its financing discussions with its off-take partner, Hanwa, the
Japanese trading company, and other strategic, long term investors
for the additional funding required to complete the Stage 1 project
development.
Endeavour Financial is acting as financial adviser to the
Company in respect of the RK Facility.
About RK Mine Finance
RK Mine Finance provides bespoke financing solutions to metals
focused mining companies. Solutions include bridge finance,
construction finance, expansion funding, working capital and
acquisition facilities. The fund has a strong track record of
supporting mining companies with their financing needs and since
its inception has committed capital of over US$1.6bn.
Further information on RK Mine Finance can be found at
www.rkminefinance.com.
This announcement contains inside information as stipulated
under the market abuse regulation (eu no. 596/2014). upon the
publication of this announcement via regulatory information service
this inside information is now considered to be in the public
domain.
**S**
For further information please visit www.bacanoralithium.com or
contact:
Bacanora Lithium plc Peter Secker, CEO info@bacanoraminerals.com
Cairn Financial Advisers Sandy Jamieson / Liam +44 (0) 20 7213
LLP, Nomad Murray 0880
------------------------ --------------------------
Canaccord Genuity Martin Davison / James +44 (0) 20 7523
Broker Asensio 8000
------------------------ --------------------------
St Brides Partners Frank Buhagiar / Megan +44 (0) 20 7236
Financial PR Adviser Dennison 1177
------------------------ --------------------------
Notes to Editors
Bacanora Lithium is a London listed lithium exploration and
development company (AIM: BCN). The Company's primary focus is on
the 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 a track record in mine development and
production.
The Sonora Lithium Project (1) 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
3.1 Mt of Indicated Resources) of LCE(2) and an additional Inferred
Mineral Resource of 3.7 Mt of LCE. The Company's Feasibility Study
(which was announced 12 December 2017) has established Proven
Mineral Reserves (in accordance with National Instrument 43-101
Standards of Disclosure for Mineral Projects) 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 and tungsten 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. The
Project also includes three other lithium concessions, Buenavista,
San Gabriel and Megalit, which do not form part of the Feasibility
Study, and are held by Megalit S.A. de C.V, 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.
FORWARD LOOKING STATEMENTS:
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. 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. Readers are cautioned that this list of
risk factors should not be construed as exhaustive.
This announcement is not for publication or distribution,
directly or indirectly, in or into the United States of America.
This announcement is not an offer of securities for sale into the
United States. The securities referred to herein have not been and
will not be registered under the U.S. Securities Act of 1933, as
amended, and may not be offered or sold in the United States,
except pursuant to an applicable exemption from registration. No
public offering of securities is being made in the United
States.
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
IODUGUGAMUPRGCC
(END) Dow Jones Newswires
July 05, 2018 02:00 ET (06:00 GMT)
Bacanora Lithium (LSE:BCN)
Historical Stock Chart
From Apr 2024 to May 2024
Bacanora Lithium (LSE:BCN)
Historical Stock Chart
From May 2023 to May 2024