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Bacanora Lithium

AIM-listed lithium development and exploration firm with assets in Mexico and Germany

(LON:BCN)

Overview

  • Principal asset is the Sonora Lithium Project located in NW Mexico, 170km south of USA

  • Post-tax NPV8 of US$802m based on $11,000/t Li2CO3 with upfront capex of US$420m.

  • Project consists of seven concessions, with La Ventana owned 99.9% by Bacanora; remainder held in JV with Cadence minerals comprising 70% ownership by Bacanora

  • 19-year mine plan producing 17.5ktpa battery-grade Li2CO3 over four-year open-pit Stage 1 period, followed by Stage 2 expansion by duplication plant to produce minimum target output of 35ktpa Li2CO3

  • Plant additionally designed to produce up to 28.8ktpa K2SO4 in Phase 2

  • Average LOM operating costs $3,910/t Li2CO3 ($3,418/t Li2CO3 net of K2SO4)

  • Pilot plant established in 2015 has provided a training ground for employees and demonstrated that BCN has a viable flowsheet capable of producing battery quality lithium carbonate.

  • Only small portion of resource exploited under current plan. Indicates plant can be scaled up to meet strong growth expectations of the lithium market.

  • Board-approved ESG policy with strong independent director representation on Board and HSEQ Manager reporting directly to site GM.

Share Price

Chinese Strategic Partner: Ganfeng

  • Ganfeng Lithium made a £14m strategic investment for a 29.9% equity interest in Bacanora in Oct 2019 and a 22.5% stake at he project level for £7.6m.

  • Long-term offtake at market-based prices for 50% of Li production in Stage 1 and up to 75% of Stage 2 production.

  • Ganfeng taking an active role in project management and engineering to optimize the project, potentially reduce capital costs and derisk commissioning.

  • M&G followed up with a £7.7m investment acquiring 19.9% of Bacanora in Nov 2019, with proceeds used to support pre-construction works at Sonora.

Secondary Asset: Zinnwald

  • Zinnwald site located 35km south of Saxony’s state capital, Dresden, adjacent to Czech border - feasibility study completed June 2019 indicating post-tax NPV8 of €270m with €159m initial construction capex based on €22,000/t LiF.

  • Annual average LiF production 5.1ktpa with 32ktpa K2SO4 with LOM operating costs of €13,058/t LiF.

Reserves & Resources

© 2020 by China Mining Club

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