Bacanora seeks $60m to pay for stage 1 of Sonora project

Image: Bacanora Lithium

Bacanora Lithium plc (AIM:BCN) announced on Tuesday a proposed issuance of new ordinary shares to raise gross proceeds of approximately $60 million to finance the construction of Stage 1 of its flagship Sonora lithium project in Mexico.

Yesterday, the company reported that Ganfeng increased stake to 50% in the project.

With a Measured plus Indicated Mineral Resource estimate of over 5 million tonnes (‘Mt’) (comprising 1.9 Mt of Measured Resources and 3.1Mt of Indicated Resources) of lithium carbonate equivalent and an additional Inferred Mineral Resource of 3.7 Mt of LCE, Sonora is regarded as one of the world’s larger known clay lithium deposits. First production is expected in 2023. 

Following Ganfeng’s investment at the project level in 2019, the Chinese company has been providing engineering and commissioning services for the hydrometallurgical part of the processing plant that produces the final battery-grade product.

The capital cost estimated for Stage 1 production of 17,500 tonnes per annum of LCE at the project has been optimised by Bacanora to $407 million from initial estimates of $420 million. In addition to the $407m capital cost, the company estimates that $37m of additional funding will be required for working capital purposes at the project level.

Lithium prices are soaring in China on the back of heavy demand for lithium iron phosphate (LFP) batteries.

Benchmark’s battery grade lithium carbonate midpoint price (EXW China, ≥99.0% Li2CO3) in January surged by over 40% compared to the same month last year to 61,000 yuan per tonne (~$9,450 a tonne), the highest level since June 2019.

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