Big picture - Why invest in Bacanora Minerals Ltd
Bacanora Minerals Ltd Snapshot
Bacanora Minerals is an AIM and TSX listed company focused on developing the world’s next major lithium project in Mexico.
With the global lithium-ion battery market expected to soar from $17.5 billion to $70 billion by 2020, the demand for lithium is set to increase dramatically in the short to medium term. This is predominantly being driven by the automotive industry, although renewable battery storage technology will also play a significant part in this growth. To this end, the Company is rapidly commercialising the world class Sonora Lithium Project in Mexico which benefits from a large, scalable and high grade lithium resource with an NI 43-101 Measured plus Indicated Resource of over 5 million tonnes LCE. A Feasibility Study (‘FS’) has been completed, and results confirm the positive economics and favourable operating costs of a 35,000 tonnes per annum ('tpa') battery grade Li2CO3 operation. The FS estimates a pre-tax project Net Present Value ('NPV') of US$1.253 billion at an 8% discount rate; an Internal Rate of Return ('IRR') of 26.1%, and Life of Mine ('LOM') operating costs of US$3,910/t of lithium carbonate ('Li2CO3').
With an 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 (‘LCE’)[i] 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.
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SONORA PILOT PLANT
MexicoSonora LithiumSonora Pilot PlantMagdalena BorateGermanyZinnwald LithiumSONORA PILOT PLANT
Over the past 3 years, Bacanora has built a lithium carbonate pilot plant in Hermosillo, to upgrade and process ores from the nearby Sonora Lithium Project. Over the past 24 months the plant has been upgraded to include the full metallurgical flow sheet of pre-concentration, flotation, roasting and lithium carbonate precipitation.
In mid 2016 the facility was upgraded to allow it to run continuously on a 24/7 basis. The plant continues to produce battery grade (99.5%) lithium carbonate, as it serves a key role in training local operators ahead of the commencement of full scale operations at Sonora.
The Magdalena Borates Project, which is owned 100% by Bacanora and covers 16,503 Ha in Sonora State in northern Mexico, represents an excellent opportunity to develop boric acid production to be sold in the domestic Mexican market.
Previous studies have estimated that a low CAPEX cost project could enable the Company to commence production relatively quickly. The project is subject to a 3% royalty to a Rio Tinto subsidiary and a 3% royalty to Colin Orr-Ewing.
The project consists of seven concessions, and to date, three main borate zones have been located on the Magdalena project area: Cajon; Bellota and Pozo Nuevo. El Cajon is the most advanced project with a NI 43-101 indicated resource of 11.06m tonnes at 10.6% grade for 1,170,000 tonnes of boron trioxide (B2O3).
Test pit and boric acid pilot plant testwork is ongoing and to date 930 tonnes from the borates have been processed with samples of 99% boric acid sent to potential off take customers. With these results in hand, ongoing metallurgical testwork based on higher value boric acid will commence in late 2016/2017, focused on developing an operation of up to 50,000tpa of boric acid production for domestic use. Mexico has a market for borates and the project benefits from close proximity to established infrastructure, grid supply, road, water and rail.
Bacanora has a 50% interest in, and joint operational control of, the Zinnwald Lithium Project, located approximately 35km south east of Dresden in the eastern part of Germany.
Zinnwald represents a strategic asset located in close proximity to a thriving market for lithium and energy products, which is being fuelled by Germany’s electric automotive industry and the rise of renewable energy storage. Therefore, the acquisition from SolarWorld AG complements Bacanora’s existing lithium portfolio of pipeline projects and provides exposure to an exciting new market at both the project and geographic level.
The Zinnwald Lithium Project is located adjacent to the border of the Czech Republic and within 5km of the towns of Altenberg and Freiberg. It is located in a world-class 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 project currently hosts a PERC resource comprising 36.4Mt of Indicated and Inferred Resources at a grade of 3,600ppm Li (PERC is the Pan European Reserves and Resources Reporting Committee, which is not NI-43-101 compliant but could be updated to NI-43-101 standard with additional drilling).
Bacanora believes that both historic work at Zinnwald and the geological context of the deposit demonstrates its potential for economic extraction of lithium products, as well as potential by-products of tin, tantalum and SOP. Bacanora’s investment and expertise will facilitate further development in order to achieve higher-value, downstream lithium products which command higher prices in the market.
Subject to the successful completion of a Feasibility Study, which is currently underway and is expected to take 18-24 months, Bacanora has the option to acquire the outstanding 50% held by SolarWorld.
MARK HOHNEN - Executive Director / Chairman
PETER SECKER - Chief Executive Officer
JANET BOYCE - Chief Financial Officer and Financial Director
EILEEN CARR - Non Executive Director
RAY HODGKINSON - Non Executive Director
JAMES STRAUSS - Non-Executive Director
DR ANDRES ANTONIUS - Non-Executive Director
MR. JUNICHI TOMONO - Non-Executive Director
PAUL BOLGER - Corporate Secretary
|Shareholder name||Shares held||% holding|
|M&G Investments Funds||13,456,784||10.04%|
|Hanwa Co Ltd||12,333,261||9.20%|
|Cadence Minerals Plc||12,285,058||9.17%|
|Igneous Capital Limited||10,500,000||7.83%|
|The Capital Group||8,573,925||6.40%|
|D&A Income Ltd.||5,303,030||3.96%|
|Contact: [email protected]|
|Head Office Address (Calgary) 2204 6th Ave N.W. Calgary, AB T2N 0W9 Phone: 403-237-6122 Fax: 403-237-6144|
|London Office The Clubhouse 8 St. James's Square London SW1Y 4JU United Kingdom|
|Advisors: Hugo de Salis and Frank Buhagiar St Brides Partners Phone: +44 (0) 20 7236 1177|
|Mexico Office Calle de Las Galaxias 68 Parque Industrial Hermosillo Hermosillo, Sonora 83297 Mexico Phone: +52 662 251 0360|
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