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Bacanora Minerals Limited (LON:BCN, CVE:BCN) hailed progress at its Sonora lithium project in Mexico as the company advances towards a definitive feasibility study (DFS).
The firm said the focus on expanding the pilot plant continues alongside metallurgical testing.
Negotiations on potential off-take agreements are ongoing alongside work for the DFS earmarked for the first quarter of 2017.
It hopes to deliver battery-grade lithium carbonate samples to off-takers in Asia and Europe during the third quarter of this year.
During the next 12 months, the company will hire engineers and operators to keep the plant in continuous operation and to gain process expertise.
Lithium is increasingly gaining significance, not least in its use in batteries for electric cars - a boom industry.
Rare Earth Minerals Limited (LON:REM) holds an interest in Sonora through its 15.6% stake in BCN.
Bacanora's investors gave a modestly positive reaction to the news, lifting its shares by 0.5p to 94p at lunchtime in London. But REM's stock fell 0.02p, or 3.4%, to 0.43p.
Paul Smith at broker WH IRELAND said: "On the back of yesterday’s update on Cinovec, in which REM is invested in through its holding in European Metal Holdings (LON:EMH, NA), today’s update once again confirms the potential of REM's strategic investments in two of the larger global lithium projects in development.
"We maintain 'speculative buy' today as the value in the projects is further defined."
Bacanora has appointed Ausenco Engineers to do the process engineering for the definitive feasibility study.
SRK Consulting will carry out the mineral resource estimate, while International Mining Consultants will provide the reserve estimate and mine planning.
Bacanora's 3,000 metre in-fill drilling programme is progressing well, with over 2,000 metres sunk so far, with a target of upgrading a portion of the current resource from the indicated to higher confidence measured category.
Latest drill intercepts are consistent with the average thickness of the deposit and assay results are expected next month.