Bacanora Minerals Ltd (LON:BCN) has reaffirmed the feasibility study for the Sonora lithium project in Mexico should be completed by late Summer.
Lithium carbonate prices have doubled to close to US$12,000/t from an average of around US$6,000/t in 2015 and Bacanora said it will issue long term assumptions ahead of publishing the study.
The study is budgeted to cost approximately US$7mln and will reflect the recent rises in the price of lithium and also higher reagent input costs.
An earlier, less detailed pre-feasibility study, was based on 17,500tpa of lithium carbonate production, which will rise to 35,000tpa in the second stage of development.
Bacanora added it is fully financed with approximately US$42mln in the bank, which is sufficient to fund it fully through to the initial project development and the start of the construction stages at both of its projects.
In February, the company acquired 50% of Deutsche Lithium, which owns the Zinnwald project in southern Saxony, Germany, adjacent to the border of the Czech Republic and within 5km of the towns of Altenberg and Freiberg.
That puts it close to a number of car manufacturing plants. A feasibility study at Zinnwald is expected to take between 12-18 months.
Losses in the three months to March were US$780,000 (US$1.59mln).
Bacanora now in a very strong position financially, says analyst
In a note to clients, Shore Capital analyst Yuen Low said: “For us, the key takeaways were that the Feasibility Study (FS) on the flagship Sonora lithium project in Mexico remains on track for completion later this year, and that the company is now in a very strong position financially, following the post-period investments by Hanwa and Capital Research & Management.”
He added that the broker understands from the company that it had around C$42mln in the bank following the investments, with an expected burn rate of around C$0.6mln per month.
In late afternoon trading, Bacanora shares were 0.6%, or 0.5p lower at 84.5p.
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