Bacanora Minerals Ltd (LON:BCN CVE:BCN) reached another milestone in its bid to start mining lithium from its flagship Sonora project in Mexico with the receipt of environmental approval from the government.
The environment ministry has given the go-ahead for a 35,000tpa (tons per annum) lithium carbonate operation, following comprehensive studies carried out over two years.
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"One-by-one we are ticking off our checklist ahead of our goal of developing Sonora into a world class lithium operation," chief executive Peter Secker told investors.
"Our work to date has already established Sonora as a large and scalable project; while our pilot plant at Sonora has been producing battery grade lithium carbonate on a continuous basis for the past eighteen months."
Secker noted this has meant the flow sheet and metallurgical process for the site had been proved, helping to secure Hanwa as both a strategic and off-take partner for up to 100% of production.
Hanwa Co is a leading Japan-based global trading company and one of the larger traders of battery chemicals in Asian.
It will pay market prices for between 70% and 100% of the lithium carbonate produced during stage one and has the option to increase the off-take tonnage by up to 100% at Stage 2 production.
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"We are confident that Sonora remains on course to help meet expected strong growth in demand for lithium carbonate from fast-growing industries such as electric vehicles and battery storage," added Secker.
Bacanora also today updated on the feasibility study for Sonora, which on course to be completed later this year, and is expected to show the project has a favourable position in the industry cost curve.
This is due to factors including that it's an open pit and a 'free digging' deposit, removing the need for the ore to be drilled, blasted and crushed.
Sonora has an indicated NI 43 101 resource of 4.5mln tonnes of lithium.
In late morning trading, Bacanora's shares were up 3.7% at 84.5p.
Cadence hails progress
Kiran Morzaria, chief executive officer of Cadence Minerals PLC (LON:KDNC) – which holds 9.3% of the equity in Bacanora Minerals and 30% of Mexalit and Megalit joint venture companies - commented: "It is great to see the Progress being made at Sonora, the environmental approvals are a key step in the development of bringing this excellent asset into production.
“It is also important to note that the change in roasting process has continued to produce battery grade lithium carbonate since May and that the process mitigates the requirement for sulphuric acid."
He added: "Sonora is considerably de-risked and scalable and we look forward to seeing the results from the upcoming feasibility study."
-- Adds share price; Cadence Minerals comment --