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Bacanora Lithium expects to conclude Sonora project financing in coming months

Published: 08:05 13 Feb 2019 GMT

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Bacanora Lithium Plc (LON:BCN) chief executive Peter Secker highlighted the rapid progress as it continues to advance the Sonora mine development project in Mexico.

The company, in its interim results statement today, highlighted that in the second half it expects to finalise its financing package for the Sonora project whilst also bring forward its second lithium project, Zinnwald, where a feasibility study is anticipated.

Zinnwald may potentially packaged in a separate vehicle, to be floating into a stand-alone listed company.

READ: Bacanora mulls Zinnwald spin-out as it advances Sonora

Highlighting the strides made towards pivotal project financing, Secker said: “The common thread linking Hanwa, the Japanese battery metals trader; SGRF, the sovereign wealth fund of the Sultanate of Oman; RK Mine Finance, the debt provider; Citigroup and Canaccord, the global investment banks, is that they have all joined with Bacanora to assist in securing the funding package for a 35,000tpa lithium carbonate operation at our Sonora project.

"For a junior resource company to have such a blue-chip roster of backers is a measure of the quality of the project, the favourable long-term fundamentals for the lithium market and the proven track record of the Bacanora team in terms of developing and delivering high quality lithium projects.”

Secker added: “The world needs lithium to power the electric vehicles we may one day all be driving and also to help store energy generated from renewable sources. 

“The Sonora Lithium Project hosts a large, open-pit, scalable resource, with a US$1.25billion project NPV and operating costs among the lowest in the industry and we believe that Sonora is ideally placed to become a major supplier of battery grade lithium for many years to come and in the process generate substantial returns for investors.”

In terms of financial results, the interim statement had little insight for investors in the pre-revenue company. It reported a US$4.29mln loss for the six month period as investment into Sonora and Zinnwald continued, and at the end of the period Bacanora had US$20.46mln of cash and equivalents.

The company did highlight that it had secured US$240mln during the period as part of the Sonora project financing – including a US$150mln senior debt facility with RK Mine Finance, a US$65mln equity commitment from the State General Reserve Fund of Oman and a US$25mln equity commitment from offtake partner Hanwa.

Talks continue with “industry and strategic financial parties”, Bacanora said.

On the operations side, the company noted that engineering and design work continues.

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