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Bacanora Lithium keen to list Zinnwald separately as feasibility study puts value at €428mln

The mine is predicted to generate an average €58.5mln in earnings each year over its life

electric vehicles
Zinnwald sits close to numerous car plants in central Europe

Bacanora Lithium PLC (LON:BCN) shares jumped higher on Wednesday after the firm published a feasibility study for its Zinnwald project in Germany that indicates 94,000 tonnes of reserves and a net present value of €428mln.

Costs to build the mine are estimated at €159mln, which will be paid back after six years of the estimated 30-year mine life.

Peter Secker, chief executive, said a listing of its German business Deutsche Lithium was under consideration to fund the project’s development.

“We are already working hard to secure strategic partners to develop the project and we are actively considering a public listing for Deutsche Lithium, our 50%-owned subsidiary that holds Zinnwald, to help achieve our aim,” he said.

The mine is predicted to generate an average €58.5mln in earnings each year over its life after all-in operational costs of €13,665 per tonne of battery-grade lithium fluoride, which includes chemical processing costs of €7,450 per tonne.

'That puts it in a strong position on the global industry cost curve, 'Secker said, while the conventional processing route and the exposure to fast-growing end markets such as electric vehicles (EVs), ‘all add to the compelling investment case that Zinnwald represents’. 

Bacanora has a 50% stake in Zinnwald, which lies close to a number of car manufacturing plants in south-eastern  Germany and an option over the remaining 50%.

Secker added that Bacanora now has two high-value lithium projects where Feasibility Studies have not only been completed but have confirmed their credentials.

“In tandem with advancing Zinnwald towards the development stage, we are looking to finalise the finance package to build an initial 17,500 tpa lithium carbonate operation in Sonora, Mexico,“ he said.

Sonora has a net present value (NPV) of US$1.25bn, and US$4,000 per tonne operating costs (pre-chemical processing), which are among the lowest in the world. 

“Our two projects have a combined, independently estimated NPV of more than US$1.7bn, a level that far outstrips our current £36mln market capitalisation,” said Secker.

"We are confident this valuation gap will soon close."

In late morning trading, shares in Bacanora Lithium were 8.9% higher at 27.50p.

 -- Adds share price --

Quick facts: Bacanora Lithium Ltd

Price: 29.75 GBX

AIM:BCN
Market: AIM
Market Cap: £66.34 m
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