Bacanora Lithium PLC (LON:BCN) said it has signed a new joint venture agreement with its cornerstone investor and offtake partner, Ganfeng Lithium Co Ltd.
Ganfeng recently exercised its option to take its stake in the holding company which owns Bacanora’s Sonoara lithium project in Mexico from 22.5% to 50%.
Completion of the joint venture remains conditional upon certain approvals and consents from authorities in the People's Republic of China.
Once Ganfeng has received approval from the relevant authorities in China and the holding company, SLL, has received £21.9mln of funds in payment from Ganfeng, completion will take place.
Bacanora will remain as the operator of the project, while Ganfeng will be responsible for leading the engineering, procurement and construction activities.
Ganfeng is continuing to integrate its flow sheet for the production of battery grade lithium into the final engineering design and remains on schedule to deliver its final engineering packages to Bacanora during the first half of this year.
"We are pleased that Ganfeng and Bacanora have agreed terms on the updated joint venture agreements and look forward to completion of Ganfeng's investment to own 50% of the Sonora Lithium project,” said Bacanora chief executive Peter Secker in a statement.
“Their investment further de-risks the project and reduces the equity demands on Bacanora's own shareholders to fund Phase 1 of the project. The Sonora lithium project is now well placed to be in production in 2023 and delivering battery-grade lithium products into the fast-growing energy storage market."