Another good update... We just need to see a replacement for Nextview.
Sonora Project Update
Bacanora Lithium plc (AIM: BCN), the London listed lithium company, is pleased to provide an update on activities at its flagship Sonora Lithium Project in Mexico ('Sonora' or 'the Project'). This update is in line with the Company's objective to commence the construction of a 35,000 tpa lithium carbonate operation at Sonora in H1 2018, targeting first production in Q1 2020. A recently completed Feasibility Study ('FS') demonstrated Sonora's potential to become a leading supplier of high value lithium products to fast-growing industries, such as electric vehicles and energy storage. The FS demonstrated strong economics of US$1.25billion NPV; 26.1% IRR; and life of mine gross operating costs of US$3,910/t Li2CO3, which are comparable to those of the low cost brine producers of South America.
Front End Engineering Design (FEED) and EPC/EPCM Engineering
Design of both the roaster/kiln FEED and the crystalliser/evaporation/IX FEED has commenced following the delivery of bulk lithium samples from Sonora to selected vendors. These two equipment packages are expected to comprise approximately 75% of the total capital cost of the processing plant.
Bacanora is in detailed contract discussions with EPC/EPCM engineering groups for all other parts of the processing plant in order to finalise the project cost and to complete budget and timetables in conjunction with completion of the FEED engineering packages.
The current FEED schedule is to have designs, cost estimates and process guarantee scopes completed in Q2 2018 with orders for long lead items being placed at the end of the FEED process. The current timetable is based on commissioning and lithium carbonate production commencing in Q1 2020 and will be updated at the end of the FEED process.
Project Approvals: Water Licences
Water licence permits covering the Sonora Lithium Project have been granted by the Comisión Nacional Del Agua ('CONAGUA'). This follows the granting of the 'Manifestacion de Impacto Ambiental' ('MIA') environmental permits and the completion of the land acquisition agreements for the purchase of the surface land over the Sonora project area in Q4 2017.
It is currently envisaged that LNG gas supplies will be initially utilised at Sonora during the early stages of commissioning whilst gas consumption is low. Once energy consumption reaches steady state, pipeline supply to the Project will be initiated. The Company is in detailed discussions with a number of potential Build, Own and Operate (BOO) energy partners for the gas pipeline development to the Project along with the finalisation of the proposed natural gas pipeline routes. Detailed quotes for the supply of LNG are also currently being evaluated.
As previously announced, the Company entered into a binding placing letter (the "Placing Letter") with NextView New Energy Bull HongKong Limited ("NextView") in December 2017 and as announced on 28 February 2018, although the Company had fulfilled all of its obligations in respect of the Placing as of that time, NextView failed to forward the Placing proceeds to the Company, leaving it in default under the terms of the Placing Letter.
In spite of repeated efforts on the part of the Company requesting that NextView remedy its continuing default, NextView has continued to fail to complete the Placing as contemplated under the Placing Letter. Accordingly, the Company has terminated the Placing Letter and has reserved its rights to pursue any available legal remedies against NextView.
The Feasibility Study estimated the capital cost for the Stage 1 production of 17,500tpa of lithium carbonate at Sonora at US$420M. The Company continues to finalise its debt and equity financing strategy with Canaccord and its other financial advisors.
Although it'd be good to get some news on a replacement cornerstone investor...
Bacanora Lithium plc (AIM: BCN), the London listed lithium company, is pleased to provide an update on activities at its 50 per cent. owned Zinnwald lithium project ('Zinnwald Lithium Project') in southern Saxony, Germany where a feasibility study is underway to develop a strategy to demonstrate the economic viability of producing higher value lithium products for the European battery and automotive sectors. The Company also gives an update on corporate activity, including confirmation of its re-domicile to the UK.
Zinnwald Lithium Project
The feasibility study for the Zinnwald Lithium Project in Germany continues on schedule. Following the completion of the infill drilling programme in December 2017, assay results are currently being collated. Work for the purposes of updating the resource estimate in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ('NI 43-101') will commence in Q2 2018 and will be followed by mine design and mine planning activities.
Work on the processing flow sheet has progressed through the crushing, grinding and magnetic separation stages and roasting testwork is now underway. Once this work is completed the metallurgical testwork will focus on the production of high value downstream lithium products, facilitated by access to product reagents from the chemical industries located in Dresden. The feasibility study remains on track for completion in Q2 2019.
They're in the process of being 're-domiciled' basically moving the stock from one index to another. I think they were on the Canadian indexes and are moving to the AIM. It was quite worrying when I looked at my SIPP!
Cobalt is also needed, i think Glencore is planning on doubling production of Cobalt in the future, may need to re-visit Glencore too. https://www.bloomberg.com/news/articles/2017-12-12/glencore-to-double-cobalt-output-as-electric-cars-drive-demand
Hoping they can sort this finance issue out. Mr hindsight says I should have cashed out at 75% profit.
Having bought in recently, I'm losing in the short term but Lithium has got to be a winner in the long term. Unless there's a sudden huge change in battery technology demand is only going to increase and supply will struggle to keep up. basic economics tells me that the price of Lithium will rise. I'm hanging in there. It's a buying opportunity for the courageous.
We may have gone backwards, but it sounds like we are better off without them, if they can't cough up at this stage. As I said yesterday, you'd like to think that we can at least be compensated for the time wasted and get a few mill extra in the bank. It would be good to get some news, but I assume the Board saw this one coming and have a few other irons in the fire.
Good to see blue after that kind of announcement. I wonder if there's some kind of penalty for those chancers not fulfilling their obligations. It'd be nice to get a million or two in the pot after they wasted everyone's time.
Think SP was down at 80p at one stage. The RNS has clearly had an effect on SP but long term investors etc I suspect see this as a buying opportunity and many have piled in. Had they not done so I guess SP would have tumbled much more. Not an ideal situation admittedly but hopefully management will pull something out of the hat! I intend buying a few more once the dust settles.
Bloomberg New Energy Finance (BNEF) says that sales in electric battery vehicles in the third quarter (Q3) of 2017 was 287,000 units, up 63% from the same period in 2016. This gives a nine month total of 350,000 vehicles sold between January and the end of September 2017. BNEF says that by 2030 global electric vehicle sales will be in excess of 24 million units annually.
So where will the lithium come from? This is the metal that, at the moment, is critical in transportable battery composition.
Expectations among the mining community is that, while it seems Earth has enough lithium to go around, BNEF says that lithium ion battery manufacture over the next 12 years will require 1% of the worlds supply. The big question is where are the new mines to bring this supply on?
London and Toronto-listed Bacanora Minerals has just passed a significant milestone with the publication of the feasibility study from its Sonora lithium mine in Mexico. Indicating a net present value of $1.25 billion in resource, CEO Peter Secker tells IG that its cost of production is in the lowest quartile at $4000 per ton. With lithium prices currently around $13,000 per ton, the internal rate of return (IRR) is 26%.
So what does Bacanora have to do to begin production? Secker is hopeful that, subject to the funds being available and the project working to schedule, that production will begin in the first quarter of 2020.
Recently, Bacanora has seen some big names take a position in the company; BlackRock, M&G, Hanwa and Igneous each with a 10% holding, and Capital Group on 7%. Secker says he hopes that those shareholders will provide strong support when it comes to raising the $420 million in capital expenditure needed to fund the mine works.
Once up and running, Bacanora fully expects that all of its lithium production will go to Asia, where, according to Secker, 95% of all lithium ion batteries are made. Does he see demand from US electric car giant Tesla? No, the companys focus will concentrate on supplying producers in China and Japan.
With its market capitalisation at £139 million, finding the funding could be critical to the future direction of Bacanoras share price.
That's very useful & helpful information - thank you. I didn't realise that a lithium ETF existed!
(If SELL appears on this, please ignore; should be HOLD but my computer insists on providing sell as the only option )
Expecting a re rating to circa £2 on a successful financing plan
Bacanora Minerals said it would re-commence the process of changing the domicile of jurisdiction from Canada to the UK.
The company said it intends to raise a significant amount of new debt and equity financing to fund its growth as an international lithium company with new projects in Mexico and Germany and believes that a UK domiciled company with its primary listing on AIM is the best way to achieve this.
The company's efforts in September 2016 to re-domicile from Canada to the UK was unsuccessful as it failed to obtain shareholder approval to proceed with the move.
At 8:45am: (LON:BCN) Bacanora Minerals Ltd Ord Npv di share price was -6.5p at 101.5p
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