Bacanora Lithium PLC - Conditional Sale of interest in Deutsche Lithium
Bacanora Lithium plc
("Bacanora" or the "Company")
Conditional Sale of interest in Deutsche Lithium to Erris Resources Plc
Further to the announcement of
Erris has today published an admission document in relation to the proposed acquisition of Bacanora's 50% interest in DL, which is available to view and download on the Erris website at https://www.errisresources.com/ .
The main asset owned by DL is the Zinnwald Lithium Project ("Zinnwald" or the "Project"), located in
Under the SPA, Bacanora will be selling its 50% share in DL plus
The remaining 50% of DL is owned by the administrators of SolarWorld AG ("SolarWorld") which entered administration in
The SPA provides that Erris will grant Bacanora a royalty of 2% of the net profits earned by Erris which relate to its 50% shareholding in Deutsche Lithium and its sale of lithium products or minerals particularly in relation to Zinnwald. The royalty agreement provides that the royalty will be paid to Bacanora for an initial 40-year term and Erris has the right to extinguish the agreement by paying Bacanora a one-off payment of
In accordance with AIM Rule 7, Bacanora will be subject to a lock-in period during which it cannot dispose of its shareholding in Erris for one year from the date of admission of the Consideration and Placing Shares to AIM. Bacanora will also enter into a relationship agreement with Erris whereby it will undertake that, for so long as it is interested in more than 25% of Erris's voting share capital, it will not act to unduly influence Erris or the Erris board and will ensure that transactions entered into with Erris are on an arms' length basis. As part of this relationship agreement, Bacanora has the right to appoint one director to the board of Erris, whilst its shareholding is between 20% and 45%. Following completion of the Proposed Transaction, Bacanora's initial appointee will be its Chief Executive Officer,
Erris was established in 2012 as a mineral exploration and development company and its focus has been to create shareholder value through the process of discovering new ore deposits, with a focus on European jurisdictions. Its ordinary shares were admitted to trading on AIM in
Erris currently has three main projects, the Loch Tay Gold project in
Zinnwald is in a granite hosted Sn/W/Li belt that has been mined historically for tin, tungsten, and lithium at different times over the past 300 years. With an abundant supply of fluorspar/hydrofluoric acid available in the immediate vicinity, Deutsche Lithium has chosen to focus on Lithium Fluoride ("LiF") production. LiF is a high value downstream lithium product and one of the two key components in the manufacturing process of LiPF6, which is the most important conducting salt in lithium electrolytes and serves as the "shuttle" in the battery electrolyte which "ships" the lithium ion between the cathode and the anode. Approximately 95% of all lithium battery electrolytes use LiPF6, and the percentage used in each cathode is increasing in newer battery types. The strategic location of the Project allows access to the German automotive and downstream lithium chemical industries.
The 30-year Feasibility Study mine plan equates to the extraction of less than 50% of the currently identified resource.
• Measured plus Indicated Mineral Resource estimate containing 35.51 Mt at a grade of 3,519 ppm containing 124,974 t Li at cut-of grade of 2,500 ppm Li
• Represents approximately 665,000 tonnes of LCE, comprising 357,000 tonnes of LCE in Measured Resources and 307,000 tonnes of Indicated Resources
• Estimated Inferred Mineral Resources of 4.87 Mt at a grade of 3,549 ppm containing 17,266 t Li metal (approximately 92000 tonnes LCE)
In addition to the mining licence in relation to the Project, DL holds two other exploration licences; the Falkenhain licence (covering 295.7 ha and with a 5-year term to
For further information please visit www.bacanoralithium.com or contact:
Bacanora Lithium plc
Cairn Financial Advisers LLP, Nomad
+44 (0) 20 7213 0880
Citigroup Global Markets, Joint Broker
+44 (0) 20 7986 4000
Canaccord Genuity, Joint Broker
+44 (0) 20 7523 8000
Tavistock, Financial PR Adviser
+44 (0) 20 7920 3150
+44 (0) 77 8855 4035
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014
Notes to editors
Bacanora Lithium Plc is an AIM-listed (ticker 'BCN') lithium development and exploration company. The Company is focused on building, in collaboration with its major shareholder and offtake partner, Ganfeng Lithium (the world's largest lithium metals producer), a 35,000 tonne per annum open pit battery grade lithium carbonate operation at its flagship asset, the Sonora Lithium Project in
Sonora Lithium Ltd ("SLL") is the operational holding company for the Sonora Lithium Project and owns 100% of the
On completion of its agreement with Erris Resources Plc, the Company will own 44.3% of Erris, which in turn will have a 50% interest in the Zinnwald Lithium Project and the Falkenhain and Altenberg Licences in southern Saxony,
Cautionary Statement Regarding Forward-Looking Information
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: commodity price volatility; general economic conditions in the
The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.
The contents of this announcement have been prepared by and are the sole responsibility of Bacanora.
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