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Bacanora Lithium higher as it tees up US$150mln loan for first phase at Sonora project

RK Mine Finance is putting up the money, which will cover a sizeable chunk of the cost of an initial 17,500tpa lithium carbonate operation

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Bacanora Lithium Ltd (LON:BCN) shares rose on Thursday as the firm agreed a US$150mln loan for the construction of the first phase of the mine at Sonora in Mexico.

RK Mine Finance is putting up the money, which will cover a sizeable chunk of the cost of an initial 17,500tpa lithium carbonate operation.

READ: Bacanora Lithium shares jump as it announces five-year off-take contract extension with Japan's Hanwa

A feasibility study estimated the capital cost for this first phase operation at US$420mln.

In addition, Bacanora estimates that a further US$40mln will be required for working capital.

Talks are ongoing with off-take partner Hanwa, a Japanese trading firm, and other strategic, long-term investors for the additional funding.

In early morning trading, Bacanora shares were 6.3% higher at 92.5p.

Highly competitive facility

Peter Secker, chief executive, said the costs and terms of the facility were highly competitive compared to other debt packages recently been reported for greenfield lithium projects in Canada and Australia.

The facility has been structured as two bonds. The main bond has a six-year term and will be issued at a price of US$138mln with a nominal value of US$150mln.

The second bond has a nominal value of US$56mln and US$12mln purchase price, a zero coupon and is repayable over twenty years.

RK Finance will also be granted six million warrants.

Kiran Morzaria, CEO of Cadence Minerals Plc (LON:KNDC), which has around an 8% stake in Bacanora commented that “we are genuinely excited that Bacanora has secured a senior debt funding package of this size."

 -- Adds share price, Cadence Minerals comment --

Quick facts: Bacanora Lithium Ltd

Price: 21.65 GBX

AIM:BCN
Market: AIM
Market Cap: £48.28 m
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Bacanora Lithium advancing Sonora debt and equity financing

Peter Secker, chief executive of Bacanora Minerals Ltd (LON:BCN) caught up with Proactive's Andrew Scott to update on financing discussions for the Sonora lithium mine in Mexico. Secker says they're still on track to begin production in the first quarter of 2020 and is expecting...

on 13/4/18

2 min read