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Bacanora Lithium redraws funding plans for Sonora mine

Planned US$100mln placing dropped due to challenging market conditions

Lithium will power batteries for electric vehicles and storage

Bacanora Lithium PLC (LON:BCN) has scrapped plans for a US$100mln placing to help fund the construction of a lithium mine in Mexico.

The placing was part of the funding for a 17,500 tonnes per annum lithium carbonate operation at Sonora.

READ: Bacanora Lithium looks to Sonora construction phase after equity sales

Bacanora said it will now focus on completing the Front End Engineering Design, while talks are ongoing with several additional parties to find alternative funding.

Sonora’s first phase is expected to cost US$420mln with a further US$40mln needed for working capital.

Red Kite Finance has agreed a US$150mln loan facility, while long-term backer Hanwa and SGRF, the Oman sovereign wealth fund, will put up the final US$90mln once the rest of the construction money has been arranged.

Peter Secker, Bacanora’s chief executive, said challenging market conditions forced the postponement of the placing but the economics of the project were still sound.

“From the perspective of a lithium developer such as ourselves, being a low-cost producer is key to successfully navigating price volatility. 

“Thanks to expected LOM operating costs of US$3,910/t of Li2CO3, once fully operational, Sonora will be among the lower cost producers of battery grade lithium carbonate in the world. 

“Whilst recent fluctuations in lithium pricing forecasts continue, the development of the Sonora project remains our priority. 

“Thanks to the combination of a large lithium resource, conventional processing techniques, and having all relevant approvals in place, Sonora is a highly valuable strategic asset.”


Quick facts: Bacanora Lithium Ltd

Price: 43.5 GBX

Market: AIM
Market Cap: £1.44 m

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