Bacanora Lithium Plc (LON:BCN) has described 2019 as a critical year that has seen a number of significant developments which have added value for shareholders.
In a statement, ahead of today’s AGM, the company noted that it had secured one of the world's biggest lithium producers - Ganfeng Lithium - as a cornerstone investor - with a 29.9% shareholding. Ganfeng also took a 22% direct stake in the company's flagship Sonora mine development project in Mexico.
Bacanora secured 100% of the required funding for the Sonora’s stage-1 production, via two guaranteed offtake agreements - with Ganfeng and Hanwa as buyers - along with 75% of the funds for stage 2 - via Ganfeng.
The company also noted the longstanding support from its earliest institutional investor M&G, which increased its holding to 19.9%.
"Each of the key milestones achieved over the past 12 months demonstrated increased shareholder value and moves us ever closer to production, further distinguishing us from our peers,” Mark Hohnen, Bacanora's chairman said in the statement.
“The considerable institutional and industry backing we continue to receive is testament to the robust economics of Sonora. Ganfeng is now the largest shareholder in the company and is also a joint-venture partner in Sonora.
“Ganfeng has embarked on a technical review of the hydrometallurgical circuit of the processing plant, with a view to potentially sourcing key sections of the production equipment from Chinese suppliers and is expected to be completed in H1 2020. Both Bacanora and Ganfeng are also developing testwork programmes to evaluate the potential to produce other high-value lithium products at Sonora in addition to battery-grade lithium carbonate,” he added.
Away from Sonora, Bacanora has also advanced the Zinnwald lithium project in Germany as it completed a feasibility study.
“With a Feasibility Study for a 5,112 tonne per annum (~7,285 tpa LCE) of battery-grade lithium fluoride operation, project NPV of €428mln, an IRR of 27.4%, and a resource of 124,974 tonnes of contained lithium, Zinnwald's potential to supply the European market with high-value lithium products is clear,” Hohnen said.
“Discussions with strategic partners with a view to funding the €159mln capital cost of the project are ongoing.”
The Bacanora chairman also told investors that the company is “well placed” to complete the financing package for Sonora in the first half of 2020 and the focus is on starting production at the project at the earliest opportunity.