London-listed Bacanora has secured an in-principle undertaking from battery chemicals trader Hanwa to extend its lithium offtake agreement, which will underpin an expansion of the Sonora lithium project, in Mexico, to 35 000 t/y.
The offtake agreement will be extended by another five years at a rate of 17 500 t/y of lithium carbonate on the same terms as the initial five-year offtake, Bacanora CEO Peter Secker reported on Monday, stating that formal documentation would be completed shortly.
He added that discussions for additional strategic partners for extra Stage 2 tonnages were continuing.
Construction of the lithium carbonate plant, which will have a capacity of 17 500 t/y in Stage 1, is set to start later this year, with commissioning set for 2020.
The company will update the project’s schedule at the end of the front-end engineering design (FEED) process, which is currently under way.
Bacanora reported that the FEED of the roaster/kiln and the crystalliser/evaporation/IX, which account for about 75% of the total capital cost of the processing plant, were advancing, following the delivery of bulk lithium samples from Sonora to selected vendors.
The company added that detailed discussions with engineering, procurement and construction groups for all other parts of the processing plant were also ongoing.
The current FEED schedule is to have designs, cost estimates and process guarantee scopes substantially completed by end June, with orders for long lead items to be placed at the end of the FEED process in the third quarter.
The project will require $450-million to build, which Bacanora is securing through debt and equity project financing.
Shares in Bacanora gained 3.5% on Monday.