Name of the Project
Sonora lithium project.

Location
Sonora state, Mexico.

Client
Bacanora Minerals.

Project Description
A feasibility study on the project has confirmed the positive economics and favourable operating costs of 35 000 t/y of battery-grade lithium carbonate (Li₂CO₃).

The project has measured and indicated mineral resources estimated at five-million tonnes comprising 1.9-million tonnes of measured resources and 3.1-million tonnes of indicated resources of lithium carbonate equivalent (LCE) and an additional inferred mineral resource of 3.7-million tonnes of LCE.

The feasibility study envisages an openpit operation using continuous miners to mine the ore zones and a truck-and-shovel fleet to remove the waste material. An estimated 37.1-million tonnes of ore will be mined over the planned 19-year mine life, with a lithium grade of 4 151 parts per million and an average stripping ratio of about 3.4:1 over the life-of-mine.

The process plant has been designed to initially process 1.1-million tonnes a year of ore during Stage 1 of the project, subsequently increasing to an estimated 2.2-million tonnes a year at Stage 2, producing 17 500 t/y and 35 000 t/y of Li₂CO₃ respectively.

The plant design also includes a circuit to produce up to 30 000 t/y of potassium sulphate and/or sulphate of potash product through a series of evaporation and precipitation stages.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The feasibility study estimates a pretax net present value, at an 8% discount rate, of $1.25-billion and an internal rate of return of 26.1%, with a simple payback Stage 1 of four years.

Value
Stage 1 of the project is expected to cost about $419.62-million and Stage 2 $380.26-million.

Duration
Construction is expected to start in the first half of 2018, with production targeted for the first quarter of 2020.

Latest Developments
Significant progress has been made in the raising of the construction capital needed to build Stage 1 of the Sonora project, with Bacanora announcing a conditional $90-million investment from blue chip investors and a $100-million placing of ordinary shares on July 16.

Existing shareholder Hanwa has entered into a conditional agreement with a new strategic investor for $25-million and the State General Reserve Fund of Oman (SGRF) for another $65-million investment. These investments are conditional on the full $460-million in construction funding required for Stage 1, which will produce 17 500 t/y of lithium carbonate.

Bacanora has also launched a placing for $100-million, which will be used to start construction of the project. The placing is being offered through a bookbuild, with the number of placing shares and allocations at the discretion of the bookrunner, Canaccord Genuity. WH Ireland, Ashanti Capital and Steubing are acting as placing agents in the transaction.

Banora has said that the placing will enable the company to order long-lead items and begin the required civil works as it works towards its stated intention of commissioning the project in the first quarter of 2020.

All required approvals are in place, subject to raising the financing, for Bacanora to begin construction of the project.

Bacanora has previously secured a $150-million senior debt facility from Red Kite Mine Finance.

The combined total of the placing, the proposed SGRF and Hanwa investments, as well as the previously announced RK Facility, is $340-million. Accordingly, the company intends to raise a further $120-milion of funding prior to the end of the first quarter of 2019. 

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Bacanora Minerals, tel +1 403 237 6122, fax +1 403 237 6144 or email info@bacanoraminerals.com.