Name of the Project
Sonora lithium project.

Location
Sonora state, Mexico.

Project Owner/s
Sonora Lithium, a subsidiary of Bacanora Lithium.

Bacanora is building the project together with its joint venture (JV) partner Ganfeng Lithium.

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.

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 lithium carbonate 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
The company continues to develop its community engagement strategy on the education, training and development of the local workforce as the project transitions through the development stage into operations in 2023.

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.

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

Planned Start/End Date
The JV partners are aiming to start production in 2023.

Latest Developments
Bacanora has started initial site activities at the Sonora project.

This milestone follows the company's successful $65-million fundraise, which, in combination with existing cash and the undrawn portions of its debt financing facility, will finance Bacanora's 50% share of the capital cost required for Stage 1 of the Project.

Bacanora has engaged a local specialist ecological services company, based in Sonora, to begin initial site works. These activities will involve the rescue and removal of surface vegetation and topsoil in the area required for the construction of the lithium processing plant. These activities are being performed in compliance with its obligations pursuant to its environmental approvals. The excavated material will be stockpiled at a location adjacent to the plant site and stored in an approved manner so that it can be incorporated into the future project rehabilitation schedule. A team of 15 personnel has been deployed to site, including two ecologists, a biologist and a forestry engineer. The majority of these personnel reside in the local area.

The Bacanora construction team has started the preparatory work required to upgrade the main access road to the site to provide access for heavy equipment to start the bulk site earthworks later in the year. The tender process for this work has started and is focusing on using local construction and engineering groups from the surrounding Sonora region. Work is also under way to start the tender process for the site accommodation and ancillary facilities, scheduled to be commissioned by the end of the second quarter of 2021.

Meanwhile, the transmission of engineering drawings and documentation from Ganfeng and its equipment suppliers, in China, has started; the final engineering packages will be delivered to Bacanora in the second quarter of 2021. Bacanora is working with its principal equipment suppliers to finalise a schedule for the delivery of the larger items of processing equipment in 2022. As part of this schedule, orders for the larger items of process equipment that have delivery schedules over 12 months will be placed during the third quarter of 2021 for delivery to site in late 2022.

Key Contracts, Suppliers and Consultants
Ganfeng (EPC).

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