(Alliance News) - Bacanora Lithium PLC on Monday said it hopes to have a review by a new investee completed during the first half of 2020.
In mid-October, Bacanora completed a GBP21.9 million investment from China's Ganfeng Lithium Co Ltd, which now has a 30% stake in the company and a 23% holding in the flagship Sonora lithium project in Mexico.
Ganfeng has now started a review of the hydrometallurgical circuit at Sonora, with a view to sourcing new production equipment from suppliers in China. This review, Bacanora said, is expected to be completed in the first half of 2020.
Once the review is completed, Bacanora will look to finalise the funding package for the project. Bacanora believes the engineering costs of the project remain in line with a feasibility study released in 2018 at USD420 million.
Bacanora has already secured a USD150 million debt facility with RK Mine Finance. It had USD40 million of cash at the end of October.
On the market front, Bacanora noted a number of Australian lithium projects have recently either been delayed, closed, halted, or lowered production, which it believes will strengthen the lithium price as it looks to develop Sonora.
Chief Executive Peter Secker said: "Recent research reports predict the lithium industry would need USD30 billion in investment in upstream capacity to meet its forecast of 1 million tonnes of supply by 2025 (a threefold increase on current levels). In order to secure funding, any new lithium project needs to be low on the operational cost-curve, without having to rely on by-product credits to artificially lower that cost per tonne.
"A project also needs to have reliable engineering cost estimates. A project needs to be of sufficient scale, in a location with a favourable environmental and political climate and deliver a high-grade end product. The Sonora lithium project is one of the very few projects globally that can deliver on all of these factors."
London-based Bacanora shares were 0.9% lower on Monday morning in London at a price of 27.75 pence each.
By George Collard; georgecollard@alliancenews.com
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