LONDON (Alliance News) - Bacanora Minerals Ltd on Tuesday said it swung to a loss in the third quarter of its financial year due to expenses coming in much higher, meaning its loss for the first three quarters of the year was almost five times greater than the loss posted a year earlier.
The Mexico-focused lithium miner reported a net loss of CAD1.6 million in the third quarter ended March 31, swinging from a CAD98,296 net profit a year earlier. For the full first nine months of the financial year, Bacanora posted a CAD5.5 million loss, widened from a loss of CAD1.2 million for the same period a year earlier.
For the third quarter expenses rose to CAD2.4 million from CAD617,005 million a year earlier, offsetting the gain made in revenue to CAD45,242 from CAD18,108.
The expenses came in higher as general and administrative expenses rose to CAD1.1 million from CAD567,525, due to higher management fees and legal and accounting fees, whilst the company was hit by a CAD1.3 million charge for share based compensation regarding Bacanora's share option plan. No such charge was posted a year earlier.
Bacanora continued to focus on the Sonora lithium project in northern Mexico during the period and it filed the results of a pre-feasibility study for the development of mine and lithium carbonate processing facility at the Sonora project in April. These results showed the "strong economic potential of producing up to 35,000 tonnes of battery grade Li2CO3, and up to 50,000 tonnes of potassium sulphate per year," Bacanora said.
Bacanoa has now commenced a feasibility study for a stage two mine and processing facility to produce up to 35,000 tonnes per year of lithium carbonate at the Sonora project. This is scheduled to be completed in the first quarter of financial year 2017, Bacanora added.
The company noted it was also continuing to upgrade its pilot plant in Hermosillo and was producing lithium carbonate samples for distribution to potential partners in Asia. Discussions are continuing with various Asian offtake partners, banks, debt providers and strategic investors, Bacanora said.
Bacanora raised GBP7.7 million earlier this month through placing 9.8 million units at a price of 79 pence per unit with "certain funds and accounts managed by BlackRock Inc", securing its second major institutional investor.
"Subject to the successful outcome of the feasibility study and project financing, the company's overall timetable could potentially align well with a potential future forecasted supply deficit that is being fueled by growth in innovative technologies such as electric vehicles, energy storage and portable devices," said Chairman Colin Orr-Ewing.
Rare Earth Minerals PLC, which holds a 15.6% stake in Bacanora, noted the results.
Shares in Bacanora were up 0.5% at CAD1.87 on Tuesday, whilst shares in Rare Earth Minerals were up 0.9% at 0.540p.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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