BCN.L Share News (BCN)

(Sharecast News) - Exploration and development company Bacanora Lithium updated the market on activities at its Sonora Lithium Project in Mexico on Thursday, reporting that the pilot plant had completed the bulk sampling required for the plant and engineering designs.
The AIM-traded firm said the samples had been sent to its relevant partners in the United States and China for optimisation of the final designs.

It said all engineering work was now being undertaken off-site, with GR Engineering having completed its concentrator design work, to integrate into the overall project scope.

"Importantly, the company's joint venture partner Ganfeng Lithium has also completed its flow sheet design testwork for the production of battery grade lithium from the samples provided by the pilot plant," the board said.

"Ganfeng is now integrating these results into a larger scale design, and remains on schedule to deliver its final engineering packages at the end of the fourth quarter.

"Lastly, Ganfeng is working with its equipment suppliers to determine equipment delivery times and process guarantees."

Bacanora said it therefore remained on schedule to begin initial site works at Sonora in the first half of 2021, subject to the completion of financing, which would enable the start of production at the plant in 2023.

That timeframe would coincide "well" with the expected increase in lithium demand from European, Asian and US electric vehicle manufacturers, the board claimed.

Bacanora also noted that the number of new Covid-19 cases was continuing to fall in the Sonora district of Mexico, with lockdown restrictions slowly being lifted.

New health and safety protocols and social distancing would remain in place at the pilot plant for the foreseeable future, but would apparently not impact the firm;s ability to continue to work on site.

"Most of the larger scale mining operations within the Sonora district are now back in production, and Bacanora will have employees back in the field in October to survey site access roads in preparation for site access works in the second quarter of 2021."

Recently, the federal government implemented austerity measures as a result of Covid-19, one of which is the restructuring of several undersecretary positions in various sectors, including that for mining.

The functions, staff, and responsibilities of the areas that reported to the undersecretary for mining remained intact, and would continue to function as normal, under the responsibility of the Secretariat of the Economy, the board explained.

"President Andrés Manuel López Obrador and the Secretariat of the Economy have consistently supported investment in the mining sector, and specifically projects with downstream applications, such as Bacanora's Sonora Lithium Project," it explained.

"This government-wide austerity measure does not represent a change in those policies."

Finally, Bacanora noted that recent forecasts from Chile - the world's largest producer of downstream battery-grade lithium products - indicated that as electric vehicles sales in Europe and China continue to rebound after the Covid-19 downturn, the electric car industry was forecast to dominate demand for lithium over the next 10 years.

"By 2030, electric vehicle demand will account for more than 75% of consumption, up from 30% in 2019.

"As a result, demand for lithium for electric vehicles would surge to 1.4 million tonnes by 2030, almost a five-fold increase from the current 300,000 tonnes of demand in 2019."

At 1602 BST, shares in Bacanora Lithium were up 1.14% at 21.74p.