(Sharecast News) - Bacanora Lithium updated the market on the strategic investment by Ganfeng Lithium on Monday, having confirmed on 28 June that the signed investment and offtake agreements, which together make up the investment, were submitted to the relevant authorities in China for approval.
The AIM-traded firm said completion of the last of the relevant approvals had now been obtained, and Bacanora had now received the £21,963,740 of funds from Ganfeng in exchange for a 29.99% equity interest in Bacanora Lithium and a 22.5% joint venture investment directly in the Sonora Lithium Project.
It said it expected that the 57,600,364 shares in Bacanora would be admitted to trading on or around 18 October.
"Ganfeng has recently announced its intention to proactively advance the development of Bacanora's Sonora lithium clay project during the second half of 2019," the Bacanora board noted in its statement.
"This is in addition to work being undertaken by Ganfeng in China, Australia and Argentina as part of a series of planned manufacturing capacity expansions to capitalise on the growing demand for lithium and solidify its leading position in the lithium products industry."
In China, it said work was continuing to increase the capacity of Ganfeng's battery-grade lithium carbonate production line in Ningdu County, Jiangxi Province, which had reached its 17,500 tonnes per annum designed capacity and achieved its 2019 production targets.
It also said Ganfeng was intending to build a battery-grade lithium hydroxide production line with a 50,000 tonnes per annum capacity at Basic Lithium Plant in Xinyu, with commissioning targeted in 2020.
"These initiatives will support Ganfeng's target of 200,000 tonnes per annum lithium carbonate equivalent production capacity by 2025, although final capacity expansion will be based on changes in, and assessment of, future market demand for lithium products."
Looking at the Sonora Project, the company said its project team in Mexico was continuing to progress the final design work for the mine, concentrator and kiln sections of the processing plant.
The Ganfeng technical team had initiated work on the hydrometallurgical circuit, and was reviewing sourcing key sections of the lithium production equipment from current equipment suppliers in China.
Bacanora said battery-grade lithium demand was continuing to be driven by electric vehicle, explaining that in Australia, recent lithium concentrate market conditions had driven "numerous" concentrate producers to reassess production plans.
"This strongly supports Bacanora's strategy for the development of the Sonora lithium project as a fully-integrated mine and downstream processing facility to produce final lithium products in the lowest operating cost quartile," the board explained.
3 Mar 2016 07:02