LONDON (Alliance News) - Bacanora Lithium PLC on Monday reported a narrowed annual loss on decreased impairments of exploration & evaluation assets in the period.
For the year ended June, Bacanora recorded a pretax loss of USD12.8 million, narrowed from USD14.3 million recorded the year before.
The AIM-listed lithium development company increased its general & administrative costs to USD7.4 million from USD3.8 million but narrowed its impairment of exploration & evaluation assets to USD559,468 from USD6.2 million the year before.
Bacanora has fully impaired capitalised amounts in relation to a lithium hydroxide test work asset due to the decision to not pursue lithium hydroxide processing in favour of lithium carbonate. As a result, the Magdalena Borate property has also been fully written down.
Resulting in the USD559,468 impairment charge.
Bacanora said the "majority" of its costs increases came from legal and accounting fees related to its corporate re-domicile in the UK from Canada.
The company's cash balance at the end of the period totalled USD13.2 million, down from USD29.9 million the year before.
The drop was caused by USD6.8 million cash used in operations, safety & exploration equipment costs of USD7.9 million and USD2.4 million funding its 50%-owned Deutsche Lithium.
"In our view, the long-term prospects for lithium carbonate prices remain strong. However, prices rarely increase in a straight line, so occupying a position on the industry cost curve that is well below those projects that operate close to or at the marginal cost of production is key," said
Chief Executive Officer Peter Secker.
Secker continued: "Sonora will sit in the lowest quartile for operating cost, marking it a stand-out proposition. Blue-chip institutions of the calibre of RK, SGRF and Hanwa have recognised this and have offered us development capital on attractive terms. Advanced discussions are ongoing with other potential funders, both at the corporate and project levels.
"We are confident that the outstanding funds will be secured which will enable us to move into the construction phase at Sonora. With this in mind, I look forward to providing further updates on our progress, as we focus on realising Sonora's potential and in the process closing the huge disconnect that has opened up between the company's market capitalisation and our flagship project's US$1.25 billion valuation."
Shares in Bacanora Lithium closed down 1.1% Monday at 33.14 pence each.