(Alliance News) - Bacanora Lithium PLC said on Thursday that it has received the first of three approvals in China to sign an offtake agreement and receive investment from Gangfeng Lithium Company Ltd.
The first approval, from the Chinese Ministry of Commerce allows Bacanora to progress to the next two stages "which are currently being processed by Gangfeng", it said.
In June, it was announced that Gangfeng, the world's largest lithium producer by production capacity, would invest GBP14.4 million into Bacanora in exchange for 30% of the company. It will also be able to increase its stake to 50% at a value based on Bacanora's share price at the time, though this option will expire in two years.
Gangfeng will also take a 23% stake in Bacanora's Sonora project in Mexico.
The offtake deal will see Gangfeng take 50% of Bacanora's stage one production, and up to 75% of stage two production.
Shares in Bacanora were down 3.2% at 43.80 pence each in London on Thursday afternoon.