Bcn28 Feb 2017 07:09
Operational
· Continued progress made with ongoing feasibility study ('FS') at the Company's Sonora lithium project ('Sonora') in Mexico - expected to be completed in late summer 2017
· FS is focused on an operation at Sonora capable of initially delivering 17,500 tonnes per year of battery-grade lithium carbonate (Li2CO3) for the first two years of operations, followed by 35,000 tonnes Li2CO3 pa thereafter
· Successfully completed a 4,000 metre infill drilling programme to upgrade a portion of the current Mineral Resource from the Indicated to Measured category, in conjunction with geotechnical and hydrological drilling for the FS
o Sonora currently has a large Indicated Resource currently comprised of 259 Mt averaging 3,200 ppm Li for 4.5 Mt of lithium carbonate equivalent ('LCE')
o Resource model currently being updated by SRK Exploration Ltd
· Ongoing refinement and optimisation of the lithium carbonate flow sheet developed at the Pilot Plant operations in Hermosillo in line with strategic focus on the larger lithium carbonate supply chain in Asia, rather than the smaller lithium hydroxide market
· The Pilot Plant continues to produce battery grade lithium carbonate samples which are being sent to potential off-takers and customers in Asia
o Discussions with potential off-take partners including site visits are ongoing
· The Company is fully financed through to the completion of the FS
Post Period
· Acquired 50% interest in, and joint operatorship of, the Zinnwald Lithium Project ('Zinnwald') in southern Saxony, Germany from SolarWorld AG ('SolarWorld'), the largest solar panel producer in Europe
· Acquisition is in line with management's vision to become a global lithium operator focused on projects with significant value accretion potential and defined markets at both the product and geographic levels
· Zinnwald, which reportedly produced lithium carbonate in the 1950s, provides Bacanora with a potential entry point into the thriving market for lithium in Germany and Europe, which is being driven by the automotive, renewable energy storage and chemicals industries
· Bacanora will earn 50% of the project in return for a cash consideration of €5 million and the completion of a Feasibility Study which is anticipated to cost approximately €5 million and to take approximately 18-24 months to complete.
o The Company has an option to acquire the outstanding 50% held by SolarWorld within a 24 month period for €30 million
Corporate
· Appointment of Mark Hohnen, Non-Executive Director of the Company, as Chairman of the Board
o James Leahy, interim Non-Executive Chairman, resumed his role as Non-Executive Director of the Company
· Appointment of Ray Hodgkinson, who has substantial public company and natural resource experience, as a Canadian based Non-Executive Director of the Company - Mr Hodgkinson pr
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