SP Angel Morning view6 Jun 2019 09:20
Bacanora Lithium (BCN) 27.3p, Mkt Cap £36.6m – Feasibility study positive economics for Zinnwald Lithium
Lithium developer announce results for the NI 43-101 Feasibility Study for the Zinnwald Lithium project in Germany, confirming positive economics for the production of 5,112tpa (~7,285tpa LCE) of battery grade lithium fluoride – a high value, downstream product consumed in the manufacture of lithium battery electrolyte.
Bacanora acquired an initial 50% interest in Deutsche Lithium in February 2017 and has the option to acquire the outstanding 50% that it does not own. The Company announce it has reached an agreement with the administrators of SolarWorld AG, which holds the remaining 50% interest, to extend the Option period from August 2019 to February 2020.
The Zinnwald project hosts 35.51Mt ore grading 3,519ppm for 125kt of Li. Exploration upside focuses on ‘Falkenhain’ and ‘Altenberg DL’ claims, which have the potential to significantly increase Zinnwald’s resource base and project life.
Total Mineral Reserve for the Feasibility estimate 31.2Mt ore at a grade of 3,004ppm containing 94kt lithium.
An integrated conventional flow sheet utilised an established sulphate route for approx. 570,000tpa ore for capital cost €159m, including mining, processing plant, infrastructure, tailings management, general administration costs as well as the requisite contingencies.
FS includes sale of 32,000tpa of by-product potassium sulphate to the European fertiliser industry.
Base case modelling indicates a 30-year life of mine, which equates to revenue and EBITDA estimated at €3.86bn and €1.75bn respectively.
Project NPV provides €270m with a project payback of 6.1 years, for IRR 21.5%.
CEO, Peter Secker, adds “We are already working hard to secure strategic partners to develop the Project and we are actively considering a public listing for Deutsche Lithium, our 50%-owned subsidiary that holds Zinnwald, to help achieve our aim.”
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