BCN.L Regulatory News (BCN)

Bacanora Minerals Ltd.

("Bacanora" or the "Company")

Q3 Financial Statements

Bacanora, the London and Canadian listed (AIM: BCN and TSX-V: BCN) lithium and borates company focussed on Mexico, is pleased to announce its unaudited condensed consolidated financial statements for the period ended 31 March 2015, together with the accompanying notes.

Highlights

· Post period appointment of CEO with proven track record of advancing projects up the development curve

· Post period announcement of updated Mineral Resource Estimate ("MRE") for Sonora Lithium project in Mexico:

o Indicated portion of the MRE is 1.12 million tonnes ("Mt") lithium carbonate equivalent ("LCE") contained in 95 Mt of clay, at lithium ("Li") grade of 2,200 ppm;

o Inferred portion of the MRE is 6.3 Mt LCE contained in 500 Mt of clay at a Li grade of 2,300 ppm

o Multiple opportunities to expand the resource significantly

· Positive results from drilling with highlights including intercepts of the Upper Clay range from 26.10 to 50.83 metres in length and those for the Lower Clay range from 12.98 to 23.57 metres on La Ventana

· Progress made on the lithium plant and process design work by engineering consultant Hatch Pty Ltd. ("Hatch") to optimise deliverable product - successful tests have already confirmed product quality

· Lithium market dynamic remains highly positive

Colin Orr-Ewing, Chairman of Bacanora, said, "We have reached the next phase in our development as reflected by the appointment of Peter Secker as CEO, who has a fantastic pedigree of bringing mines into production. We continue to make excellent progress on the ground as emphasised by the drill results and the Updated Mineral Resource Estimate and continue to de-risk the project. We have a defined development strategy aimed at advancing Sonora into production, which benefits from grade, scalability, access to infrastructure and market. Importantly we believe we are in the right commodity at the right time, with the increased interest and usage of lithium particularly in new battery technology, as highlighted by the electric vehicle trends. We are therefore excited about the future and look forward to reporting on our continued development in the coming months."

These statements should be read in conjunction with the statement released on the Toronto Stock Exchange.

Approved by the Board of Directors:

(signed) "Colin Orr-Ewing" (signed) "James Leahy"

Colin Orr-Ewing James Leahy

Director Director

See accompanying notes to the consolidated financial statements.

See accompanying notes to the consolidated financial statements.

BACANORA MINERALS LTD.

Consolidated Statements of Changes in Shareholders' Equity

See accompanying notes to the consolidated financial statements.

See accompanying notes to the consolidated financial statements.

1. CORPORATE INFORMATION

Bacanora Minerals Ltd. (the "Company" or "Bacanora") was incorporated under the Business Corporations Act of Alberta on September 29, 2008. The Company is listed on the TSX Venture Exchange as a Tier 2 issuer and its common shares trade under the symbol, "BCN". The Company's common shares are also traded on the AIM Market of the London Stock Exchange ("AIM"), under the symbol, "BCN". The address of the Company is 2204 6 Avenue NW, Calgary, AB T2N 0W9.

The Company is a development stage mining company engaged in the identification, acquisition, exploration and development of mineral properties located in Mexico. The Company has not yet determined whether its mineral properties contain economically recoverable reserves. The recoverability of amounts capitalized is dependent upon the discovery of economically recoverable reserves, maintaining title in the properties and obtaining the necessary financing to complete the exploration and development of these projects and upon attainment of future profitable production. The amounts capitalized as mineral properties represent costs incurred to date, and do not necessarily represent present or future values.

The Company has generated accumulated losses of $1,232,263 (2014 - $623,732) and the shareholders' equity of its subsidiaries incorporated in Mexico have decreased to an amount less than one third of their share capital which, according to Mexican laws, may be a cause for dissolving a company at the request of any interested third party. If the Company is not able to generate income producing transactions through the identification and exploitation of ores, and continue to raise sufficient capital to continue exploration activities, there is a risk that the rights to the mining concessions could be challenged, however the board considers this normal risk for exploration companies in the region.

2. BASIS OF PREPARATION

a) Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements for the year ended June 30, 2014, which have been prepared in accordance with IFRS as issued by the IASB.

The Company uses the same accounting policies and methods of computation as in the annual consolidated financial statements for the year ended June 30, 2014.

These condensed consolidated interim financial statements were authorized for issue by the Board of Directors on May 29th, 2015.

b) Basis of measurement

These consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments that have been measured at fair value. 

These consolidated financial statements are presented in Canadian dollars. The functional currency of the Company is Canadian dollars and for its subsidiaries is the US dollar.

c) New standards and interpretations not yet adopted

A number of new IFRS standards, and amendments to standards and interpretations, are not yet effective for the period ended March 31, 2015, and have not been applied in preparing these condensed consolidated interim financial statements. None of these standards are expected to have a significant effect on the condensed consolidated interim financial statements of the Company.

3. SIGNIFICANT ACCOUNTING POLICIES

The preparation of consolidated financial statements in compliance with IFRS requires management to make certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note4.

Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company, 70% of its subsidiary, Mexilit S.A. de C.V. ("Mexilit"), 70% of its subsidiary, Minera Megalit S.A de C.V. ("Megalit"), and through its wholly-owned subsidiary, Mineramex Limited, 99.9% of Minera Sonora Borax, S.A. de C.V. ("MSB"), and 60% of Minerales Industriales Tubutama, S.A. de C.V. ("MIT"). Subsidiaries are consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiary are prepared for the same reporting period as the parent company, using consistent accounting policies. All intercompany balances and transactions are eliminated in full. Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance. A change in ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of the Company's financial statements in accordance with IFRS requires management to make certain judgments, estimates, and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results are likely to differ from these estimates. Information about the significant judgments, estimates, and assumptions that have the most significant effect on the recognition and measurement of assets, liabilities, income and expenses are discussed below.

a) Exploration and evaluation assets

The Company is in the process of exploring on its mineral properties and has not yet determined whether the properties contain economically recoverable mineral resource. The recoverability of carrying values for mineral properties is dependent upon the discovery of economically recoverable mineral resource, the ability of the Company to obtain the financing necessary to complete exploration and development, and the success of future operations.

The application of the Company's accounting policy for exploration and evaluation assets requires judgment in determining whether it is likely that costs incurred will be recovered through successful exploration and development or sale of the asset under review when assessing impairment. Furthermore, the assessment as to whether an economically recoverable resource exists is itself an estimation process. Estimates and assumptions made may change if new information becomes available. If, after expenditures are capitalized, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalized is written off in the statement of comprehensive loss in the period when the new information becomes available. The carrying value of these assets is detailed in Note 8.

b) Title to mineral property interests

Although the Company has taken steps to verify the title to the exploration and evaluation assets in which it has an interest, in accordance with industry practices for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Title may be subject to unregistered prior agreements or transfers and title may be affected by undetected defects.

c) Rehabilitation provision

Rehabilitation or similar liabilities are estimated based on the Company's interpretation of current regulatory requirements, constructive obligations and are measured at fair value. Fair value is determined based on the net present value of estimated future cash expenditures for the settlement of decommissioning, restoration or similar liabilities that may occur upon decommissioning of the mine. Such estimates are subject to change based on changes in laws and regulations.

d) Contingencies

Contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events.

e) Share-based payments

The Company utilizes the Black-Scholes Option Pricing Model to estimate the fair value of stock options granted to directors, officers, employees and consultants. The use of the Black-Scholes Option Pricing Model requires management to make various estimates and assumptions that impact the value assigned to the stock options including the forecast future volatility of the stock price, the risk-free interest rate, dividend yield and the expected life of the stock options. Any changes in these assumptions could have a material impact on the share-based payment calculation value.

The same estimates are required for transactions with non-employees where the fair value of the goods or services received cannot be reliably determined.

f) Income taxes

The Company is subject to income tax in several jurisdictions and significant judgment is required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. For the current year these transactions include the transfer of properties between Mexican subsidiaries. Transactions between the Company's Mexican subsidiaries are required by Mexican tax rules to be recorded on an arms' length basis and the Company made estimates as to the measurement of these transactions. The Company recognizes liabilities and contingencies for anticipated tax audit issues based on the Company's current understanding of the tax law. Despite the Company's belief that its tax return positions are supportable, the Company acknowledges that certain positions may potentially be challenged and may not be fully sustained upon review by tax authorities. The Company believes that its accruals for tax liabilities are adequate for all open audit years based on its assessment of many factors including past experience and interpretation of tax law. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events. For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities, and such differences will impact income tax expense in the period in which such determination is made.

5. FINANCIAL INSTRUMENTS

This note presents information about the Company's exposure to credit, liquidity and market risks arising from its use of financial instruments and the Company's objectives, policies and processes for measuring and managing such risks.

a) Credit risk

Credit risk arises from the potential that a counter party will fail to perform its obligations. Financial instruments that potentially subject the Company to concentrations of credit risk consist of accounts and related party receivables. The Company believes that the amount due from the related party is collectible, however as the amount has not been collected subsequent to year end its recoverability is uncertain as it is dependent on the outcome of future events which are inherently uncertain. Any changes in management's estimate of the recoverability of the amount due will be recognized in the period of determination and any adjustment may be significant. The carrying amount of accounts and related party receivables represents the maximum credit exposure.

The Company's cash is held in major Canadian and Mexican banks, and as such the Company is exposed to the risks of those financial institutions. Substantially all of the accounts receivables represent amounts due from the Canadian and Mexican governments and accordingly the Company believes them to have minimal credit risk.

The Board of Directors monitors the exposure to credit risk on an ongoing basis and does not consider such risk significant at this time. The Company considers all of its accounts receivables fully collectible.

b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they became due. The Company's approach to managing liquidity risk is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses. Liquidity risk arises primarily from accounts payable and accrued liabilities and commitments, all with maturities of one year or less.

c) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, commodity prices, and interest rates will affect the value of the Company's financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable limits, while maximizing long-term returns.

The Company conducts exploration projects in Mexico. As a result, a portion of the Company's expenditures, accounts receivables, accounts payables and accrued liabilities are denominated in US dollars and Mexican pesos and are therefore subject to fluctuation in exchange rates.

d) Fair values

The carrying value approximates the fair value of the financial instruments due to the short term nature of the instruments.

6. CAPITAL MANAGEMENT

The Company's objectives in managing capital are to safeguard its ability to operate as a going concern while pursuing exploration and development of its core assets. The Company defines capital as the Company's shareholders equity excluding contributed surplus, of $22,608,688 at March 31, 2015 (2014 - $13,579,674), The Company sets the amount of capital in proportion to risk and corporate growth objectives. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. The Company is not subject to any externally imposed capital requirements other than those disclosed in Note 1. The Company does not expect to enter into any debt financing at this time. The Board of Directors does not establish a quantitative return on capital criteria for management; but rather promotes year over year exploration and development growth. The Company will be meeting its objective of managing capital through its detailed review and preparation of both short-term and long-term cash flow analysis and monthly review of financial results.

7. PROPERTY AND EQUIPMENT

8. EXPLORATION AND EVALUATION ASSETS

The Company's mining claims consist of mining concessions located in the State of Sonora, Mexico. The specific descriptions of such properties are as follows:

a) Tubutama Borate property

The Tubutama Borate project consists of six mining concessions with a total area of 1,661 hectares. The concessions are located 15 kilometres from the town of Tubutama, and are 100% owned by MIT. The project is borate focused, although there is potential for development of gypsum resources on the concessions. The Tubutama property is subject to a 3% gross overriding royalty payable to an arm's length party, and a 3% gross overriding royalty payable to Mr. Colin Orr-Ewing, Chairman of the Company, on sales of mineral products produced from this property.

For the year ended June 30, 2014 an impairment charge of $1,220,826 was recognized in respect of the Tubutama Borate property. As a result of the Company's decision to let certain of the Tubutama concessions lapse and the Company's focus on the other mining claims an impairment test was performed. The recoverable amount is its value in use and is determined to be $nil as the Company expects no cash inflows to arise related to this property despite the potential for development of gypsum resources on the concessions.

b) Magdalena Borate property

The Magdalena Borate project consists of seven concessions, with a total area of 16,503 hectares. The concessions are located 15 kilometers from the cities of Magdalena and Santa Ana, and are 100% owned by MSB. The Magdalena property is subject to a 3% gross overriding royalty payable to an arm's length party, and a 3% gross overriding royalty payable to Mr. Colin Orr-Ewing, Chairman of the Company, on sales of mineral products produced from this property.

c) Sonora Lithium property

The Sonora Lithium Project consists of ten contiguous mineral concessions. The Company, through its wholly-owned Mexican subsidiary, MSB, has a 100% interest in two of these concessions: La Ventana and La Ventana 1, covering 1,775 hectares. Of the remaining concessions, five are owned 100% by Mexilit. The Mexilit concessions consist of El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 2 and cover, in total 5,325 hectares. Mexilit is owned 70% by Bacanora and 30% by Rare Earth Minerals PLC ("REM"). REM made payment of $2,384,775 to acquire the 30% interest in Mexilit. REM's option to negotiate an interest of up to 49.9% of Mexilit under terms yet to be agreed upon expired during the period ended September 30, 2014. The remaining three concessions, Buenavista, Megalit and San Gabriel, cover 87,086 hectares, and are subject to a separate agreement between the Company and REM. At March 31, 2015, REM owns 30% of the common shares of Megalit. REM has the option to negotiate an increase to its interest of up to 49.9% of Megalit under terms and consideration yet to be agreed upon. This option is valid until January 12, 2016. The Sonora Lithium property is subject to a 3% gross overriding royalty payable to Mr. Colin Orr-Ewing, Chairman of the Company, on sales of mineral products produced from this property.

The balance of investment in mining claims as of March 31, 2015 and June 30, 2014 corresponds to concession payments to the federal government, deferred costs of exploration and paid salaries, and consists of the following:

Quarterly Report:

During the period we have made excellent progress in advancing our Mexican focussed lithium and borate portfolio and as a result, we have reached a pivotal stage in the development of the Company as we look to advance from exploration to development and ultimately production.

Sonora Lithium - Operational Update

The Sonora Lithium Project ("Sonora") consists of ten contiguous concessions covering 94,186 hectares and is located approximately 190 kms northeast of the city of Hermosillo, in Sonora State, Mexico, roughly 200 kms south of the border with Arizona, USA. We are focused on building on the excellent progress made to date, and to monetise the Project's significant upside as we advance towards production. We firmly believe we are in the right commodity at the right time thanks to the increasing role of lithium products in industry, including the rapidly growing electric vehicle and rechargeable battery sectors. As a result, global demand is forecast to increase to 280,000 tonnes per annum of LCE by 2020 from 186,000 tonnes per annum recorded in 2013. Currently, 85 per cent. of production is provided by just three companies and notably, M&A activity in this sector is increasing. Importantly, with Sonora's close proximity to infrastructure, its location in a supportive jurisdiction and its large high grade and scaleable resource, we believe that our Company is well placed to capitalise on growing world demand and in the process build substantial value for our shareholders.

The Company is focused on advancing the Sonora Lithium Project through the current pre-feasibility phase. We are confident this process will confirm the world class potential of the Project in terms of its high grades and scalability. With this in mind we recently issued an updated MRE prepared by SRK Consulting (UK) Limited ("SRK") for the 100 per cent. owned La Ventana lithium concessions, and 70 per cent. owned El Sauz, Fleur and Megalit concessions at Sonora which underpins management's confidence in the company-making potential of the project.

Within the updated MRE, the Indicated portion stands at 1.12 Mt of LCE contained in 95 Mt of clay, at Li grade of 2,200 ppm, while the Inferred portion is 6.3 Mt LCE contained in 500 Mt of clay at a Li grade of 2,300 ppm. This latest MRE has been developed using a 3D geological model and Kriged grade estimates. The indicated portion of the MRE will be used for initial open pit mine design while the Company further develops the inferred portion. Encouragingly, SRK's report also highlights considerable scope to further expand upon the MRE significantly.  Conceptual extensions within the current pit shell have the potential to add 2.4 to 4.6 Mt LCE contained in 300 to 350 Mt of clay at a Li grade of approximately 1,500 to 2,500 ppm. Furthermore, this latest MRE (which has been prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101")) does not include identified grade and tonnages contained within the Buenavista concession, which has the potential to add further resources to what is already a major lithium deposit.

In May 2015, the Company announced assay results from a total of 2,946 metres of drilling in 22 holes completed on the wholly-owned La Ventana concession. The lithology from these drill results was included in the updated MRE. Highlights include intercepts of the Upper Clay range from 26.10 to 50.83 metres in length and those for the Lower Clay range from 12.98 to 23.57 metres on La Ventana. Analyses received for 18 of the 22 holes indicate that the lithium content of both Upper and Lower clays increases to the south on La Ventana, as well as maintaining grade and thickness down dip at depth. In particular, weighted averages for lithium content in the Upper Clay Unit varies from 955 ppm Li (0.5 per cent. LCE) over 41.6 metres to 3,215 ppm Li (1.7 per cent. LCE) over 17.48 metres. For the Lower Clay Unit, lithium content varies from 1,143 ppm Li (0.6 per cent. LCE) over 19.20 metres to 5,830 ppm Li (3.1 per cent. LCE) over 20.42 metres. Individual 1.5 metre long samples of clay range up to 10,000 ppm Li (5.32 per cent. LCE). One hole was also drilled on the Fleur concession which intersected 7.16 metres of the Upper Clay unit and averaged 3,107 ppm Li (1.7 per cent. LCE) and 25.30 metres of the Lower Clay, at an average of 4,242 ppm Li (2.3 per cent. LCE). The intercepts from this hole represent an additional mineral resource target area, which Bacanora intends to pursue through further drilling. The proximity of this new discovery to the current mineral resource on La Ventana may allow it to be included as part of the mine planning and mine design work currently being carried out.

Meanwhile first stage reconnaissance geological mapping, prospecting and sampling on the Megalit, Buenavista and San Gabriel concessions), underexplored areas of the project, continues.

Results of the latest drilling programme at the Buenavista concession, which comprised 24 reverse circulation drill holes ranging between 30 metres and 50 metres, identified three kms of strike length of lithium-bearing clays, with lithium values greater than 1,000 ppm Li found in 13 of the 24 holes. The results confirmed that significant thicknesses and grades of lithium-bearing clays occur within the southern part of Buenavista. The northern half of the concession remains untested and based on the Company's experience with similar mineralogy as on the balance of the property, Bacanora believes that it holds potential for similar lithium mineralisation. Management is currently assessing these results to determine whether further drilling is required on the northern part of Buenavista and the adjoining concessions. If it is determined that additional drilling is warranted and is subsequently conducted, the Company would then be in a position to prepare an NI 43-101 resource statement for the Buenavista and adjoining concessions.

In tandem with drilling operations, further progress has been made on the lithium plant and process design work by Hatch Pty, our engineering consultant. Initial work has been completed and Bacanora has received several optimisation and process engineering recommendations for the production of Lithium Carbonate and Lithium Hydroxide. Process Engineering, LLC, of Tucson, Arizona, in association with Ernest Burga, a lithium process engineer, is continuing work on plant design, scale-up and process certification; at this time the "Process Development and Engineering General Design Criteria for Lithium Carbonate Production" document has been prepared and is being populated with the test work results and parameters used as part of the basic engineering data acquisition. Ore-to-product metallurgical test work continues on one tonne bulk ore samples taken from surface exposures on the Sonora Lithium Project. This test work is part of the optimisation work on lithium carbonate recovery and is required to provide design criteria for full size plant and equipment. Process optimisation studies at the Company's pilot plant in Hermosillo have been aided by the addition of a gas-fired rotary calcining unit for roasting lithium-bearing samples as well as resin columns in the lithium carbonate recovery circuit.

The Company continues to advance work on pre-feasibility studies to design a plant capable of potentially delivering up to 50,000 tonnes per year of lithium carbonate. The Company has also started planning for bench scale testing for the recovery of lithium hydroxide. Both of these process design streams are being examined to meet potential new industry requirements from the electric vehicle markets. The Company is actively working with a number of potential off-take customers for its potential lithium compound production.

Magdalena Borates - Operational Update

In tandem with the development of its lithium projects, the Company is also assessing the feasibility of producing up to 25,000 tonnes of boric acid per year from borate minerals from the El Cajon deposit at the Magdalena Borate Project. This is the most advanced of the main borate zones on which the Company has estimated National Instrument 43-101 compliant drill-indicated borate resources of 11 Mt averaging 10.6 per cent. B2O3.

The Magdalena Borate Project consists of seven concessions, covering a total area of 16,503 hectares which are road accessible and located immediately east of the town of Magdalena de Kino. Three main borate zones have been identified on the Magdalena Borates Project: the Cajon Borate Deposit ("Cajon"); Bellota and Pozo Nuevo. Other targets include the Represo prospect, which is a new colemanite discovery that was recently made by Bacanora during a drilling campaign in 2014.

Cajon covers approximately 500 hectares on the southern part of one of the concession blocks. Drilling by Bacanora (48 holes) and a US Borax subsidiary (11 holes) has identified three separate colemanite horizons (units: A, B and C) within the gently south-dipping sediments that underlie the area of El Cajon. The drilling has resulted in an indicated borate resource of 11 million tonnes averaging 10.6 per cent. B2O3 being estimated for El Cajon under CIM resource-reserve criteria. The estimate includes indicated resources, using a cut off of 8 per cent. B2O3, for unit A of 7.5 Mt averaging 10.8 per cent. B2O3, 0.8 Mt averaging 9.0per cent. B2O3 for unit B and 2.7 Mt averaging 10.5 per cent.B2O3 for unit C. The average thickness for each bed making up the three units ranges from 4.2 to 9.8 metres.

Initial metallurgical test work has indicated that a colemanite concentrate grading 38 - 42 per cent. B2O3 can be produced from an average feed of 10.5% B2O3 from El Cajon using a combination of scrubbing, de-sliming and flotation. The Company has constructed a pilot plant to conduct detailed metallurgy and improve the borate content of the colemanite concentrate, as well as finalise a full scale production flow sheet and produce concentrates for test marketing. In addition, the Company has added a boric acid line to the pilot plant.

Potential buyers have expressed an interest in purchasing colemanite from Bacanora should it be able to produce concentrates that meet these consumers' specifications. Alternatively, colemanite can be used as a feedstock in the production of boric acid, a more widely used boron compound.

Recent metallurgical and process tests indicate that lower grade borate resources at and near surface are more amenable to processing to produce boric acid. Consequently, a change in the proposed development strategy to focus on the feasibility of boric acid production is being examined.

Results from the Magdalena drilling programme on the second borate bearing target (Unit B) of Cajon, which consisted of 1,292 metres of drilling and cost approximately CAD $497,000 are being evaluated and will be announced in due course. A mine plan for Unit B, in conjunction with the previous mine plan for Unit A is being formulated based on these results. Studies related to the pre-feasibility are ongoing.

The Company looks forward to receiving and announcing the results of activities that are currently underway on the Magdalena Borate Project as it advances toward determining the feasibility of production of boric acid. The Company expects to announce results and progress on the following activities in the coming months:

· Bulk sampling results for drilling and metallurgical tests of Unit B results;

· Completion of a Pre-Feasibility Study report with:

· Detailed full scale boric acid plant design and costing

· Revised mine plan; and

· Environmental baseline studies and mine permitting activities

Tubutama Borate

The Tubutama Borate project consists of six mining concessions with a total area of 1,661 hectares. The project is borate focused, although there is potential for development of gypsum resources on the concessions. Bacanora has no near term plans for further work on this concession, and has written off the value of this asset during the year ended June 30, 2014.

Outlook

This is an exciting time for Bacanora as we transition from being an exploration to a development company. We have a portfolio of what we believe are world class lithium and borate assets in a stable jurisdiction, each with a defined development path to production. In addition, we have a fully commissioned state of the art pilot plant which includes a laboratory together with equipment and facilities to process and test up to 125 assays per day from samples sourced from the borate and lithium concessions. Having control over processing provides us with a strong advantage, particularly from a time and cost perspective. We have funds in place to complete the on-going pre-feasibility studies at both Sonora and Magdalena which we are confident will not only confirm but also enhance the highly attractive economics of producing at both projects. Finally we have a newly appointed CEO with a proven track record of advancing mining projects up the development curve to production. We are therefore ideally placed to provide shareholders with rare exposure to lithium and borates, two fast-growing markets with highly favourable supply/demand dynamics, both of which are playing crucial roles in innovative industries such as electric cars and energy storage.

For further information, please contact:

ABOUT BACANORA:

Bacanora is a Canadian and London listed minerals explorer (TSX-V: BCN and AIM: BCN). The Company explores and develops industrial mineral projects, with a primary focus on lithium and borates. The Company's operations are based in Hermosillo in northern Mexico and it currently has two significant projects under development in the state of Sonora. The two main assets of Bacanora are: 

· The Sonora Lithium Project, which consists of ten mining concession areas covering approximately 100 thousand hectares in the northeast of Sonora State. The Company, through drilling and exploration work to date, has established an NI 43-101 compliant Indicated Mineral Resource of 1.12 Mt of LCE contained in 95 Mt of clay at a Li grade of 2,200 ppm and an Inferred Mineral Resource of 6.3 Mt LCE contained in 8500 Mt of clay at a Li grade of 2,300 ppm.; and 

· The Magdalena Borate Project, covering 16,503 hectares in Sonora state, Mexico, where the Company's main borate zone, El Cajon, has an Indicated Resource (in accordance with NI 43-101) of 1.17 mt of B2O3, at an eight per cent. cut-off grade. The Company has completed a number of measures to determine the geological and commercial potential of the project and is undertaking a pre-feasibility exercise to determine the economic benefit of developing the mine and constructing a processing plant on site in order to become a supplier of boric acid.