BCN.L Regulatory News (BCN)

Bacanora Lithium plc / Index: AIM / Epic: BCN / Sector: Natural Resources

Bacanora Lithium plc ("Bacanora" or the "Company")

AGM Update

Bacanora Lithium plc (AIM: BCN), the London traded lithium company, is holding its Annual General Meeting ('AGM') later today. During the AGM, Bacanora Chairman, Mark Hohnen will update shareholders on key milestones achieved over the past 12 months, specifically with regards to the Company's flagship lithium project in Sonora, Mexico ('Sonora' or the 'Project').

Highlights for the year 2019

2019 has been a critical year for Bacanora and is one that has resulted in a number of significant developments that have continued to add incremental shareholder value over the past 12 months. These developments include:

·; Securing one of the world's biggest lithium producers, Ganfeng Lithium Co., Ltd. ('Ganfeng'), as a 29.9% cornerstone investor

·; Securing Ganfeng as our joint-venture development partner with a 22.5% direct investment in Sonora

·; Securing 100% of Stage 1 production at Sonora under two guaranteed offtake agreements with Ganfeng and Hanwa and 75% of Stage 2 production with Ganfeng

·; Continued longstanding support from our earliest institutional investor M&G Plc ('M&G') who increased their investment in Bacanora to 19.9%

·; Completion of a Feasibility Study for the Zinnwald Lithium Project in Germany

"Each of the key milestones achieved over the past 12 months demonstrated increased shareholder value and moves us ever closer to production, further distinguishing us from our peers. Indeed, in the 12 months since our last AGM, the Bacanora share price has increased by 25%, compared with our lithium peers who have seen share price declines of between 10% and 74%.

"In order to appreciate the value of our Company, it is important to understand what first attracted Ganfeng and M&G to Bacanora and our world class Sonora Lithium Project in Mexico. I believe this includes Sonora's large scale and high grade resources, proven processing route, robust economics, strong shareholder base, a management team with a proven track record of delivery, a supportive jurisdiction, and access to end markets. Sonora is set to be one of the lowest cost operators in the industry at around US$4,000/t production cost. This low-cost profile is a significant advantage at a time when Australian hard rock producers' higher cost production models are coming under increasing pressure as a result of falling spodumene prices.

"The considerable institutional and industry backing we continue to receive is testament to the robust economics of Sonora. Ganfeng is now the largest shareholder in the Company and is also a joint-venture partner in Sonora. Ganfeng has embarked on a technical review of the hydrometallurgical circuit of the processing plant, with a view to potentially sourcing key sections of the production equipment from Chinese suppliers and is expected to be completed in H1 2020. Both Bacanora and Ganfeng are also developing testwork programmes to evaluate the potential to produce other high value lithium products at Sonora in addition to battery-grade lithium carbonate.

"Our confidence extends to our Zinnwald project in Germany. With a Feasibility Study for a 5,112 tpa (~7,285 tpa LCE) of battery-grade lithium fluoride operation, project NPV of €428 million, an IRR of 27.4%, and a resource of 124,974 tonnes of contained lithium, Zinnwald's potential to supply the European market with high value lithium products is clear. Discussions with strategic partners with a view to funding the €159 million capital cost of the project are ongoing.

"With major institutions and industry players on our shareholder register and a strong retail investor following, we are well-placed to complete the finance package for Sonora in H1 2020. Before then, thanks to the progress made over the last twelve months, Bacanora has a cash rich balance sheet which enables us to invest in long lead items and commence bulk earthworks. Our focus remains to start production at Sonora at the earliest opportunity, as we look to realise the Project's potential and, in the process, generate value for all our shareholders."

**ENDS**

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ABOUT BACANORA LITHIUM:

Bacanora owns ten mining concession areas covering approximately 100 thousand hectares in the northeast of Sonora State in Mexico. Seven of these ten mining concessions (the 'Sonora Lithium Project'1) were included in the Feasibility Study announced 12 December 2017. The Company, through drilling and exploration work to date, has established a Measured plus Indicated Mineral Resource estimate of over 5 Mt (comprising 1.9Mt of Measured Resources and 3.1Mt of Indicated Resources) of LCE2 and an additional Inferred Mineral Resource of 3.7 Mt of LCE. The Company's Feasibility Study has established Proven Mineral Reserves (in accordance with NI 43-101) of 1.67 Mt and Probable Mineral Reserves of 2.85 Mt LCE and confirmed the economics associated with becoming a 35,000 tpa lithium carbonate and 30,000 tpa SOP producer in Mexico.

In addition to the Sonora Lithium Project, the Company also has a 50% interest in the Zinnwald Lithium Project and the Falkenhain and Altenberg Licences in southern Saxony, Germany. The Zinnwald Feasibility Study has established Total Mineral Reserves (Proven and Probable in accordance with NI 43-101) of 94kt of contained lithium and confirmed the economics associated with becoming a 5,112 tpa lithium fluoride producer in Germany. Each of the Zinnwald Lithium Project, and the Falkenhain and Altenberg Licences are located in a granite hosted Sn/W/Li belt that has been mined historically for tin, tungsten and lithium at different times over the past 300 years. The strategic location of the Zinnwald Lithium Project and the Falkenhain and Altenberg Licences provides close geographical proximity to the German automotive and downstream lithium chemical industries.

1. Sonora Lithium Ltd ("SLL") is the operational holding company for the Sonora Lithium Project and owns 100% of the La Ventana concession. The La Ventana concession accounts for 88% of the mined ore feed in the Sonora Feasibility Study which covers the initial 19 years of the project mine life. SLL is owned 77.5% by Bacanora and 22.5% by Ganfeng Lithium Ltd. SLL also owns 70% of the El Sauz and Fleur concessions, which are held by Mexilit S.A. de C.V. ("Mexilit").

2. LCE = lithium carbonate (Li2CO3) equivalent; determined by multiplying Li value in percent by 5.323 to get an equivalent Li2CO3 value in per cent. Use of LCE is to provide data comparable with industry reports and assumes complete conversion of lithium in clays with no recovery or process losses.

Cautionary Statement Regarding Forward-Looking Information

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to: the updated estimation of resources, followed by mine design and mine planning activities and the completion of feasibility studies. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.

Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: commodity price volatility; general economic conditions in the United Kingdom, Canada, the United States, Mexico, Germany and globally; industry conditions, governmental regulation, including environmental regulation; unanticipated operating events or performance; failure to obtain industry partner and other third party consents and approvals, if and when required; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; competition for, among other things, capital, skilled personnel and supplies; changes in tax laws; and the other risk factors disclosed under our profile on SEDAR at www.sedar.com and on our website at www.bacanoralithium.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.