BCN.L Regulatory News (BCN)

Bacanora Minerals Ltd

("Bacanora" or the "Company")

Issue of Equity to funds and accounts under management by BlackRock

Bacanora, the London and Canadian listed (AIM: BCN and TSX-V: BCN) lithium company which is developing the Sonora Lithium Project in northern Mexico, is pleased to announce that it has raised £7,702,500 (approximately US$11.2 million / approximately CAD $14.7 million) via the placing of 9,750,000 units (the "Placing Units") at a price of 79 pence per Placing Unit (the "Placing") with certain funds and accounts managed by BlackRock ("BlackRock"). Each Placing Unit is comprised of one new common share of the Company (a "Placing Share") and 0.3 of one common share purchase warrant, with each whole warrant (a "Placing Warrant") being exercisable into one common share at a price of 79 pence at any time subsequent to July 25, 2016, but on or before September 30, 2016. Accordingly, an aggregate of 9,750,000 Placing Shares and 2,925,000 Placing Warrants are issuable under this Placing. In the event that the Placing Warrants are fully exercised, the total proceeds received by the Company from the Placing will be approximately £10,000,000 (approximately US$14.6 million / approximately CAD $19.1 million). The Placing is in line with the Company's strategy to increase the institutional representation of its shareholder register and follows the securing of Bacanora's first major institutional investor in November 2015.

The funds raised will be invested in the Company's Sonora Lithium Project in Mexico1, one of the larger lithium resources in the world, which contains estimated Indicated Mineral Resources of 259 million tonnes ("Mt") averaging 3,200 ppm Li for 4.5 Mt of lithium carbonate equivalent ("LCE")2 and Inferred Mineral Resources of 160 Mt averaging 3,200 ppm Li for 2.7 Mt of LCE. A fully funded Feasibility Study ('FS'), which is due for completion in Q1 2017, is underway at Sonora in line with the Company's strategy to deliver a two phase open-pit mine and lithium carbonate processing facility with a life of over 20 years as quickly as practicable. A Pre-Feasibility Study ('PFS') announced on 3 March 2016 highlighted the attractive economics associated with delivering on this strategy (Pre-tax NPV8% of US$776 million and Pre-tax IRR of 29%). In tandem with the FS, discussions are continuing with various Asian offtake partners, banks, debt providers and strategic investors.

Peter Secker, CEO of Bacanora, commented, "We are very pleased to welcome Blackrock, our second major institutional investor, to our shareholder register. In our view, raising £7.7 million (with the potential to increase this to an aggregate of £10 million) at the prevailing share price in current market conditions is testament to the potential of the Sonora Lithium Project to be a major supplier to the lithium market, as highlighted by the recent PFS. BlackRock is not only gaining exposure to Bacanora at an exciting time in its development, but also to the attractive demand / supply dynamics of the global lithium market. Thanks to lithium's key role in highly innovative industries such as smartphones, electric vehicles and energy storage, supply is expected to struggle to match continued rapid growth in demand for many years to come. We believe Bacanora is well placed to play its part in closing this expected shortfall in supply and I look forward to providing further updates on our progress."

Admission and Dealings

The Placing Shares (and the common shares issuable upon exercise of the Placing Warrants) will rank pari passu in all respects with the Company's existing issued ordinary shares and the Placing Shares will be equivalent to 9.04 per cent. of the enlarged issued share capital (11.44 per cent. of the enlarged issued share capital if all of the Placing Warrants are exercised). Application has been made for the admission of the Placing Shares to trading on AIM and it is expected that admission will occur and that dealings will commence at 8.00 a.m. (UK time) on 26 May 2016. The placing is conditional, inter alia, on Admission becoming effective.

For the purposes of the Financial Conduct Authority's Disclosure and Transparency Rules, the Company announces that following the issue of the Placing Shares, the Company will have 107,874,353 common shares in issue (110,799,353 if the Placing Warrants are fully exercised).

The Company has no common shares held in treasury. The total number of voting rights in the Company will therefore be 107,874,353 (110,799,353 once the Placing Warrants are fully exercised). This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

**ENDS**

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ABOUT BACANORA:

Bacanora is a Canadian and London listed minerals explorer (AIM and TSX-V: BCN). The Company explores and is developing industrial mineral projects, with a primary focus on its lithium project. The Company's operations are based in Hermosillo in northern Mexico. The 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 Indicated Mineral Resource (in accordance with NI 43-101) of 4.46 Mt LCE contained in 259 Mt of clay at a Li grade of 3,200 ppm and an Inferred Mineral Resource of 2.74 Mt LCE contained in 160 Mt of clay at a Li grade of 3,200 ppm

· 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.