BCN.L Regulatory News (BCN)

Bacanora Minerals Ltd

("Bacanora" or the "Company")

BACANORA PROVIDES UPDATE ON THE SONORA LITHIUM PROJECT

Bacanora, the London and Canadian listed lithium company developing the Sonora Lithium Project[1] ("Project") in northern state of Sonora, Mexico , is pleased to provide an update on the activities being undertaken as part of the Company's upcoming definitive Feasibility Study ("FS").

The FS will be aimed at delivering the most economically robust production plan possible for an initial 17,500 tonne per annum ("tpa") of lithium carbonate operation at the Project (increasing to 35,000 tpa in later years). The Company's strategy is to position itself to satisfy ongoing strong growth for lithium carbonate in the fast growing sectors of electric vehicles and energy storage. The FS is targeted for completion in Q1, 2017 and the Company is fully financed through to the initial project development and the start of the construction stages.

Overview

· The process engineering for the FS has been awarded to Ausenco Engineers. SRK Consulting (UK) Ltd. ("SRK") will undertake the Mineral Resource Estimate ("MRE") and International Mining Consultants will carry out the reserve estimate and mine planning. Other specialised consulting groups will be appointed for additional sections of the FS.

· The Company's 3,000 metre infill drilling program is progressing well, with a target of upgrading a portion of the current Mineral Resource from the Indicated to Measured category:

o Indicated portion of the Resource is currently comprised of 259 Mt averaging 3,200 ppm Li for 4.5 Mt of lithium carbonate equivalent ("LCE[2]").

o A total of 2,039 metres have been drilled to date across 20 in-fill holes on the La Ventana concession - a further 11 holes remain to be drilled.

o Intercepts of the upper clay range from 14.1 to 40.9 m in thickness with an average thickness of 30.3 m and those for the lower clay range from 10.4 to 25.6 m with an average thickness of 19.8 m, these intercepts are consistant with the average thickness of the deposit.

o Assay results are expected to be reported in August.

· Continued expansion of the pilot plant capacity and metallurgical test work is ongoing:

o Initial focus on producing battery-grade lithium carbonate samples for delivery to off-takers in Asia and Europe during Q3, 2016.

o Continuing flow sheet development and optimisation of lithium recoveries and reagent consumption.

o On-going upgrades and optimisation of the pilot plant to ensure semi-continuous operations and continued lithium carbonate production.

· Recruitment and training:

o Over 30 professional and operational personnel are now working at the pilot plant in Hermosillo.

o Training and quality control processes are in full swing to negate risk associated with execution of commissioning and operational phases and to ensure excellence in terms of operations and quality control.

o Additional operations and technical personnel will continue to be employed at the pilot plant as sample production continues to ramp up.

Exploration and Resources:

The current exploration program is underway to upgrade a portion of the current MRE from the Indicated to Measured category is ongoing. This 3,000 metre drilling program has been planned in conjunction with SRK and over 2,000 metres (some 31 infill drill holes) have been completed to date on the La Ventana concession of the Project. In addition, geotechnical and hydrogeological studies are programmed to start after the drilling campaign.

Infill Drilling highlights:

· A total of 2,039 metres have been drilled in 20 in-fill holes on La Ventana; further 11 holes remain to be drilled in the ongoing programme.

· Intercepts of the upper clay range from 14.1 to 40.9 metres in length with an average thickness of 30.3 metres and those for the lower clay range from 10.4 to 25.6 metres with an average thickness of 19.8 m.

· Core splitting is ongoing and samples will be shipped to the ALS-Chemex laboratory for assays. Standards, blanks and duplicates are intercalated within the samples for QA/QC controls. Initial assay results are expected to be reported in August.

· Density measurements are undertaken in order to determine possible clay shrinkage/swelling, this to assist on the mine planning.

The table below summarises the unit intercepts of the current drilling campaign:

Hermosillo Pilot Plant Operation and Sample Production:

Over the past six months, the Company has continued to expand the production capacity of its pilot plant located in Hermosillo, Sonora, Mexico. Metallurgical test work is ongoing with a significant focus on off-taker samples, continuous flow sheet development plus operations and ongoing operator training. The initial focus has been the production of battery-grade lithium carbonate samples for delivery off-takers in Asia and Europe.

Over the next 12, months the Company will continue a recruitment campaign of engineers and operators in order to maintain the plant in continuous operation and to gain expertise in those processes that require supervision and monitoring for optimisation and quality control. To date, the plant operates continuously on the beneficiation and hydro-metallurgical processes. This investment in people and training will provide significant operational and quality control benefits once commissioning of the full scale lithium carbonate plant commences.

Pilot Plant Operation Highlights:

· Ore-to-product metallurgical test work on bulk samples taken from trenches on the clay units from the planned mining areas within the La Ventana concession is in progress.

· Upgrading of concentrate and pre-concentrate front-end processes to optimise lithium recovery.

· Hydrometallurgical recoveries have been improved by the addition of gas-fired rotary and stationary calcining units for continuous roasting of the lithium concentrate.

· Optimisation of gypsum consumption and evaporation and crystalisation parameters.

· Increased capacity in the Pregnant Liquor Solution ("PLS") circuits to allow continuous leaching operations.

· Installation of additional resin columns in the lithium carbonate recovery circuit for the refining of the product to battery-grade lithium carbonate.

In addition to the significant flow sheet development and optimisation being undertaken at the pilot plant, all of the flow sheet development is being audited by independent consultants as part of the ongoing FS process.

The Company will continue to develop a number of strategic relationships with international lithium trading companies and mining companies for the sale of its lithium carbonate products. The management team has already completed a number of detailed site and plant visits with potential off-take partners to facilitate and expedite lithium sample optimisation. Negotiations in respect to offtake agreements with these potential partners are ongoing and will continue in tandem with the preparation of the DFS.

Martin Vidal is the Qualified Person pursuant to National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and the AIM Note for Mining and Oil and Gas Companies who has reviewed and approved the technical contents of this announcement.

For further information, please contact:

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 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, 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 percent cut-off grade. The Company has completed a number of measures to determine the geological and commercial potential of the project and will undertake 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.