BCN.L Regulatory News (BCN)

This Announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR"). Upon the publication of this Announcement, this inside information is now considered to be in the public domain.

10 February 2021

Bacanora Lithium plc

("Bacanora" or the "Company")

Commencement of early site works at Sonora Lithium Project

Bacanora Lithium plc (AIM: BCN), a lithium development company, is pleased to announce that it has commenced initial site activities at the Sonora Lithium Project (the "Project"), located in Mexico. This milestone follows the Company's successful US$65 million fundraise last week, which, in combination with existing cash and the undrawn portions of its debt financing facility, will finance Bacanora's 50% share of the capital cost required for Stage 1 of the Project.

Bacanora is building the Project together with its partner, Ganfeng Lithium Co., Ltd. ("Ganfeng"), the world's largest lithium metals producer. Both parties are working towards a development timetable for Sonora, with scheduled production of battery grade lithium products in 2023.

Initial site works

The Company has engaged a local specialist ecological services company based in Sonora to begin initial site works. These activities will involve the rescue and removal of surface vegetation and topsoil in the area required for the construction of the lithium processing plant. These activities are being performed in compliance with its obligations pursuant to its environmental approvals. The excavated material will be stockpiled at a location adjacent to the plant site and will be stored in an approved manner in order that it can be incorporated into the future project rehabilitation schedule. A team of 15 personnel has been deployed to site, including two ecologists, a biologist, and a forestry engineer. The majority of these personnel reside in the local area.

In addition, the Bacanora construction team has commenced the preparatory work required to upgrade the main access road to the site in preparation for providing access for heavy equipment to commence the bulk site earthworks later in the year. The tender process for this work has commenced and is focusing on using local construction and engineering groups from the surrounding Sonora region. Work is also currently underway to commence the tender process for the site accommodation and ancillary facilities, scheduled to be commissioned by the end of Q2, 2021.

Engineering works

Transmission of engineering drawings and documentation from Ganfeng and its equipment suppliers in China has commenced and the final engineering packages will be delivered to Bacanora in Q2, 2021. In addition, Bacanora is working with its principal equipment suppliers to finalise a schedule for the delivery of the larger items of processing equipment for delivery in 2022. As part of this schedule, orders for the larger items of process equipment that have delivery schedules of over 12 months will be placed during Q3, 2021 for delivery to site in late 2022.

Impact of Covid-19 on Bacanora

As documented previously, Bacanora has not been immune to impacts of the COVID-19 pandemic and its timetable for the Project was slightly impacted during 2020. The Company's priority remains the health and well-being of its staff, partners and its local communities. Bacanora continues to take all appropriate measures to protect them in accordance with the relevant governmental and regional requirements. Sonora is now moving out of the second wave of infections and the Company will provide updates on the situation as any changes occur.

Community Engagement

Bacanora continues to work with the Sonora Government and the local municipalities in the region of the mine site. With the critical step of project funding now completed, the Company will continue to develop its community engagement strategy on education, training and development of local workforce as the Project transitions through the development stage into operations in 2023.

The Company's latest presentation is also available for download here: https://www.bacanoralithium.com/investor-relations/restricted-company-presentations/

Peter Secker, CEO of Bacanora said:

"I am delighted to announce Bacanora has commenced initial site works at the Sonora Lithium Project, located in Mexico. This milestone cements Bacanora's transition into a mine-development company as it looks to fulfil its ambition of becoming a lithium producer in 2023. I look forward to updating the market with further positive progress reports as we build the Sonora Lithium Project in conjunction with our strategic investor and project partner, Ganfeng."

For further information please visit www.bacanoralithium.com or contact:

Notes to editors

Bacanora Lithium Plc is an AIM-listed (ticker 'BCN') lithium development company. The Company is focused on building, in collaboration with its major shareholder and offtake partner, Ganfeng Lithium (the world's largest lithium metals producer), a 35,000 tonne per annum open pit lithium carbonate operation at its flagship asset, the Sonora Lithium Project in Mexico. The Sonora Lithium Project has 8.8 million tonnes of lithium carbonate (Li2CO3) equivalent resources, with an approximate 250-year resource life, as detailed in its December 2017 Feasibility Study.

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. On completion of this option exercise, SLL will be owned 50% by Bacanora and 50% by Ganfeng Lithium Co., Ltd. SLL also owns 70% of the El Sauz and Fleur concessions. 

Bacanora also owns 44.3% of Zinnwald Lithium Plc (AIM: ZNWD), which in turn owns a 50% interest in the Zinnwald Lithium Project and the Falkenhain and Altenberg Licences in southern Saxony, Germany.