BCN.L Regulatory News (BCN)

16 November 2015

Bacanora Minerals Ltd.

("Bacanora" or the "Company")

£8.8 Million Raised to Advance Sonora Lithium Project

Bacanora, the Canadian and London listed (TSX-V: BCN and AIM: BCN) lithium exploration and development company focussed on Sonora, Mexico, is pleased to announce that it has raised approximately £8.8 million (US$13.7 million / CAD $17.8 million) via the placing of 11,476,944 new common shares (the "Placing Shares") at a price of 77 pence per share (the "Placing"). The Placing is part of the Company's continuing strategy to become a large scale supplier to the lithium market, where demand is expected to continue growing rapidly thanks to lithium's key role in highly innovative industries such as smartphones, electric vehicles and energy storage. Through the Placing, Bacanora has secured its first major institutional shareholder as well as receiving support from pre-existing shareholders.

Rare Earth Minerals Plc ("REM"), one of the Company's largest existing shareholders, has reaffirmed its support by participating in the Placing to maintain its 17 per cent. interest by acquiring 1,973,407 Placing Shares, taking its total holding to 16,632,915 common shares in the Company, representing 17.21 per cent. of the enlarged issued share capital. As a substantial shareholder in the Company, REM's participation in the Placing constitutes a related party transaction under the AIM Rules for Companies. The Directors of the Company, having consulted with Cairn Financial Advisers LLP, the Company's Nominated Adviser, consider that REM's participation in the Placing is fair and reasonable insofar as shareholders are concerned.

The funds raised will be used to advance the Company's Sonora Lithium Project in Mexico1, one of the largest lithium resources in the world, containing estimated Indicated Mineral Resources of 1.14 million tonnes ("Mt") of lithium carbonate equivalent (LCE) and Inferred Mineral Resources of 6.3 Mt LCE. Specifically, the funds will enable the Company to fully fund the completion of the Bankable Feasibility Study, which is currently scheduled to commence in the first half of 2016. In addition, the proceeds will be used to facilitate the upgrade and continuous running of the Company's operational pilot plant in Hermosillo to produce bulk quantities of lithium products to supply to long term off-take parties with whom the Company remains in ongoing discussions. Testwork previously undertaken at the lithium carbonate pilot plant facility has produced high quality lithium carbonate for initial off-take discussions.

1The Sonora Lithium Project is comprised of the following lithium properties: La Ventana lithium concession, which is 100 per cent. owned by Bacanora; El Sauz and Fleur concessions, which are held by Mexilit S.A. de C.V. ("Mexilit"); and the Megalit concession, which is held by Megalit S.A de C.V ("Megalit"). Mexilit and Megalit are owned 70 per cent. by Bacanora and 30 per cent. by REM.

Colin Orr-Ewing, Chairman of Bacanora, commented, "We are pleased to welcome our first major UK institution to our shareholder register and are equally delighted by the continued support shown by our longstanding shareholders. We believe this endorsement is another clear indication of the potential of the Sonora Lithium Project and provides further impetus to our strategy to become a major player in the rapidly emerging lithium market. To have successfully raised funds during what continues to be a challenging environment for commodities in general highlights the attractive dynamics of the lithium market, thanks to the metal's key role in innovative and fast growing industries such as mobile communications and electric cars. With the funds in place to complete a Bankable Feasibility Study for Sonora and also to upgrade our Pilot Plant, 2016 is set to be a highly active period for Bacanora and we look forward to providing further updates on our progress over the coming months."

Admission and Dealings

The Placing Shares will rank pari passu in all respects with the Company's existing issued ordinary shares and will be equivalent to 11.88 per cent. of the enlarged issued share capital. 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. on 19 November 2015. 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 96,624,353 common shares in issue.

The Company has no common shares held in treasury. The total number of voting rights in the Company will therefore be 96,624,353. 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.

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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 Indicated Mineral Resource in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") of 1.14 Mt of lithium carbonate equivalent ("LCE")2 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 500 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.

2 LCE = lithium carbonate (Li2CO3) equivalent; determined by multiplying Li value in percent by 5.324 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.