BCN.L Regulatory News (BCN)

Bacanora Minerals Ltd

("Bacanora Canada")

Publication of Circular in relation to the Re-Domicile

Notice of Annual and Special Meeting

Further to the announcement released on 24 June 2016, BACANORA MINERALS LTD. ("Bacanora Canada") (AIM: BCN and TSX-V:BCN), the AIM and TSX Venture Exchange listed lithium and borates company focussed on Mexico, announces that on Friday 15 July it posted to shareholders in Bacanora Canada ("Bacanora Canada Shareholders") a circular (the "Circular") convening an annual and special meeting (the "Annual and Special Meeting") of Bacanora Canada to be held in the Three Sisters Boardroom of Gowling WLG (Canada) LLP, at 1600, 421 - 7th Avenue S.W., Calgary, Alberta, Canada, T2P 4K9 on 15 August 2016 at 10:00 a.m. (Calgary time).

Bacanora Canada is proposing a reorganisation (the "Re-Domicile") of its corporate structure, with the effect that a newly incorporated English company, Bacanora Lithium plc ("Bacanora UK"), will acquire the entire issued share capital of Bacanora Canada in exchange for new shares in Bacanora UK ("Bacanora UK Shares") and will apply for admission to trading of its Bacanora UK Shares on the AIM market of the London Stock Exchange ("AIM"). Upon the admission of Bacanora UK Shares to trading on AIM, Bacanora Canada intends to delist the Bacanora Canada Shares from the TSX Venture Exchange (the "TSX-V") and cancel trading of the Bacanora Canada Shares on AIM. 

At the Annual and Special Meeting, Bacanora Canada Shareholders will be asked to approve the Re-Domicile and its implementation by way of an Alberta, Canada, court-approved plan of arrangement (the "Arrangement"). Bacanora Canada is currently an Alberta corporation listed on the TSX-V whose head office and registered office is located in Calgary, Canada. The Arrangement will result in Bacanora UK becoming the ultimate parent company of Bacanora Canada and its current affiliates. Bacanora UK will have its corporate head office and a place of business located in the London and Bacanora UK will be subject to the Companies Act 2006 (as amended) (the "U.K. Companies Act"). The Circular contains details about the Arrangement and why the Directors consider that the Re-Domicile is in the best interests of Bacanora Canada and the Bacanora Canada Shareholders and recommend that all Bacanora Canada Shareholders vote in favour the Arrangement

As part of the required approvals, the Arrangement must be approved by not less than 66⅔% of the votes cast by Bacanora Canada Shareholders present in person or represented by proxy and entitled to vote at the Annual and Special Meeting. Each Bacanora Canada Shareholder will be entitled to one vote for each Bacanora Canada Share held. The approval of not less than 66⅔% of the votes cast by Bacanora Canada Shareholders at the Annual and Special Meeting would fulfil the TSX-V requirement to obtain the approval of a simple majority of Bacanora Canada Shareholders. The Arrangement also requires, among other things, approval of the Court of Queen's Bench of Alberta (the "Court"). If the Arrangement is approved at the Annual and Special Meeting, it is intended that the Re-Domicile will be completed on the following day ("Effective Date").

Pursuant to the application for admission of Bacanora UK Shares to AIM, Bacanora UK will today publish an AIM Schedule 1 announcement ("Schedule 1 Announcement") together with an Appendix to that announcement ("Appendix") which will contain more information about the Re-Domicile and Bacanora UK. The Circular, and the Schedule 1 Announcement, together with the Appendix, will shortly be made available on Bacanora Canada's website at www.bacanoraminerals.com.

Reasons for the Arrangement

The Board of Directors believes that the re-domicile of Bacanora Canada in accordance with the terms of the Arrangement and the admission of the Bacanora UK Shares to trading on AIM will be in the best interests of Bacanora Canada and Bacanora Canada Shareholders for a number of reasons.

Given the geographic spread of Bacanora Canada's production, development and exploration licences with a core focus on Mexico, the Board of Directors believes that:

· It would now be more appropriate for Bacanora Canada to be based in Europe, where the majority of the Bacanora Canada Shareholders and most of management reside.

· Bacanora Canada has been successful in raising funding from the United Kingdom capital markets, with its market value quadrupling in size since its announcement to list on AIM in April 2014; with the proposed Re-Domicile, Bacanora Canada anticipates greater access to the UK capital and debt markets, as AIM market investors are generally more familiar with UK incorporated and tax resident listed companies. Bacanora Canada has in the last 8 months added two major UK based institutional investors, who now own almost 17% of issued and outstanding Bacanora Canada Shares.

· Bacanora Canada currently incurs high costs associated with having a dual listing in the AIM and on TSX-V, yet Canadian shareholdings are estimated at less than 10% of Bacanora Canada's shareholder base.

· Bacanora Canada believes that the Canadian shareholder base may continue to decrease and as a result having a single listing on AIM would allow Bacanora Canada to be more cost efficient without material downside.

· Bacanora Canada Shares currently have less liquidity on the TSX-V compared to the AIM. The liquidity of Bacanora Canada Shares have increased significantly since Bacanora Canada dual listed for trading on AIM.

Terms of the Arrangement

If the Arrangement is approved, Bacanora Canada's Shareholders will receive one Bacanora UK Share for each Bacanora Canada Share. Bacanora UK Shares will be issued to Bacanora Canada Shareholders on the Effective Date.

Accordingly, immediately upon the Arrangement becoming effective, a Bacanora Canada Shareholder will have the same proportionate interest in the profits, net assets and dividends of Bacanora UK as they have in Bacanora Canada immediately prior to the Effective Date. Bacanora Canada and its subsidiaries and subsidiary undertakings ("Bacanora Canada Group") will have the same business and operations immediately after the Effective Date as it had immediately before the Effective Date. The assets and liabilities of the Bacanora Group immediately after the Effective Date will not differ materially from the assets and liabilities the Bacanora Canada Group had before the Effective Date, save that Bacanora UK will hold all of the common shares then in issue in Bacanora Canada.

Expected timetable of principal events

This timetable is indicative only. The actual timetable will depend upon the time at which the conditions precedent to the Arrangement, including conditions relating to receipt of regulatory approvals, are satisfied or, if applicable, waived. Any variation to the timetable set out above will be announced by Bacanora Canada and published on Bacanora Canada's website.

For further information, please contact:

ABOUT BACANORA CANADA:

Bacanora Canada is a Canadian and London listed minerals explorer (TSX-V: BCN and AIM: BCN). It explores and is developing industrial mineral projects, with a primary focus on their lithium project. Its operations are based in Hermosillo in northern Mexico. The main assets of Bacanora Canada are: 

· The Sonora Lithium Project, which consists of ten mining concession areas in the northeast of Sonora State. Bacanora Canada, 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 Bacanora Canada'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. Bacanora Canada 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.