Bacanora Lithium (BCN) has received another key approval from the Chinese government for its strategic investment agreement with Ganfeng Lithium Co., the world’s third largest lithium compounds producer. Shares spiked up to 10% following the news.
The deal would see Ganfeng Lithium acquire 29.99% of Bacanora for £14.4m, which the Londed-traded company plans to use as the cornerstone for its finance package for a large-scale lithium carbonate operations at the “high grade” Sonora Project in Mexico.
A report published by SRK Consulting estimated the mine holds a total lithium carbonate equivalent of 8.8 million tons. Bacanora hopes to hit an initial target of 17,500 tonnes per annum.
The new partners expect the final approval to be filed following a Ganfeng board meeting to be held in the coming weeks.
Upon completion of the Ganfeng investment, Wang Xiaoshen Deputy Chairman of Ganfeng Lithium will join Bacanora’s board as a director.
Peter Secker, CEO of Bacanora believes the investment from a lithium giant will act as proof of concept in the field; "The signature of these agreements with Ganfeng is another significant milestone in the development of the Sonora project.
Ganfeng's operational expertise and industrial credibility is a strong endorsement of the Sonora Project's potential to break the lithium industry's current supply duopoly of hard-rock and brine, and combine the speed of production of the first with the low operational cost per tonne of the second
Mr. Wang Xiaoshen mirrored the sentiment commenting, "We are continuing to progress the approval process in China in order to complete our initial investment in Bacanora Lithium and its Sonora Project. We are looking forward to working with Bacanora to develop this world-class project.
Our significant investment demonstrates our belief in the viability of the Sonora Project and its ability to become a world class operation and support Ganfeng's strategy of growing to a 100,000tpa lithium producer.”
For more news and updates on Bacanora Lithium: