Bacanora Lithium (BCN) on Monday revealed that it raised £7,729,150 from M&G Plc to support pre-construction works at the Sonora Lithium Project in Mexico.
Bacanora issued over 30 million new shares at 25p each, increasing M&G’s total holding to 19.9% of the AIM-listed firm.
Bacanora Chairman Mark Hohnen said: "Today's Placing, following an inbound request from one of our long-standing institutional investors, M&G, represents in our view an endorsement of Sonora's potential to become a leading supplier of high-value lithium products to fast-growing industries such as electric vehicles and energy storage.”
“It also further de-risks the required funding for the Project, that continues to be progressed by our brokers, Canaccord and Citi, and which we are aiming to complete in H1 2020.”
Shares in Bacanora Lithium were trading 3.88% higher at 26.75p on Monday afternoon
Mr. Hohnen added: “With our highly supportive strategic partner and leading global lithium company, Ganfeng, undertaking a technical review of the Project, we are working hard to ensure we hit the ground running as soon as this work has been completed.”
Ganfeng Lithium Co. is in the midst of completing a strategic review, after which Bacanora said it is to place initial orders for some of the longest lead-time items in the concentrator, pyrometallurgy and hydrometallurgy sections of the lithium plant.
A feasibility study estimated the Sonora project to have a $1.25 billion NPV, 26% IRR and operating costs of $4000 per tonne of lithium carbonate.
Mr. Hohnen said: "Forecast lowest quartile operating costs, a 200 year plus resource base and high-grade, high value end product ideally position Sonora to play a major role in the ongoing battery technology revolution that promises to transform and reshape how businesses and industries operate.”
Bacanora said planned works at Sonora include the commencement of the bulk earthworks on site in H1 2020 and an upgrade to the primary access road.
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