Project developer Bacanora Lithium is planning a 2019 stock exchange listing for the subsidiary that holds its Zinnwald lithium deposit, in Germany.
Bacanora, which is also advancing the Sonora lithium project in Mexico, said on Thursday that it had held discussions with its financial advisers about listing Deutsche Lithium and that it expected the subsidiary to trade on “at least one” public market.
The listing will be pursued once the feasibility study at Zinnwald is completed in the second quarter of the year. The study is evaluating the production of higher value downstream lithium products for the European battery and automotive sectors.
“Having already produced lithium fluoride samples with over 99% purity from concentrates at Zinnwald and having recently announced a resource upgrade to 142 240 t of contained lithium, we are confident the feasibility study will confirm Zinnwald's status as a valuable, strategic asset,” chairperson Mark Hohnen said in a copy of a speech delivered at the company’s annual general meeting.
Bacanora also holds the Falkenheim exploration licences with an additional 40 000 t LCE located close to Zinnwald.
Commenting on the company’s progress with securing the outstanding funds for the Sonara mine, Hohnen said that it was confident that the funds would be secured in due course.
“We recently announced the appointment of Citigroup Global Markets to lead the equity financing of the Sonora project alongside Canaccord Genuity, both of whom shall also act as joint corporate brokers.”
The company’s confidence also stems from Sonora's competitive position as a soft rock deposit, which allows it to benefit from having the same low cost profile as the brine deposits of South America on the one hand, and the short production timelines similar to the high-cost hard rock producers on the other.
“At $4 000/t, Sonora's life-of-mine operating costs lie well below current contract selling pricing levels and occupy a position at the lower end of the industry cost curve. This compares very favourably to hard rock deposits which, due to the need for drilling, blasting, crushing and grinding, are among the highest cost producers. Unlike brine deposits, however, Sonora's processing route does not require a multi-year evaporation process. Instead a simple and proven processing route that has been used over the last three years in our pilot plant to produce 99.5% battery grade LCE is planned at the Sonora plant. This is expected to take just five to seven days to process ore into lithium carbonate, which matches the production rates of the higher cost hard rock deposits,” he said.
The mine’s operating costs are well below the current contract selling prices of $16 400/t.
“It is this fundamental competitive advantage that lies behind our confidence that we will secure the remaining funds on favourable terms, at either the asset or corporate level,” said Hohnen, noting that there had been a recent flurry of corporate activity in the industry.
Sonora is planned as a 35 000 t/y lithium carbonate project and has a net present value of $1.25-billion and an internal rate of return of 26.1%.