JOHANNESBURG (miningweekly.com) – London-listed Bacanora Lithium has terminated its £31.17-million placing agreement with NextView, after the Chinese institutional fund management group defaulted on the December 2017 agreement.

NextView would have acquired a 19.89% equity interest in Bacanora through the acquisition of 32 976 635 common shares at 94.53p each, for an aggregate amount of £31.17-million.

NextView fulfilled its initial obligations, but Bacanora said on Friday that the company had failed to forward the placing proceeds, leaving it in default of the placing letter. Bacanora added that it had reserved its rights to pursue legal remedies against NextView.

The capital from the NextView deal was meant to be used for the continued development of Bacanora’s flagship Sonora project, in Mexico.

Meanwhile, Bacanora reported that it was continuing to finalise its debt and equity financing strategy for its the $420-million Sonora mine, where it plans to break ground before the middle for this year.

Bacanora is working with its broker, Canaccord Genuity, and other financial advisers to secure financing for the mine, which will produce 17 500 t/y of lithium carbonate.

The time table is expected to be updated at the end of the front-end engineering design (FEED) process, but according to current plans, construction of the mine will be completed in 18 months, allowing for production to start in the first quarter of 2020, CEO Peter Secker reported.

The FEED packages are focusing on the design of the roaster/kiln and the crystalliser/evaporation/IX. These two equipment packages are expected to comprise about 75% of the total capital costs of the processing plant.

The FEED schedule is to have designs, cost estimates and process guarantee scopes completed in the second quarter of the year, with orders for long-lead items being placed at the end of the process.

Bacanora is also in discussions with engineering groups for all other parts of the processing plant, to allow for the finalisation of project cost, as well as completing a budget and timetables for the mine project.

In terms of energy supply for Sonora, Bacanora reported that it would power the project with liquefied natural gas in the early stages of commissioning, while gas consumption was low.

Once energy consumption reached steady state, the company would switch to pipeline supply.  Bacanora said it was in detailed discussions with a number of potential build, own and operate energy partners for the gas pipeline development, along with the finalisation of the proposed natural gas pipeline routes.

"The feasibility study in December 2017 confirmed Sonora's credentials to become a world-class, low-cost producer of battery-grade lithium carbonate, and we are focused on realising this potential at the earliest opportunity. With this in mind, work streams covering FEED, infrastructure, permitting and financing are all progressing concurrently and on schedule so that we remain on course to embark on the construction phase at Sonora in the first half of 2018,” said Secker.

The feasibility study showed that Sonora will have life-of-mine gross operating costs of $3 910/t Li₂CO₃, which are comparable to those of the low-cost brine producers of South America.

Bacanora has recently redomiciled from Canada to the UK and is now only listed on the Aim, having delisted from the TSX-V.

The company also owns 50% of the Zinnwald project, in Germany, where a feasibility study is under way.