The Sonora lithium project is one step closer to fruition with Bacanora Lithium on Thursday announcing that it had secured $150-million in debt for the development of Stage 1 of the Mexico mine.
The company has signed a senior debt facility with RK Mine Finance, which CEO Peter Secker said was agreed on competitive terms, when compared with other debt packages recently reported for greenfield lithium projects in Canada and Australia.
The debt facility is structured as two Eurobonds, with the main $150-million bond carrying a six-year term and bearing interest at the three-month London Interbank Offered Rates (Libor) plus 8% a year. Interest will be capitalised every three months for the first 24 months and thereafter interest will be paid every three months in cash.
The second $56-million bond has a 20-year term and is repayable by reference to monthly production of lithium at a rate of $160/t of lithium produced, with any remaining amount repayable at the end of the 20-year term.
The competitive terms, Secker added, further validated the quality of Sonora’s battery grade (more than 99.5% lithium carbonate) and its potential to become a leading supplier of high-value lithium products to fast-growing industries such as electric vehicles and energy storage.
Bacanora is continuing discussions with offtake partner Japanese trading company Hanwa and other strategic investors to complete the proposed Stage 1 development funding package.
“We continue to talk with other important participants in the lithium space with a view to securing additional high quality strategic partners, as we focus on entering into the construction phase of what we believe will be the next significant producer of battery grade lithium carbonate,” Secker said.
Stage 1, which will produce 17 500 t/y of lithium carbonate, will cost about $419.62-million and Stage 2, which will expand production to 35 000 t/y, will cost about $380.26-million.
Last month, a feasibility study confirmed the positive economics and favourable operating costs of the project. The study assigned a pre-tax $1.2-billion net present value to the Sonora project, which is anticipated to start production in 2020.