Name and Location
Sonora lithium project, Mexico.

Client
Bacanora Minerals.

Project Description
Sonora is one of the world’s larger known clay lithium deposits. It has an indicated mineral resource estimate of five-million tonnes of lithium
carbonate equivalent (LCE) and an inferred mineral resource of 3.9-million tonnes of LCE.

The project involves the development of a mine and lithium carbonate (Li₂CO₃) processing facility.

A prefeasibility study (PFS) has highlighted the strong economic potential of producing up to 35 000 t/y of battery-grade Li₂CO₃. In addition, Sonora has the potential to produce up to 50 000 t/y of potassium sulphate for sale to the fertiliser industry.

The PFS envisages an openpit operation using conventional truck-and-shovel mining methods.

Hydraulic excavators and haul trucks, as well as an ancillary fleet of dozers, graders and water trucks will be used for the mine operation.

For the Stage 1 and Stage 2 mining design, 50-million tonnes of ore at a grade of 3 525 parts per million of lithium and 1.49% potassium, and a stripping ratio of 3.1:1, will be mined over the initial 20-year mine life.

The processing plant design comprises a preconcentration stage involving scrubbers, hydrocyclones and reverse flotation to produce an
initial concentrate prior to roasting.

The integrated plant has been designed to initially process 1.4-million tonnes of ore a year during the first two years of the project, subsequently increasing to about 2.7-million tonnes a year after Year 3.

The plant design also includes a circuit to produce 50 000 t/y of commercial-grade potassium sulphate through a series of evaporation, precipitation, filtration
and packaging stages.

Net Present Value/Internal Rate of Return
The PFS estimates a pretax internal rate of return of 29% (post-tax 25%) and an associated net present value, at an 8% discount rate, of $776-million (post-tax $542-million).

Value
Stage 1 has an initial capital cost of $240-million.

Stage 2 has a capital cost of $177.1-million.

Duration
The PFS estimates project commissioning to take place in the final quarter of the 2018 calendar year.

Latest Developments
Over the next 18 months, Bacanora will continue to progress the Sonora project through the project development stages to complete a feasibility study
by the first quarter of the 2017 calendar year.

In tandem with the feasibility study, Bacanora will seek additional offtake partners for Sonora’s lithium carbonate, which will represent a major milestone as it focuses on commercialising the project.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Bacanora Minerals, tel +1 403 237 6122, fax +1 403 237 6144 or email info@bacanoraminerals.com.