Name of the Project
Sonora lithium project.

Location
Sonora state, Mexico.

Client
Bacanora Minerals.

Project Description
A feasibility study on the project has confirmed the positive economics and favourable operating costs of 35 000 t/y of battery-grade lithium carbonate (Li₂CO₃).

The project has measured and indicated mineral resources estimated at five-million tonnes, comprising 1.9-million tonnes of measured resources and 3.1-million tonnes of indicated resources of lithium carbonate equivalent (LCE) and an additional inferred mineral resource of 3.7-million tonnes of LCE.

The feasibility study envisages an openpit operation using continuous miners to mine the ore zones and a truck-and-shovel fleet to remove the waste material. An estimated 37.1-million tonnes of ore will be mined over the planned 19-year mine life, with a lithium grade of 4 151 parts per million and an average stripping ratio of about 3.4:1 over the life-of-mine.

The process plant has been designed to initially process 1.1-million tonnes a year of ore during Stage 1 of the project, subsequently increasing to an estimated 2.2-million tonnes a year at Stage 2, producing 17 500 t/y and 35 000 t/y of Li₂CO₃ respectively.

The plant design also includes a circuit to produce up to 30 000 t/y of potassium sulphate and/or sulphate of potash product through a series of evaporation and precipitation stages.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The feasibility study estimates a pretax net present value, at an 8% discount rate, of $1.25-billion and an internal rate of return of 26.1%, with a simple payback Stage 1 of four years.

Value
Stage 1 of the project is expected to cost about $419.62-million and Stage 2 $380.26-million.

Duration
Construction is expected to start in the first half of 2018, with production targeted for the first quarter of 2020.

Latest Developments
The Sonora lithium project is one step closer to fruition with Bacanora Lithium announcing that it has secured $150-million in debt for the development of Stage 1 of the mine.

The company has signed a senior debt facility with RK Mine Finance, which CEO Peter Secker has said has been 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 adds, further validate the quality of Sonora’s battery grade (more than 99.5% Li₂CO₃) 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.

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.