JOHANNESBURG (miningweekly.com) – Dual-listed lithium miner Bacanora Minerals and Chinese institutional fund management group NextView Capital have signed an agreement which would see the latter acquire a 19.89% equity interest in Bacanora through the placement of 32.97-million common shares at a price of 94.53p apiece.
The £31.17-million capital raised by the placing will be used for the continued development of the company's Sonora lithium project, in Hermosillo in northern Mexico.
In addition, Bacanora has agreed to supply NextView with 5 000 t/y of lithium carbonate produced at Sonora on a best-endeavours basis at market prices from its Stage 1 production, with a firm commitment to supply 8 000 t/y of lithium carbonate during Stage 2 and a best-endeavours promise to supply a further 7 000 t/y during Stage 2.
NextView has also agreed to assist the company in procuring project debt financing for Sonora.
The company believes that these commitments, along with the strategic investment, represent further validation of the quality of Sonora's battery-grade lithium carbonate product and Bacanora's production process.
NextView will be entitled to present a nominee for appointment to the board of directors of Bacanora with its president Yaping He to be appointed as a nonexecutive director.
The agreement follows the completion of a feasibility study at Sonora, which confirmed the positive economics and favourable operating costs of a 35 000 t/y battery-grade lithium carbonate (Li2CO3) operation at Sonora: estimated pretax project net present value of $1.25-billion, an internal rate of return of 26.2%, and life-of-mine operating costs of $3 910/t of Li2CO3.
In view of the size of the opportunity provided by the Chinese and Japanese markets for lithium, Bacanora intends to start a review of the parameters of its planned two-stage operation at Sonora with a view to increasing Stage 1 from 17 500 t/y.