Chinese lithium firm Ganfeng has exercised its option to up its stake in the holding company of the Sonora project, in Mexico, from 22.5% to 50%.
London-listed Bacanora Lithium reported on Friday that Ganfeng would subscribe for shares worth £21.8-million (73 955 680 shares at 29.59p) in Sonora Lithium.
The investment would reduce the equity demands on Bacanora’s shareholders to fund Phase 1 of the project, CEO Peter Secker said in a statement.
Bacanora would remain as the project operator in Sonora, while Ganfeng would be responsible for leading the engineering, procurement and construction of the project.
Bacanora reported that Ganfeng had already completed a flow sheet design for the production of battery grade lithium. The Chinese group was now integrating this work into the final engineering design and remained on schedule to deliver its final engineering packages to Bacanora during the first half of 2021.
The joint venture partners are aiming to start production in 2023.
“With recent trends in electric vehicle purchases showing significant year-on-year growth and lithium storage batteries starting to play a strategic role in the storage of renewable energy, the Sonora Lithium project is now well placed to be in production in 2023 and delivering battery grade lithium products into the fast growing energy storage market,” said Secker.
Ganfeng deputy chairperson Wang Xiaoshen added in the statement that the group believed that Sonora was a world-class lithium project.
Shares in Bacanora jumped 18% to 38p a share on Friday.