Bacanora Lithium has received the previously announced investment from the China-based lithium company Ganfeng Lithium, in exchange for a 29.99% equity interest in Bacanora and a 22.5% JV investment directly in the Sonora Lithium Project.
On 28 June 2019, Bacanora and Ganfeng have signed the investment agreement and offtake agreements, which were submitted to the relevant authorities in China for approval.
Bacanora has received the £21.9m ($27.7m) of funds from Ganfeng, after the Chinese authorities have approved the investment.
Sonora lithium project details
The Sonora deposit, located 190km North East of Hermosillo in northern Mexico, is estimated to contain measured plus an indicated mineral resource of more than 5 million tonnes (Mt) of lithium carbonate equivalent (LCE).
The project is located in an existing mining district and with good access to infrastructure, and consists of 10 contiguous concessions covering 97,389ha.
According to Bacanora, the battery-grade lithium demand is being driven by the growth of electric vehicles (EVs), and the recent lithium concentrate market conditions have driven numerous concentrate producers in Australia to reassess production plans.
Taking into account the growing demand for lithium, the company intends to undertake the development of the Sonora lithium project as a fully integrated mine and downstream processing facility to produce lithium products in the lowest operating cost quartile.
The Bacanora project team in Mexico will continue the final design work for the mine, concentrator and kiln sections of the processing plant.
Ganfeng intends to advance the development of Bacanora’s Sonora lithium clay project during the second half of 2019, as part of its planned manufacturing capacity expansions initiated in China, Australia, and Argentina.
The company said that it has undertaken the manufacturing capacity expansions to capitalise on the demand for lithium and strengthening its position in the lithium products industry.
The Ganfeng technical team has initiated work on the hydrometallurgical circuit and is reviewing sourcing key sections of the lithium production equipment from current equipment suppliers in China.
