TIDMBCN
RNS Number : 0678F
Bacanora Minerals Ltd
15 May 2017
15 May 2017
Bacanora Minerals Ltd
('Bacanora' or the 'Company')
Board Changes and Update on Lithium Projects in Mexico and
Germany
Bacanora, the London and Canadian listed (AIM: BCN, TSXV: BCN)
lithium exploration and development company, is pleased to announce
changes to the Board, as well as provide an update on its flagship
Sonora Project ('Sonora') in Mexico where a Feasibility Study
('FS') for a 35,000 tonnes per annum lithium carbonate operation is
now on course for completion in late 2017. The Company has also
recently commenced a FS for the Zinnwald Project ('Zinnwald')
located near Dresden, Germany. In addition the Company is pleased
to announce the appointment of two new Non-executive directors and
Canaccord Genuity Limited as its sole broker with immediate
effect.
Changes to Board of Directors
The Company announces the appointment of Dr Andres Antonius, who
is based in Mexico City, and Mr. Junichi Tomono, head of the
Speciality Metals and Alloys department of leading Japan-based
global trading company Hanwa Co., LTD. ('Hanwa'), as Non-executive
Directors of the Company. Such appointments have been approved by
the Board of Bacanora and will take full effect upon completion of
standard regulatory reviews, which are underway.
The two appointments replace Mr. James Leahy, who has stepped
down from the Board to pursue other business interests, and Mr.
Kiran Morzaria who resigned from his position as Non-executive
Director of the Company earlier this year (see announcement of 26
January 2017 for further details). Mr. Tomono's appointment to the
Board follows the signing of a strategic partnership and offtake
agreement for Sonora which has seen Hanwa acquire an initial 10%
interest in Bacanora following a private placement (see
announcement of 2 May 2017 for further details).
Dr. Andres Constantin Antonius Gonzalez (aged 47) is a Mexican
national who has held positions in the Government of Mexico as well
as in the private sector and academia. Dr. Antonius previously
served as Undersecretary for Energy Policy and prior to that was a
staff member at the Agriculture Secretariat. Dr. Antonius also held
the role of coordinator for strategy of then President Elect Peña
Nieto's transition team in 2012. Dr. Antonius is currently CEO of
Plan B, a provider of strategic advice to a range of clients. Prior
to founding Plan B, he was the President of the Consulting Services
Group at Kroll, a world leader in risk management, business
intelligence, and investigations. Dr. Antonius has also held the
position of Director of Strategic Planning at the Instituto
Tecnológico Autónomo de México ('ITAM') and has taught economic
theory, game theory, and crisis management at both the ITAM and the
Universidad Iberoamericana. He received a B.A., Masters and PhD
degree in Economics from Harvard University. As part of his
package, Dr. Antonius will be granted 500,000 options to acquire
new ordinary shares in the Company at an exercise price of 86.5
pence. Such options vest as to 1/3 on the date of grant and an
additional 1/3 on each of the first and second anniversaries of the
date of grant and are exercisable for a period of three (3) years.
All of these options (and the common shares issuable upon exercise)
will be subject to applicable securities law hold periods.
Junichi Tomono (aged 43) has over 22 years' experience with
Hanwa, during which time he has worked in the Metals, Chemicals,
Alloys, Scrap metals and Mining divisions. Mr. Tomono has a special
focus on the battery chemicals sector including lithium. As head of
the Speciality Metals and Alloys department and as a Director of
three of Hanwa's subsidiaries, Mr. Tomono has played a key role in
Hanwa adopting a more global focus in response to the rapid growth
in the lithium battery sector.
Project Updates
Sonora, Mexico
FS activities continue on the Sonora Project, which is one of
the world's larger lithium resources. Metallurgical test work
continues at the SGS laboratories in Perth and Ausenco Limited is
currently completing the flow sheet design and mass balance to
finalise operating and capital cost estimates. IMC Mining
Consultants in Tucson has commenced mine planning and equipment
selection for the open pit mining operation. Within Sonora, local
infrastructure, energy and natural gas supplies and consumable
chemicals for the project continue to be a focus as a result of the
previously reported increases in costs for natural gas and chemical
reagents. The FS report will also include an updated Mineral
Resource Estimate ('MRE') and geological model by SRK Consulting
(UK) Limited based on the infill drilling programme which was
completed in Q3 2016.
The pricing environment for lithium carbonate has strengthened
to close to US$12,000/t from an average of around US$6,000/t in
2015 (source: http://trugroup.com/lithium-market-conference.shtml).
The pricing of lithium carbonate shipments to China and Japan
remained strong in January 2017, with reported sales by major
producers in the region of $12,000/t and spot sales in Japan and
China around $15,000/t (source:
(https://seekingalpha.com/article/4040100-lithium-miner-news-month-january-2017).
With this in mind, the Company will update the pricing assumptions
in its FS and expects to announce the updated long term pricing
forecast for lithium carbonate for the FS prior to the FS being
released.
Reflecting its commitment to working with Bacanora to deliver a
35,000 tonne per annum lithium carbonate operation which can supply
the fast-growing Asian battery market, cornerstone investor Hanwa
continues to facilitate discussions with regards to securing
long-term project debt funding to contribute to the construction
capex.
Zinnwald, Germany
The Company has commenced the FS at the Zinnwald Lithium Project
in Germany, in which it has a 50% interest. Zinnwald benefits from
its proximity to Dresden, a major centre of the German chemical
industry. The ability to source downstream chemicals and skilled
professional labour is considered a significant advantage in
Bacanora's strategy to develop a downstream, high value lithium
product suite. In addition, close proximity to the rapidly growing
German automotive and renewable industries provide a very
significant potential local market for Zinnwald lithium
products.
Baconora's 50% partner in Zinnwald, SolarWorld AG
('SolarWorld'), recently announced its intention to file for
bankruptcy protection in Germany due to ongoing pricing pressures
in its core solar markets. Under the terms of the agreement signed
with SolarWorld in February 2017, Bacanora acquired a 50% interest
in, and joint operational control of Zinnwald in exchange for a
cash consideration of EUR5 million and an undertaking to spend EUR5
million towards the cost of completing the FS. The agreement also
included an option for Bacanora to acquire the outstanding 50% held
by SolarWorld within a 24 month period for EUR30 million. The
Company is confident that the SolarWorld insolvency process will
have no material impact on the Company's interest, nor its
agreement with SolarWorld.
As part of the FS, bulk ore sampling work will be carried out
during the summer to provide samples for metallurgical testwork for
inclusion in the flowsheet. Additionally, an infill drilling
programme is planned for late 2017 to upgrade the existing resource
model in accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects. The drilling will test for a
number of potential by-products including tin, tungsten and SOP.
The 2014 resource estimate was reported in accordance with the Pan
European Code for Reporting of Exploration Results, Mineral
Resources and Reserves, and is outlined below:
Resource Category Tonnes* (000) Li Grade (ppm) Contained LCE**
(Tonnes)
------------------- -------------- --------------- ----------------
Measured 10,283 3,661 200,277
------------------- -------------- --------------- ----------------
Indicated 16,287 3,594 311,408
------------------- -------------- --------------- ----------------
Inferred 9,867 3,705 194,484
------------------- -------------- --------------- ----------------
* Li cut-off 2,500pm and >2 metres vertical thickness.
** LCE is the industry standard terminology for, and is
equivalent to, Li2CO3. 1 ppm Li metal is equivalent to 5.32 ppm LCE
/ Li2CO3. Use of LCE is to provide data comparable with industry
reports and assumes complete conversion of lithium in clays with no
recovery or process losses.
Bacanora CEO Peter Secker said, "We are delighted to welcome
both Dr. Antonius and Mr. Tomono to our Board and Canaccord Genuity
to our advisory team. The addition of individuals with the
experience and expertise they have comes at an exciting time for
Bacanora, specifically with the FS for Sonora nearing completion
and the FS for Zinnwald commencing. These activities are focused on
our objectives of transforming Bacanora into a major supplier to
the fast-growing Lithium markets in Asia and Germany.
"We expect the Sonora FS to confirm the project's status as a
high-quality asset capable of supplying Asian markets with battery
grade lithium carbonate for many years to come, and at the same
time generating excellent returns for our shareholders. Similarly,
we believe Zinnwald can become a significant hard rock lithium
asset with the potential to serve the fast growing German e-vehicle
sector. The planned upgrading of the historic resource to
internationally recognised reporting standards is a first step in
demonstrating Zinnwald's excellent potential. I look forward to
providing further updates."
Mark Hohnen, Chairman of Bacanora commented, "On behalf of the
Board I would very much like to thank James Leahy for the
invaluable contribution he has made to Bacanora's development both
as a Non-executive director of the Company as well as interim
Chairman of the Board following the untimely passing of Colin
Orr-Ewing last year. The Board wishes James all the very best for
the future with his other business interests."
Set out below are details of Dr. Antonius' current directorships
and those that he has held within the last five years.
Current Directorships Past Directorships (past 5 years)
Plan B Asesoria y Estrategia, SC
Grupo Financiero Interacciones, S.A. de C.V.
Corporacion Geo, S.A.B de C.V.
There is no further information on Dr Antonius, which is
required to be disclosed under Schedule Two, paragraph (g) of the
AIM Rules for Companies.
Set out below are details of Mr Tomono's current directorships
and those that he has held within the last five years.
Current Directorships Past Directorships (past 5 years)
Showa Metals Co., Ltd
Nikko Metals Co., Ltd
Hanwa Metals Co., Ltd
There is no further information on Mr. Tomono, which is required
to be disclosed under Schedule Two, paragraph (g) of the AIM Rules
for Companies.
**ENDS**
Bacanora Minerals Peter Secker, CEO info@bacanoraminerals.com
Ltd.
-------------------------- ------------------------------- --------------------------
Cairn Financial Advisers +44 (0) 20 7213
LLP, Nomad Sandy Jamieson/Liam Murray 0880
-------------------------- ------------------------------- --------------------------
Canaccord Genuity, +44 (0) 20 7523
Broker Martin Davison, James Asensio 8000
-------------------------- ------------------------------- --------------------------
St Brides Partners, Frank Buhagiar/ Elisabeth +44 (0) 20 7236
Financial PR Adviser Cowell 1177
-------------------------- ------------------------------- --------------------------
ABOUT BACANORA:
Bacanora is a Canadian and London listed lithium exploration and
development company (TSX-V: BCN and AIM: BCN). The Company is
exploring for, and developing a pipeline of international lithium
projects, with a primary focus on the Sonora Lithium Project. The
Company's operations are based in Hermosillo in northern Mexico.
The Company is led by a team with lithium expertise and proven mine
development, construction and operations experience.
The Sonora Lithium Project, which consists of ten mining
concession areas covering approximately 100 thousand hectares in
the northeast of Sonora State. The Company, through drilling and
exploration work to date, has established an Indicated Mineral
Resource (in accordance with NI 43-101) of 4.5 million tonnes
(LCE[1]) and 2.7 million tonnes Inferred.[2] A Pre-Feasibility
Study completed in Q1 2016[3] established Probable Mineral Reserve
(in accordance with NI 43-101) of 2.1 million tonnes LCE and
demonstrated the economics associated with becoming a 35,000 tpa
lithium carbonate and 50,000 tpa SOP producer in Mexico.
In addition to the Sonora Lithium Project, the Company also has
a 50% interest in the Zinnwald Lithium Project in southern Saxony,
Germany. The Zinnwald Lithium Project is located in a granite
hosted Sn/W/Li belt that has been mined historically for tin,
tungsten and lithium at different times over the past 300 years.
The strategic location of the Zinnwald Lithium Project allows
immediate access to the German automotive and downstream lithium
chemical industries.
1 LCE = lithium carbonate (Li(2) CO(3) ) equivalent; determined
by multiplying Li value in percent by 5.324 to get an equivalent
Li(2) CO(3) value in per cent. Use of LCE is to provide data
comparable with industry reports and assumes complete conversion of
lithium in clays with no recovery or process losses.
2 See Amended Mineral Resource Estimate for the Sonora Lithium
Project, Mexico, April 2016. The lead author of the amended report
is Mr. Martin Pittuck (MSc., C.Eng., FGS, MIMMM) of SRK Consulting
(UK) Limited ('SRK'). A copy of this report is available under
Bacanora's corporate profile at www.sedar.com.
3 See Technical Report on the Pre-Feasibility Study for the
Sonora Lithium Project, Mexico, 15 April 2016. The authors of the
PFS are Ausenco Limited, SRK and Independent Mining Consultants
Inc. A copy of this report is available under Bacanora's corporate
profile at www.sedar.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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