TIDMBCN
RNS Number : 1149H
Bacanora Lithium PLC
23 March 2020
23 March 2020
Bacanora Lithium plc
("Bacanora" or the "Company")
Sonora Lithium Project and Covid-19 Update
Bacanora Lithium plc (AIM: BCN), a lithium exploration and
development company, provides an update on activities at its Sonora
Lithium Project in Mexico ("Sonora" or the "Project") following the
outbreak of Covid-19. Bacanora's first priority is the health and
well-being of its staff, partners and its local communities and has
taken all appropriate measures to protect them in accordance with
the relevant governmental and regional requirements. Whilst
Covid-19 has affected Bacanora and its partners, the Company
continues to progress all its workstreams, in particular the
completion of the Project engineering work. The timetable for this
engineering work has however been impacted by delays in Asia and
North America due to the ongoing government restrictions.
Completion is now scheduled for Q3, 2020. Nonetheless, Bacanora has
a strong cash position of US$47 million and is well positioned to
withstand the continued effects of Covid-19.
Ganfeng Review and Process Testwork
Ganfeng Lithium ("Ganfeng"), like all Chinese companies, was
severely impacted by the travel restrictions imposed by the Chinese
Government to slow the spread of Covid-19 during February and early
March. Although these restrictions are now being lifted, the return
to work has been slow. Ganfeng's main lithium processing plant at
Xinyu is resuming operations and lithium production is building up.
As a result of this return to work, the Ganfeng test plant and
project team have also resumed work on the Sonora flow sheet
optimisation and process engineering. Whilst some weeks of
engineering have been lost, completion of engineering and equipment
selection is now scheduled for Q3, 2020. Subsequently, Ganfeng will
provide Bacanora with an Engineering, Procurement and Construction
("EPC") style engineering proposal for the production of downstream
battery grade lithium products from the Sonora lithium plant. This
schedule remains under regular review in relation to the ongoing
Covid-19 situation and shareholders will be updated regularly as
the engineering process develops.
Impact of Covid-19 on Bacanora
The first Covid-19 case in Sonora, Mexico was confirmed last
week and in response, the local Sonora government has put in place
measures to combat the spread of Covid-19 which includes closing of
schools and all non-essential business operations as well as
cancelling events of more than 10 people. Accordingly, Bacanora's
administrative staff, based in Hermosillo, are now working
remotely. The pilot plant will continue to operate on day shift
until the next batch of kiln and lithium samples are shipped to the
USA and China, or until the Company is required to temporarily
close its operations following a government directive. In the UK
head office and Zinnwald project in Germany, all staff are now
working remotely.
EPC Project Engineer
In order to expedite the completion of the Front End Engineering
Design ("FEED") process, Bacanora has appointed GR Engineering
Services ("GRES") to provide engineering services for Sonora. GRES
is a leading process engineering consulting and contracting company
that specialises in providing high quality engineering design and
construction services to the mining and mineral processing
industries. GRES have current projects in Mexico and the recently
acquired Hanlon Engineering which is based, nearby to Hermosillo,
in Tucson Arizona. GRES has a proven track record of delivering
integrated project solutions having provided services in over 20
countries for a range of minerals. This role will involve GRES
completing EPC services across the lithium processing facility,
providing a fully integrated facility design with the assurance of
the GRES contracting capability and experience.
Sonora Project Timetable
In conjunction with GRES and Ganfeng, Bacanora is updating its
engineering and contracts schedules, with a goal of being able to
complete financing for the Project and commence construction before
the end of 2020.
Mark Hohnen (Chairman) and Peter Secker, CEO of Bacanora,
commented:
"Bacanora and its partners have, like all companies, been
affected by the Covid-19 outbreak and the resultant knock-on impact
on businesses and the wider stock market. The health and safety of
our employees, partners and local communities is without doubt our
top priority during these uncertain times. We will however,
continue to work as best we can within the current restrictions to
deliver the final design work and construction contracts that
should allow us to finalise project financing and commence site
works before the end of this year. The Company remains well
capitalised with more than US$47 million cash in the bank and,
together with its supportive shareholders and partners, it is well
positioned to withstand the continued effects of Covid-19."
**S **
For further information please visit www.bacanoralithium.com or
contact:
Bacanora Lithium plc info@bacanoralithium.com
Peter Secker, CEO
Janet Blas, CFO
Cairn Financial Advisers LLP,
Nomad
Sandy Jamieson / Liam Murray +44 (0) 20 7213 0880
Citigroup Global Markets,
Joint Broker
Tom Reid / Patrick Evans /
Matthew Kenney +44 (0) 20 7986 4000
Canaccord Genuity, Joint Broker
James Asensio / Edward Montgomery +44 (0) 20 7523 8000
Tavistock, Financial PR Adviser Bacanora@tavistock.co.uk
Jos Simson / Emily Moss / +44 (0) 20 7920 3150
Oliver Lamb +44 (0) 77 8855 4035
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014
Notes to editors
Bacanora Lithium Plc is an AIM-listed (ticker 'BCN') lithium
development and exploration company. The Company owns assets in
Mexico and Germany. It is focused on building, in collaboration
with its major shareholder and offtake partner, Ganfeng Lithium
(the world's largest lithium metals producer), a 35,000 tonne per
annum open pit lithium carbonate operation at its flagship asset,
the Sonora Lithium Project in Mexico. The Sonora Lithium Project
has 8.8 million tonnes of lithium carbonate (Li2CO3) equivalent
resources, with an approximate 250 year resource life, as detailed
in its December 2017 Feasibility Study.
Sonora Lithium Ltd ("SLL") is the operational holding company
for the Sonora Lithium Project and owns 100% of the La Ventana
concession. The La Ventana concession accounts for 88% of the mined
ore feed in the Sonora Feasibility Study which covers the initial
19 years of the project mine life. SLL is owned 77.5% by Bacanora
and 22.5% by Ganfeng Lithium Ltd. SLL also owns 70% of the El Sauz
and Fleur concessions.
In addition, the Company has a 50% interest in the Zinnwald
Lithium Project and the Falkenhain and Altenberg Licences in
southern Saxony, Germany.
Cautionary Statement Regarding Forward-Looking Information
Except for statements of historical fact, this news release
contains certain "forward-looking information" within the meaning
of applicable securities law. Forward-looking information is
frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. Although we believe that the expectations
reflected in the forward-looking information are reasonable, there
can be no assurance that such expectations will prove to be
correct. We cannot guarantee future results, performance or
achievements. Consequently, there is no representation that the
actual results achieved will be the same, in whole or in part, as
those set out in the forward-looking information.
Forward-looking information is based on the opinions and
estimates of management at the date the statements are made, and
are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those anticipated in the forward-looking
information. Some of the risks and other factors that could cause
the results to differ materially from those expressed in the
forward-looking information include, but are not limited to:
commodity price volatility; general economic conditions in the UK,
the United States, Mexico, Germany and globally; industry
conditions, governmental regulation, including environmental
regulation; unanticipated operating events or performance; failure
to obtain industry partner and other third party consents and
approvals, if and when required; the availability of capital on
acceptable terms; the need to obtain required approvals from
regulatory authorities; stock market volatility; competition for,
among other things, capital, skilled personnel and supplies;
changes in tax laws; and the other risk factors disclosed under our
profile on SEDAR at www.sedar.com. Readers are cautioned that this
list of risk factors should not be construed as exhaustive.
The forward-looking information contained in this news release
is expressly qualified by this cautionary statement. We undertake
no duty to update any of the forward-looking information to conform
such information to actual results or to changes in our
expectations except as otherwise required by applicable securities
legislation. Readers are cautioned not to place undue reliance on
forward-looking information.
Important notice
The contents of this announcement have been prepared by and are
the sole responsibility of Bacanora.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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