Bacanora Minerals feasibility study values its Mexican lithium project at $1.25 billion

Lithium exploration company Bacanora Minerals (AIM/TSXV:BCN) has completed a feasibility study on its flagship Sonora development in Mexico, which valued the project at US$1.35 billion.

The positive feasibility study has taken the mining junior one step closer to introducing a fresh supply of battery-grade lithium to the market, as chief executive Peter Secker proclaimed the project has the potential to become on the world’s top lithium carbonate mines.

Canada and UK-based Bacanora aim to begin phase one of production at Sonora by 2019, initially yielding 17,500 tonnes per annum (tpa) at a cost of $420 million, as laid out by the feasibility.

Four years later, phase two will see production double to 35,000 tpa at a cost of $380 million. Operating costs were estimated to be as low as $3,190 per tonne, considerably below the current market price of between $12,000-20,000 per tonne.

Secker added that his company has over $20 million in the bank for pre-development work and has a strong shareholder base, including investment from BlackRock, M&G and Capital Group.

The rapidly flourishing electric vehicle (EV) market is reliant on widescale global lithium supply, as the energy metal is an imperative component of lithium-ion batteries which power EVs.

Consequently, Secker believes Bacanora is well-poised to take advantage of the growing demand for lithium. “It’s a very good time for a new lithium producer to be coming into the market,” he said. “It’s going to be a magical decade.”

Bacanora’s AIM-listed shares rose 2.1% to 97p a share at the time of writing.

@RGNonline