21 May Bacanora Lithium receives £14 million cash injection from China’s Gangfeng
China’s Gangfeng Lithium – the world’s largest lithium metal producer – has made a £14.4 million investment in London-listed Bacanora Lithium, in a bid to secure additional supply of the coveted battery metal.
Gangfeng is purchasing a 29.9% stake in Bacanora at 25p per share but can also take a 22.5% direct stake, worth £7.56 million, in the firm’s flagship Sonora lithium project in Mexico, with the option to increase the stake to 50% within two years.
The investment comes at a crucial time for Bacanora, after the company had been searching for investors to help fund the construction of an initial 17,500 tonnes per annum (tpa) lithium carbonate operation at Sonora.
The cost of the first phase had been estimated at around US$460 million, however If Ganfeng exercises its full 50% option over Sonora, the amount needed will effectively be halved said Bacanora’s chief executive Peter Secker.
“With a senior debt facility with leading resource finance provider RK Mine Finance secured and the proposed strategic investment from Ganfeng, we have made significant progress towards the completion of the construction funding of the Sonora Project,” he said.
In return, Gangfeng has the right to acquire 50% of all Sonora’s lithium production during the first phase, with an option to increase this offtake to 75% in phase 2 when production will rise to 35,000 tpa.