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Cadence Minerals #KDNC – Bacanora Lithium (AIM: BCN) – Commencement of early site works at Sonora Lithium Project.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note that Bacanora Lithium (AIM: BCN) (the “Company” or “Bacanora”) has commenced initial site activities at the Sonora Lithium Project (the “Project”), located in Mexico. This milestone follows the Company’s successful US$65 million fundraise last week, which, in combination with existing cash and the undrawn portions of its debt financing facility, will finance Bacanora’s 50% share of the capital cost required for Stage 1 of the Project.

Bacanora is building the Project together with its partner, Ganfeng Lithium Co., Ltd. (“Ganfeng”), the world’s largest lithium metals producer. Both parties are working towards a development timetable for Sonora, with scheduled production of battery grade lithium products in 2023.

Initial site works

The Company has engaged a local specialist ecological services company based in Sonora to begin initial site works. These activities will involve the rescue and removal of surface vegetation and topsoil in the area required for the construction of the lithium processing plant. These activities are being performed in compliance with its obligations pursuant to its environmental approvals. The excavated material will be stockpiled at a location adjacent to the plant site and will be stored in an approved manner in order that it can be incorporated into the future project rehabilitation schedule. A team of 15 personnel has been deployed to site, including two ecologists, a biologist, and a forestry engineer. The majority of these personnel reside in the local area. In addition, the Bacanora construction team has commenced the preparatory work required to upgrade the main access road to the site in preparation for providing access for heavy equipment to commence the bulk site earthworks later in the year. The tender process for this work has commenced and is focusing on using local construction and engineering groups from the surrounding Sonora region. Work is also currently underway to commence the tender process for the site accommodation and ancillary facilities, scheduled to be commissioned by the end of Q2, 2021.

Engineering works

Transmission of engineering drawings and documentation from Ganfeng and its equipment suppliers in China has commenced and the final engineering packages will be delivered to Bacanora in Q2, 2021. In addition, Bacanora is working with its principal equipment suppliers to finalise a schedule for the delivery of the larger items of processing equipment for delivery in 2022.  As part of this schedule, orders for the larger items of process equipment that have delivery schedules of over 12 months will be placed during Q3, 2021 for delivery to site in late 2022.

Community Engagement

Bacanora continues to work with the Sonora Government and the local municipalities in the region of the mine site. With the critical step of project funding now completed, the Company will continue to develop its community engagement strategy on education, training and development of local workforce as the Project transitions through the development stage into operations in 2023.

The Company’s latest presentation is also available for download here: https://www.bacanoralithium.com/investor-relations/restricted-company-presentations/

Link here for the full BCN announcement: https://www.londonstockexchange.com/news-article/BCN/commencement-of-early-site-works-at-sonora/14859200

Peter Secker, CEO of Bacanora said:  “I am delighted to announce Bacanora has commenced initial site works at the Sonora Lithium Project, located in Mexico. This milestone cements Bacanora’s transition into a mine-development company as it looks to fulfil its ambition of becoming a lithium producer in 2023. I look forward to updating the market with further positive progress reports as we build the Sonora Lithium Project in conjunction with our strategic investor and project partner, Ganfeng.” 

Cadence CEO Kiran Morzaria added:  “Today’s announcement not only marks a significant step towards Bacanora’s ambition to become a lithium producer in 2023, but also reflects positively on our ambitions for the Mexalit and Megalit joint ventures with Bacanora, which are part of the Sonora 20-year mine plan. We look forward to further news on the mine development.”

Cadence Minerals – Holdings in Mexalit and Megalit: 

Bacanora is a lithium exploration and development company. Cadence holds 30% of Mexalit and Megalit joint venture companies. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which form part of the 20-year mine plan of the Sonora Lithium Project in Northern Mexico.

This news release is not for distribution to United States Services or for Dissemination in the United States.

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For further information:

Cadence Minerals plc                                                    +44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding Cadence’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of Cadence. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence cannot assure investors that actual results will be consistent with such forward-looking statements.

Cadence Minerals #KDNC – Bacanora Lithium #BCN Sonora Lithium Project, Lithium Market & Covid-19 Update

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the update published today by Bacanora Lithium (AIM:BCN) (“Bacanora”), both on the Lithium market, and on its activities at the Sonora Lithium Project in Mexico (‘Sonora’ or the ‘Project’) in light of the ongoing Covid-19 pandemic.

Cadence Minerals – Holdings in Mexalit and Megalit:

Bacanora is a lithium exploration and development company. Cadence holds 30% of Mexalit and Megalit joint venture companies. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which form part of the 20-year mine plan of the Sonora Lithium Project in Northern Mexico.

Sonora Operations

The Pilot Plant has completed the bulk sampling required for the Sonora plant and engineering designs. These samples have been sent to the Company’s relevant partners in the USA and China for optimisation of the final designs.

Engineering

All engineering work is now being undertaken off-site. GR Engineering (“GRES”) has completed its concentrator design work and will integrate this into the overall project scope. Importantly, the Company’s joint venture partner, Ganfeng Lithium (“Ganfeng”), has also completed its flow sheet design testwork for the production of battery grade lithium from the samples provided by the Pilot Plant; Ganfeng is now integrating these results into a larger scale design, and remains on schedule to deliver its final engineering packages at the end of Q4 2020. Lastly, Ganfeng is working with its equipment suppliers to determine equipment delivery times and process guarantees.

Bacanora therefore remains on schedule to commence initial site works at Sonora in H1 2021, subject to completion of financing, which would enable commencement of production at the plant in 2023. This timeframe coincides well with the anticipated increase in lithium demand from European, Asian and US electric vehicle manufacturers expected that year*.

Covid-19 and the Mining Industry in Sonora

The number of new Covid-19 cases continues to fall in the Sonora district of Mexico and lockdown restrictions are slowly being lifted. The Company continues to monitor the situation closely, with the health and safety of its employees and communities remaining its top priority.

New health and safety protocols and social distancing will remain in place at the Pilot Plant for the foreseeable future but will not impact the Company’s ability to continue to work on site. Most of the larger scale mining operations within the Sonora district, are now back in production and Bacanora will have employees back in the field in October to survey site access roads in preparation for site access works in Q2 2021.

Recently, the federal government implemented austerity measures as a result of COVID-19, one of which is the restructuring of several undersecretary positions in various sectors, including that for mining.  The functions, staff, and responsibilities of the areas that reported to the undersecretary for mining remain intact, and will continue to function as normal, under the responsibility of the Secretariat of the Economy.  President Andrés Manuel López Obrador (“AMLO”) and the Secretariat of the Economy have consistently supported investment in the mining sector and specifically projects with downstream applications, such as Bacanora’s Sonora Lithium Project. This government wide austerity measure does not represent a change in those policies.

Lithium Market

Recent forecasts from Chile, the world’s largest producer of downstream battery grade lithium products, indicate that, as electric vehicles sales in Europe and China continue to rebound post the Covid-19 downturn, the electric car industry is forecast to dominate demand for lithium over the next ten years. By 2030, EV demand will account for more than 75% of consumption, up from 30% in 2019. As a result, demand for lithium for electric vehicles would surge to 1.4 million tonnes by 2030**, almost a five-fold increase from the current 300,000 tonnes of demand in 2019***.

* https://www.iea.org/reports/global-ev-outlook-2020  

** https://uk.reuters.com/article/chile-lithium/electric-cars-to-account-for-79-of-lithium-demand-by-2030-chile-idUKL1N2FS22Q  

*** http://coinnews.tv/lithium-outlook-2019-a-transition-year-ahead/  

The full Bacanora release can be found at: https://www.londonstockexchange.com/news-article/BCN/sonora-operational-update/14680960

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. 

– Ends –

For further information:
Cadence Minerals plc                                                +44 (0) 7879 584153
Andrew Suckling Kiran Morzaria   

WH Ireland Limited (NOMAD & Broker)             +44 (0) 207 220 1666
James Joyce James Sinclair-Ford   

Novum Securities Limited (Joint Broker)            +44 (0) 207 399 9400
Jon Belliss  

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

Cadence Minerals #KDNC – Bacanora Lithium #BCN – Sonora Lithium Project, Lithium Market & Covid-19 Update.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) notes the update published today by Bacanora Lithium (AIM:BCN) (“Bacanora”), both on the Lithium market, and on its activities at the Sonora Lithium Project in Mexico (‘Sonora’ or the ‘Project’) in light of the ongoing Covid-19 pandemic.

Cadence Minerals – Holdings in Mexalit and Megalit:

Bacanora is a lithium exploration and development company. Cadence holds 30% of Mexalit and Megalit joint venture companies. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which form part of the 20-year mine plan of the Sonora Lithium Project in Northern Mexico.

Lithium Market and Project Development

Whilst demand for internal combustion vehicles has been significantly impacted by the spread of Covid-19 and a general economic slowdown, electric vehicle (“EV”) demand in Europe increased over 50% during first quarter 2020*. In addition, automotive companies have recently outlined plans to spend more than US$140** billion on EV production. This is an industry shift that will require producers of specialist materials and metals for lithium batteries to dramatically lift output. As a result, lithium demand is anticipated to grow 800% by 2030. Bacanora continues to prioritise its development schedule for Sonora despite Covid-19 limitations, with a goal of being able to complete financing for the Project and initiate site works in H1 2021.  This timetable will enable Bacanora to commence lithium deliveries to its offtake partners, Ganfeng Lithium (“Ganfeng”) and Hanwa Corporation, in 2023. Ganfeng remains fully committed to the advancement of Sonora’s development and continues to progress its investment schedule at the Sonora project level.

Sonora Operations

In Mexico, the Sonora government continues to maintain measures to prevent the spread of Covid-19 which includes, amongst other measures, the closing of schools and all non-essential business operations as well as cancelling events of more than 10 people. Accordingly, Bacanora’s Hermosillo pilot plant (“pilot plant”) was placed in care and maintenance in late March 2020 after shipping samples to its engineering partners in the USA and China in order to maintain the Front End Engineering Design (“FEED”) schedule. The pilot plant will remain closed until conditions are considered safe and the Government lifts its restrictions.  It is currently anticipated that the pilot plant will re-open in June 2020.

Bacanora CEO Peter Secker commented: “The entire team at Bacanora and our partners continue to work as best as we can during this pandemic. We remain fully focussed on progressing the final parts of the detailed design work for our flagship Sonora Lithium Project, located in Mexico. Bacanora also boasts a strong cash position and benefits from the support of its cornerstone shareholders, who are globally significant players in the electric vehicle industry.  The Company’s strategy remains the same and with the goal to deliver first product to its off-take partners in early 2023, importantly coinciding with the expected significant growth in EV demand.”

Cadence CEO Kiran Morzaria commented: “Our thoughts are with the Bacanora team as they work through the Covid-19 pandemic. We note Bacanora’s update on the Sonora development timetable, and in particular the Lithium market in general, detailing the forecast increase in demand to meet the ramp-up in EV production.”

(* www.euractiv.com/section/electric-cars/news/electric-car-sales-in-europe-jumped-57-in-q1-2020/

**www.bloomberg.com/amp/news/articles/2020-05-11/to-avoid-battery-metal-pinch-carmakers-urged-to-invest-in-mines )

The full Bacanora release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/14555542.html

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

– Ends –

 

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

 

Cadence Minerals (KDNC) Bacanora Lithium (BCN) – Sonora Lithium Project Update.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the update published today by Bacanora Lithium (AIM:BCN) (“Bacanora”) on its activities at the Sonora Lithium Project in Mexico (‘Sonora’ or the ‘Project’) following the recent completion of the Strategic Investment by leading global lithium company Ganfeng Lithium Co., Ltd. (‘Ganfeng’).

Cadence Minerals – Holdings in BCN, Mexalit and Megalit:

Bacanora is a lithium exploration and development company. Cadence holds 30% of Mexalit and Megalit joint venture companies. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which forms part of the 20-year mine plan of the Sonora Lithium Project in Northern Mexico.

Ganfeng Review and Process Testwork

The Bacanora project team in Mexico continues to progress the final design work for the mine site, infrastructure, concentrator and kiln sections of the processing plant. Representative samples have been sent to Ganfeng in China. Ganfeng’s technical review of the hydrometallurgical circuit has commenced with a view to potentially sourcing key sections of the lithium production equipment from their current equipment suppliers in China. This work is expected to be completed in H1 2020. As part of this technical review, both Bacanora and Ganfeng continue to develop testwork programmes for the potential production of other downstream high value lithium products in addition to the battery-grade lithium carbonate used in the Company’s feasibility study. The results of this work will be reviewed over the next few months. 

The feasibility study indicated highly favourable economic indicators for a battery grade lithium carbonate operation at Sonora, including US$1.25 billion NPV, 26% IRR and operating costs among the lowest in the industry at around US$4,000/t of lithium carbonate (see announcement of 13 December 2017 for further details).

Financing

Once Ganfeng completes its review, Bacanora will deliver final engineering costs for Stage 1 of the Project, following which Bacanora will look to finalise the funding package for the Project.   At this stage, the Company believes that the engineering costs will remain in line with the 2018 Feasibility Study forecast of approximately US$420 million. 

The recent 29.99% equity investment by Ganfeng Lithium and their 22.5% investment at the project level, in combination with a combined 100% off-take held by Ganfeng and Hanwa Corporation (‘Hanwa’) for Stage 1 production of 17,500 tonnes per annum of lithium products at the Project demonstrates the strong support that both these cornerstone investors have shown in Sonora. Combined, Ganfeng and Hanwa have a see-through ownership of more than 50% of Sonora.  In the last 18 months, Bacanora has already secured a US$150 million debt facility with RK Mine Finance and continues to explore additional sources of project funding. The 22.5% project investment and 29.99% equity investment from Ganfeng, in addition to ongoing support from Bacanora’s other shareholders and off-takers, ensures a very solid position for finalising the project funding stage of the Sonora development.

Bacanora had US$40 million of cash at the end of October 2019, which will enable it to commence the bulk earthworks on site in H1 2020 and start to upgrade the primary access road to site. Bacanora will also be able to use part of these funds to place the initial orders for some of the longest lead-time items in the concentrator, pyrometallurgy and hydrometallurgy sections of the lithium plant.

General Market Conditions

There have been a number of media reports over the past few months highlighting the impact of an over-supply of lower grade bulk spodumene concentrates from Australia into the Asian lithium converter markets. Recently a number of these projects have been delayed, closed, reported decreased production or put on care and maintenance. With the majority of these concentrate operations being at the higher cost level, this supports the Bacanora strategy of developing a fully integrated lithium project that produces a final battery grade lithium product at much lower costs rather than an intermediate concentrate.

Bacanora CEO Peter Secker said: “Recent research reports predict the lithium industry would need US$30 billion in investment in upstream capacity to meet its forecast of 1 million tonnes of supply by 2025 (a threefold increase on current levels).  In order to secure funding, any new lithium project needs to be low on the operational cost-curve, without having to rely on by-product credits to artificially lower that cost per tonne. A project also needs to have reliable engineering cost estimates.  A project needs to be of sufficient scale, in a location with a favourable environmental and political climate and deliver a high-grade end product. The Sonora Lithium Project is one of the very few projects globally that can deliver on all of these factors.”

The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/14301803.html

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. 

– Ends –

 

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling  
Kiran Morzaria  
   
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce  
James Sinclair-Ford  
   
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss  

 

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

  

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

 

Cadence Minerals #KDNC – Bacanora Lithium #BCN Signing of Investment and Offtake Agreement with Ganfeng Lithium.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement today by Bacanora Lithium (AIM:BCN) (“Bacanora”) that it has signed its Investment Agreement and Offtake Agreement (‘the Strategic Investment’) with Ganfeng Lithium Co., Ltd. (“Ganfeng” or “GFL”), the world’s largest lithium metals producer in terms of production capacity and the world’s third largest lithium compounds producer. Both agreements, which are on substantially the same terms as outlined in the Company’s announcement on 20 May 2019, have now been submitted to the relevant authorities in China for approval and completion. Completion of the Strategic Investment is anticipated by the end of July 2019 and would form a major part of the Company’s finance package for an initial 17,500 tonnes per annum lithium carbonate operation at the large scale, high grade Sonora Project in Mexico.

Bacanora is a lithium exploration and development company. Cadence holds approximately 1.5% of Bacanora’s equity and 30% of Mexalit and Megalit joint venture companies. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which forms part of the 20-year mine plan of the Sonora Lithium Project in Northern Mexico.

Announcement Highlights:

  • Cornerstone strategic investment of 29.99% in Bacanora for £14,400,091
    • GFL has been granted pre-emption rights proportionate to its shareholding in Bacanora.
    • GFL shall appoint one Director to the Board of Bacanora.
  • Project level investment of 22.5% in Sonora Lithium Ltd (“SLL”), the holding company for the Sonora Lithium Project, for £7,563,649.
    • GFL has an option to increase its interest in SLL to up to 50% within 24 months at a valuation based on the share price of Bacanora at the time of subsequent investment.
    • GFL shall appoint one Director to the Board of SLL.
  • Additional long-term offtake at a market-based price per tonne.
    • 50% of Stage 1 lithium production.
    • Up to 75% of Stage 2 lithium production.
  • GFL will complete a review within six months of the EPC engineering design and capital costs of Sonora Lithium Project with a view to reducing costs and accelerating the timetable.

The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/14129811.html

Cadence Minerals CEO Kiran Morzaria commented:“On behalf of Cadence Minerals, we are delighted to see Bacanora sign this milestone agreement with Ganfeng to develop the Sonora Lithium project. As Bacanora CEO Peter Secker says, Ganfeng’s operational expertise and industrial credibility is a strong endorsement of the Sonora Project’s potential.”

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

– Ends –

 

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss

 

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

 

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

Cadence Minerals #KDNC – Bacanora Lithium #BCN Proposed Strategic Investment by Ganfeng Lithium

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement today by Bacanora Lithium (AIM:BCN) (“Bacanora”) that it has signed a non-binding Heads of Terms for a strategic investment in both Bacanora and its flagship Sonora Lithium Project (“Sonora” or “Sonora Project”) in Mexico (“the Strategic Investment”) by Ganfeng (“Ganfeng” or “GFL”) , the world’s largest lithium metals producer in terms of production capacity and the world’s third largest lithium compounds producer. Completion of the Strategic Investment would form a major part of the Company’s finance package for the construction of an initial 17,500 tonnes per annum (“tpa”) lithium carbonate (“Li2CO3”) operation at the large scale, high grade Sonora Project. .

Announcement Highlights:

  • Proposed cornerstone strategic investment by top tier global lithium producer Ganfeng at both the corporate and Sonora Lithium Project level.
  • Includes subscription for a 29.99% interest in Bacanora, in addition to an initial 22.5% direct interest in the Sonora Lithium Project with an option to increase up to 50% of the Project.
  • Additional long-term offtake for both Stage 1 and Stage 2 lithium production.
  • GFL would assist Bacanora in the finalisation of the EPC engineering design and the subsequent construction and commissioning of Sonora Lithium Project.
  • Strategy would be in place to ensure project timetable of first production in 2021

As part of the Strategic Investment, GFL would subscribe for a 29.99% equity interest in Bacanora for a cash consideration of £14,400,091, being 57,600,364 new ordinary shares in the Company (the “Private Placement”), at a price of 25 pence per share, representing the volume weighted average price (“VWAP”) on AIM of the Company’s shares over the previous 20 trading days at the time of negotiation. Subject to the completion of the Private Placement, GFL would have the right to nominate one director to the main board of Bacanora.  GFL would also be granted pre-emption rights in relation to new share issues proportionate to its interest in Bacanora.

In addition, as part of the Strategic Investment GFL would be granted the right to acquire an initial 22.5% interest in a subsidiary of Bacanora which holds the Sonora Project (“Project Level Company”), for a cash payment of £7,563,649, equivalent to a price of 25 pence per share on the same basis as the Private Placement (the “Project Level Investment”).  Subject to the completion of the Project Level Investment, GFL would have the right to nominate one director to the board of the Project Level Company.  GFL would also be granted an option to increase its interest in the Project Level Company to up to 50% from 22.5%, within 24 months of the completion of the Project Level Investment.  The valuation of any additional investment in the Project Level Company by GFL would be based on the share price of Bacanora at the time of the additional purchase.

The £14,400,091 capital raised via the Private Placement and the £7,563,649 via the Project Level Investment would be used for the continued development and commercialisation of the Sonora Project. Under the proposed terms of the Strategic Investment, GFL would play an active role in this process. Within 6 months of the Strategic Investment, GFL would complete a review of the current EPC engineering design focusing on reducing the capital cost of the Sonora Project from the current figure of approximately US$420 million and accelerating the construction timetable from that envisioned in the Feasibility Study.  Based on the results of this review, GFL would assist with finalising an EPC engineering contract for the mine and plant construction and would work with Bacanora during the construction, commissioning and early operations phases of the Sonora Project. GFL would also provide a plant and process commissioning team to assist Bacanora in commissioning the Sonora Project.

Conditional on the completion of the Strategic Investment, GFL will be granted exclusive offtake rights to purchase 50% of all lithium products produced at Sonora for the life of the mine during Stage 1 planned production of Li2CO3 (“Offtake Agreement”).  GFL would also have the option to increase its off-take to 75% of all lithium products during Stage 2 of production.  GFL would pay market-based price for every tonne of Li2CO3 sold under the Offtake Agreement.

The Strategic Investment is conditional on, amongst other matters, completion of due diligence, definitive documentation and regulatory approvals.  Further announcements will be made in due course.

The Strategic Investment follows the completion of a Feasibility Study, which confirmed the attractive economics and low operating costs of a 35,000 tpa battery grade (+99.5%) Li2CO3 operation at Sonora: US$1.253 billion pre-tax project Net Present Value (“NPV”), 26.2% Internal Rate of Return (“IRR”), and Life of Mine (“LOM”) operating costs of c.US$4,000/t of Li2CO3 (see announcement dated 13 December 2017).

Bacanora is a lithium exploration and development company. At the end of April 2019 Cadence held approximately 1.6% of Bacanora’s equity and 30% of Mexalit and Megalit joint venture companies. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which forms part of the 20-year mine plan of the Sonora Lithium Project in Northern Mexico.

The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/14079306.html

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

– Ends –

 

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.  

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

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