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Chinese institutional fund takes 19.89% Bacanora stake through £31.2M investment

A Chinese institutional fund management group, NextView, agreed to acquire a 19.89% equity interest in Bacanora Minerals Ltd. and purchase up to 15,000 tonnes of lithium per annum from the company.

Bacanora will place 32,976,635 common shares at 94.53 British pence per share for proceeds of about £31.2 million, which will be used to advance the Sonora lithium project in Mexico.

The company will supply 5,000 tonnes of lithium carbonate per annum to NextView produced from the first stage of production at Sonora.

Bacanora also has a firm commitment to supply 8,000 tonnes per annum during the second stage and a best endeavors promise to supply a further 7,000 tonnes per annum from the second stage.

NextView plans to nominate its president, Yaping He, as a nonexecutive director of Bacanora.

A recent feasibility study for the Sonora project estimated a posttax net present value of US$802.5 million at an 8% discount rate and an internal rate of return of 21.2%, with average life-of-mine operating costs of US$3,910 per tonne of lithium carbonate.

Meanwhile, Bacanora said that "in view of the size of the opportunity provided by the Chinese and Japanese markets for lithium," it intends to kick off a review of the parameters of its planned two-stage operation at the Sonora project with a view to increasing the first stage from 17,500 tonnes per annum.

The NextView investment is expected to close in January 2018.