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Bacanora Lithium seeks cornerstone investor to help fund Sonora project

Bacanora Lithium PLC is seeking a cornerstone investor to support a fundraising for its Sonora lithium project in Mexico, Financial Times reported Oct. 18, citing CEO Peter Secker.

Secker said the company is considering a London market comeback after it scrapped a US$100 million placement in July due to volatile global commodities markets.

"We're talking to a number of strategic investors looking for a big brother," Secker said. "We'll go back to the market once the lithium price has stabilized and when we have someone behind us that will make the financing easier."

Bacanora Lithium requires US$460 million for the open-pit construction, with US$240 million secured in a mix of debt and a conditional US$90 million investment by Japanese trading company HANWA Co. Ltd. and the State General Reserve Fund of Oman.

Secker noted that while domestic Chinese lithium prices have decreased, global prices for battery-grade lithium have remained at about US$13,000/t. A late-2017 feasibility study on Sonora defined life-of-mine operating costs averaging US$3,910/t.

"The demand is still strong for battery-grade material," Secker told the Financial Times. "Some of the announcements from BMW and Volkswagen show they are moving down the electrification track much quicker than expected."

The Sonora mine was scheduled to start producing in 2020 at a rate of 17,500 tonnes per year of lithium carbonate equivalent. The mine is expected to be Mexico's first significant lithium producer.