Bacanora Lithium said it had signed a non-binding agreement for China's Ganfeng Lithium to buy a 30% interest in the company for around £14.4m and separate 22.5% direct shareholding in its Sonora project in Mexico. The agreement included an option for Ganfeng to raise its interest in the project to 50%. Ganfeng would also buy lithium from both stage one and stage two production. The strategy would be in place to ensure a project timetable of first production in 2021, Bacanora said. Ganfeng would purchase its 30% stake in the company by subscribing for Bacanora shares at 25p each. The purchase of a 22.5% stake in the mine would cost about £7.6m, equivalent to a price of 25p per share on the same basis as the private placement. The valuation of any additional investment in the project would be based on Bacanora share price at the time. 'The proposed strategic investment from Ganfeng, a top three lithium producer, will be a major milestone in the development of the Sonora project,' chief executive Peter Secker said. 'Not only will it provide industry validation of Sonora's clear potential to become a key supplier of battery grade lithium but, subject to Ganfeng exercising its option to increase its interest in the Sonora Project to 50%, our share of the capital costs required to construct an initial 17,500 tpa Li2CO3 operation at Sonora would be halved.' At 3:01pm: (LON:BCN) Bacanora Minerals Ltd Ord Npv di share price was +1.75p at 28.5p
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