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Bacanora Lithium PLC To Raise Approx US$60 Million Through Proposed Fundraise

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Bacanora Lithium PLC, a lithium development & exploration company involved in the Sonora Lithium Project in Mexico, recently announced a proposed fundraise of approximately US$60 million to fully fund the construction of Stage 1 of the project that it is part of.

The proposed issuance has happened at a price of 45p per New Ordinary Share and the net proceeds from the Fundraising will provide the last chunk of the Company’s 50% share of the financing required for the construction of Stage 1 of its flagship Sonora Lithium Project located in Mexico, being developed in conjunction with joint venture partner Ganfeng Lithium Co. Ltd., the world’s largest lithium metals producer.

The issue of the New Ordinary Shares is structured as a placing of new ordinary shares pursuant to the authorities granted at the Company’s Annual General Meeting held on 11 June 2020.

The capital cost estimated for Stage 1 production of 17,500 tonnes per annum of LCE (lithium carbonate equivalent) at the Project has been optimised by Bacanora to US$407m from initial estimates of US$420m. In addition to the US$407m capital cost, the Company estimates that US$37m of additional funding will be required for working capital purposes at the Project level. Therefore, the total funding required for Stage 1 of the Project is estimated to be US$416m, US$444m (Total Project Development Cost) less the expected cash in SLL (sustainability linked loan) worth US$28m post completion of the Ganfeng Option exercise.

All the required construction and operational approvals are in place (subject to raising the financing) for Bacanora to begin the construction of the Project.

Upon the completion of the exercise of its option, Ganfeng will be responsible for funding its 50% pro rata share of the Construction Funding, amounting to a total of approximately US$208m.

As a result, the Company’s share of the Project financing is US$208m. The proceeds from the fundraise will allow Bacanora to arrange approximately 30% of this amount.

Clear Capital Markets assisted the company’s corporate broker in this fundraise. If you are interested in raising funds or taking part in future company fundraisings, please contact us.

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