Bacanora Lithium confirms first approval received for Ganfeng investment

Bacanora Lithium updated the market on its investment agreement and offtake agreement with global lithium company Ganfeng Lithium on Thursday.

The AIM-traded firm confirmed on 28 June that the signed agreements had been submitted to the relevant authorities in China for approval and completion.

It said the first of those approvals, from the country’s Ministry of Commerce, had now been received.

The remaining two approvals required ahead of completion of the strategic investment were currently being processed by Ganfeng, with further updates set to be provided as the approval process proceeds.

“Completion of the Strategic Investment 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,” the board said in its statement.

Under the strategic investment, Ganfeng was set to acquire 29.99% of Bacanora, and 22.5% of Sonora Lithium - the holding company for the Sonora Lithium Project.

It would also make additional long-term offtake at a market-based price per tonne, of 50% of stage one lithium production and up to 75% of stage two lithium production.

“Ganfeng Lithium is the world's third largest and China's largest lithium compounds producer and the world's largest lithium metals producer in terms of production capacity as of 31 December 2017, according to CRU International,” the board explained.

“Ganfeng’s operations are vertically integrated, encompassing all critical stages of the value chain, including upstream lithium extraction, midstream lithium compounds and metals processing as well as downstream lithium battery production and recycling.

“It has one of the most comprehensive product offerings split into five major categories of more than 40 lithium compounds and metals products.”