Bacanora Lithium closes in on Sonora funding as loss deepens

For the six-month period ended 31 December, the AIM-traded company recorded a loss before tax of £4.3m, up 29.6% compared to the same period the year before, as administrative expenses increased by 65.4% to £3.8m.

Bacanora did not register any revenue as none of its projects are yet in the production stage.

However, the company is optimistic about securing funding for the Sonora project in Mexico as it stated that Japanese battery metals trader Hanwa, SGRF, the sovereign wealth fund of the Sultanate of Oman, RK Mine Finance, Citigroup and Canaccord are working to assist in securing funding for a 35,000tpa lithium carbonate operation at the site.

Chief executive Peter Secker said: "For a junior resource company to have such a blue-chip roster of backers is a measure of the quality of the project, the favourable long-term fundamentals for the lithium market and the proven track record of the Bacanora team in terms of developing and delivering high quality lithium projects."

"The world needs lithium to power the electric vehicles we may one day all be driving and also to help store energy generated from renewable sources."

Meanwhile, its Zinnwald project in Germany will host a feasibility study in the second half of the year after the first production of lithium fluoride samples with over 99% purity from concentrates provided proof of concept that battery grade lithium products can be produced at the site.

"Over the course of the last six months, we have announced a resource upgrade and the successful production of battery-grade samples of lithium fluoride from Zinnwald concentrates. In tandem with the Feasibility Study, we are evaluating the possibility of listing our German subsidiary later this year as part of our efforts to fund the development of a lithium fluoride operation at Zinnwald," said Secker.

Bacanora Lithium's shares were unchanged at 21.75p at 1116 GMT.