Bacanora Minerals to buy 50% stake in German lithium project

The acquisition, which is line with the company's plan to become a global lithium operator focused on projects with significant value accretion potential, will see Bacanora contribute a further €5m towards the cost of completing a feasibility study on the project, which will take about 18-24 months to complete, and have the option but the remaining 50% stake held by SolarWorld within 24 months for €30m.

The Zinnwald project, which produced lithium carbonate in the 1950s, is located in a granite belt that has been mined historically for tin, tungsten and lithium in southern Saxony.

The project benefits from access to the growing market for lithium in Germany driven by the new-found demand for automotive engines in electric cars, renewable energy storage and chemicals industries.

Germany, Bacanora said, will provide the company with potential access to new markets will could diversify risk and complement potential target markets for the company's headline Sonora project in Mexico where a feasibility study is on track to finish this year.

Chairman Mark Hohnen said: "The project fits with both our corporate strategy to develop and operate integrated lithium projects to produce high value lithium products, and also the commercial overlay which drives our acquisition strategy."

"Sonora continues to sit at the heart of our portfolio and having produced battery grade lithium carbonate from our 100% owned pilot plant ahead of finalising off-take agreements in Asia, we are committed to bringing this into production. However, Zinnwald provides us with exposure to an exciting new geographic market and adds hard rock mineralisation to our portfolio."

Shares in Bacanora were up 5.44% to 81.19p at 0933 GMT.