Bacanora Lithium PLC (LON:BCN) has told investors that its Chinese backer Ganfeng Lithium has exercised its option to increase its stake in the Sonora lithium project in Mexico.
Gangfeng is a cornerstone investor in Bacanora and also an offtake partner for the Sonora project.
The Chinese firm will subscribe for 73.95mln new shares in the SLL vehicle, an operational holding company for the project, giving the Chinese group 50% ownership. Bacanora remains project operator and Ganfeng will lead engineering, procurement and construction.
The AIM-quoted firm said it remains on schedule to kick off initial site works at Sonora in 2021, with production due to start production in 2023.
“We are delighted by this further show of confidence from our partner Ganfeng in the Sonora lithium project,” said Peter Secker, Bacanora chief executive in a statement.
“Their investment further de-risks the Project and reduces the equity demands on Bacanora’s own shareholders to fund Phase 1 of the Project.
“With recent trends in electric vehicle purchases showing significant year on year growth and lithium storage batteries starting to play a strategic role in the storage of renewable energy, the Sonora Lithium Project is now well placed to be in production in 2023 and delivering battery-grade lithium products into the fast-growing energy storage market.”
Wang Xiaoshen, Ganfeng deputy chairman, added: “We have been working with Bacanora on the exciting Sonora Lithium Project for over two years and are delighted to be increasing our investment in what we believe to be a world-class lithium project.
“We continue to support the Company with its engineering and technical development at Sonora and look forward to commencing project construction in 2021, with a target of production in 2023.”