Chinese institutional fund management group NextView Capital has reached an agreement to acquire a 19.89% equity interest in Bacanora Minerals, a lithium producer listed in London, UK, and Canada.
Under the agreement, the acquisition of the interest will take place through the placement of 32,976,635 common shares in Bacanora.
Proceeds from the placement are expected to be around £31.17m and will be used for the development of the company’s Sonora lithium project.
The agreement also includes an offtake component wherein Bacanora is required to supply NextView with 5,000tpa of lithium carbonate produced at its Sonora project in Mexico from its Stage 1 of production.
Bacanora Minerals CEO Peter Secker said: “NextView’s investment and offtake agreement underlines both the quality of our asset and the progress we have made to date.
“Together with highly favourable demand/supply dynamics for lithium carbonate driven by fast-growing end-markets such as electric vehicles and energy storage, the investment case for Bacanora is clear.”
The development comes after the company recently completed a feasibility study, which determined that the Sonora project has pre-tax net present value (NPV) of $1.253bn, an internal rate of return (IRR) of 26.2%, and life of mine (LoM) operating costs of $3,910/t of lithium carbonate.
NextView managing partner and president Yaping He said: “Through this investment, NextView Capital intends to build a long-term strategic partnership with Bacanorato capitalise on the expanding lithium battery raw materials market, which has significant potential given the electric vehicle industry in China, the largest new energy vehicles market in the world.”
The offtake agreement also includes a commitment to supply 8,000tpa of lithium carbonate during Stage 2 of the project and potential supply of a further 7,000tpa.
Bacanora expects to begin construction of mining and large-scale processing facilities at Sonora in the first half of next year.