2017 start date for Mexican Lithium projectNext door neighbours to Alix targetting mine construction for 2017:
Bacanora Minerals (AIM: BCN) has just released the pre-feasibility study for its Sonora lithium project in Mexico. A bankable feasibility study will be undertaken over the next year, with the intention of raising finance to start development of the mine during the second quarter of 2017.
Lithium is much in demand for batteries and has become the leading power storage technology for both small-scale electronic devices and electric vehicles. It’s hard to see any reason why demand should slacken for many years with forecasters expecting the global lithium market to quadruple between 2013 and 2020 to $70 billion.
There are four big lithium miners in the market with much of the production centred on Latin America. Pricing has been stable over the last few years and the commodity is sold on contract to the big cathode manufacturers. One new project in Argentina is just coming on stream and will satisfy about one to two years growth in market demand. Bacanora’s planned initial phase of production will be of a broadly similar size - around 17,500 tonnes.
The market price of Lithium is roughly $5,500 per tonne and CEO Peter Secker estimates his production cost at Sonora will be $2,700. The resource size was upgraded at the end of last year to 9 million tonnes and more drilling will take place this year to define it more accurately as part of the bankable feasibility study. Analysts view this as a world-class, low-cost asset. A pilot plant is already producing samples which will support negotiations with potential offtake partners. The aim is to get two contracted buyers on board later this year to add weight to the financing effort.
If all goes according to plan and Bacanora raises the funds, construction will take about 18 months with commissioning in late 2018. Phase one will cost $240 million, with scope to double production in a subsequent $177 million phase two development.