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Canada’s Bacanora Minerals, is up 190 percent so far in 2014, and the company has plans to continue moving full steam ahead with the development of its Sonora lithium project. Bacanora announced on Tuesday that it would begin a “significant drilling and exploration program” to expand its resources at the Mexican project, already ranked among the largest bedrock resources in the world.
Focusing primarily on the La Ventana concession, drilling will also target the Megalit, El Sauz and Fleur concessions at Sonora. With at least 5,000 meters of drilling planned, the program is approximately five times larger than the previous phase of drilling.
As of now, the resource at Sonora is comparable to Western Lithium’s (TSX:WLC) King Valley Project in Nevada and Rio Tinto’s (NYSE:RIO) Jadar project in Serbia. Sonora currently holds indicated resources of 75,320,000 tonnes averaging 3,174 ppm lithium for the La Ventana concession and 120,990,000 tonnes averaging 3,120 ppm lithium for El Sauz and Fleur.
The drill program
Bacanora completed a preliminary economic assessment (PEA) for the La Ventana concession in January 2013, so some infill drilling will focus on determining a detailed open-pit design in support of moving forward with pre-feasibility studies. Other drill work will aim to upgrade portions of the resource from the ‘indicated’ to the ‘inferred’ category. However, the company is definitely keen on improving its overall resources at Sonora, and exploration work will include step out drilling to expand known resources as well as drill testing of targets on the Megalit concessions.
On top of that, Bacanora will start trenching on the Buenavista area of the Megalit concession in order to gather bulk clay samples for metallurgical testing. Work is anticipated to begin in early November.
That’s plenty of work, but Bacanora seems to be sitting well in terms of funding it all. They company’s joint venture partner, Rare Earth Minerals Plc (LSE:REM), recently exercised its second stage option for an agreement with respect to the project, paying US$1 million to Bacanora. Rare Earth Minerals owns a 30 percent interest in Megalit S.A. de C.V. – which owns the Buenavista, Megalit and San Gabriel concessions at Sonora – while Bacanora owns the remaining 70 percent of the company.
Plant and process
Furthermore, Bacanora has contracted Process Engineering LLC for the design of a full-scale 50,000 tonne per year lithium carbonate plant, and the company has also begun testing for the recovery of lithium hydroxide from Sonora. Like many others in the lithium space, Bacanora is targeting potential end users in the electric vehicle battery market, and since battery producers could potentially use either lithium hydroxide or lithium carbonate for the production of lithium-ion batteries, Bacanora is developing process streams for both materials in tandem.
To be sure, the company is already well on track to meet industry requirements. Bacanora announced in April that it had produced battery grade lithium carbonate (material with purity of over 99 percent) based on results from bench scale metallurgical and mineral process testing. A smaller pilot plant was constructed earlier this year.
What’s next?
Bacanora has had quite a run so far in 2014, with its share price gaining 190 percent year to date, but it certainly looks as if there will be plenty more to watch out for in the near future. With an exploration program, metallurgical work and a prefeasibility study all in the pipeline, investors interested in the lithium space will no doubt want to keep an eye on Bacanora Minerals.
At close of day on Tuesday, shares of Bacanora were up 0.87 percent, trading at $1.16.
Securities Disclosure: I, Teresa Matich, hold no investment interest in any of the companies mentioned.
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