Bacanora Minerals saw its share price rise Monday morning on news of an updated mineral resource estimate for its Sonora lithium project in Mexico.
Bacanora Minerals (TSXV:BCN,LSE:BCN) saw its share price rise Monday morning on news of an updated mineral resource estimate for its Sonora lithium project in Mexico.
The company’s share price was up 5.33 percent, at $1.58, on the TSX Venture Exchange as of 1:17 p.m. EST, with trading volumes roughly four times the daily average. In London, Bacanora’s share price was up 3.48 percent, at GBP0.8175. Bacanora’s joint venture partner for Sonora, Rare Earth Minerals (LSE:REM), gained 0.64 percent to reach roughly 0.78 pence in London.
Overall, Bacanora reported a 337-percent increase in the indicated mineral resource for its clay-based deposits at Sonora; it now stands at 5 million tonnes of lithium carbonate equivalent. The inferred resource at the project was reduced from the 6.3 million tonnes reported previously to 3.9 million tonnes of lithium carbonate equivalent.
“We have now completed a critical part of the PFS, and this resource upgrade represents a major step forward in terms of mine planning and life of mine,” said Bacanora’s chairman, Colin Orr-Ewing, in Monday’s release.
Bacanora is working towards completing a preliminary feasibility study (PFS) for Sonora, and the company recently announced raised roughly C$17.8 million for development of the project. “With the completion of our recent financing, we now have sufficient funds in place to carry us through the next phases of the Sonora Lithium Project’s development, specifically a Feasibility Study (assuming satisfactory completion of the PFS), and the upgrading of our Pilot Plant,” Orr-Ewing added.
The company also got plenty of attention this past summer when it announced a conditional supply agreement with Tesla Motors (NASDAQ:TSLA). However, it’s worth noting that the agreement is light on detail, and that a number of analysts have been hesitant regarding what the announcement could mean for the project long term.
For example, Chris Berry of House Mountain Partners and the Disruptive Discoveries Journal called the deal an “out-of-the-money call option strategy,” at the time, while Joe Lowry of Global Lithium agreed (Lowry shares more of his views on Tesla’s apparent lithium supply strategy here).
Bacanora expects to complete its PFS for Bacanora in the first quarter of 2016. The company is up 87 percent year-to-date on the TSXV, and has seen its share price gain 74 percent in London over the same period.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.