Bacanora Lithium Share Discussion Threads

[adobbing] 26/10/2018 18:10

BCN Sonora is not hard rock, it is surface clay. Extraction is simple and cheap and the end product is an extremely high quality battery grade product.

It is much higher quality than brine derived products and this is reflected in the price.

This information has been widely available for years and even the smallest amount of research would confirm this.
The original attraction of the project was based on the ease of extraction and the inherent low cost of production. The pilot plant demonstrated the technology and the quality of the product.
Numerous RNS’s both on here and on the previous TSX Canadian stock listing, will chart the progress made on test drills and feasibility studies over the last few years.

[jotoha2] 26/10/2018 17:38

There is of course the risk that by the time this lot is in production , new technology will be in place which will not be lithium related , am expecting some sort of a bounce once financing is sorted , otherwise its a penny stock.

[pugugly] 26/10/2018 12:01

Basic problem (imo)is that BCN resource is clay/hard rock which is a higher cost mechanic than brine - If Lithium price retreats - as many have predicted - will be squeezed to negative cash flow by the much lower cost brine based producers - The share price though of virtually all Lithium producers/exploreres has fallen by about 20% to 60% over the last year. -

[ukgeorge] 26/10/2018 11:41

chart starting to look good

From Spangel

Company News
Bacanora Lithium (BCN LN) 34.8p, Mkt Cap £46.7m – Project updates
• Bacanora Lithium has provided project updates on its lithium projects at Sonora in Mexico and at Zinnwald in Germany.
• At the Sonora project, where the Front End Engineering Design (FEED) is on course for completion by the end of 2018, the completion of preliminary earthworks has resulted “in downward revisions to expected overall bulk earthworks costs - due to the recently acquired plant location at Las Perdices being considerably flatter than original proposed site”.
• The completion of the mass balances and engineering designs for the kilns and crystallisers clear the way for “the final quotes for EPC design and agreement to be actioned” while site visits by potential energy suppliers should enable final supply proposals to be submitted and assessed.
• The company also advises that it has hosted site visits to Sonora by potential strategic investors. Currently, 52% of the US$460m capital requirement for the phase 1 of the 17,500tpa of lithium carbonate production has been “conditionally committed” including US$150m of senior debt and US$65m of equity conditionally from the State General Fund of Oman and an additional US$25m of equity conditionally available from “Bacanora's off-take partner, Hanwa Co., LTD ("Hanwa")”.
• The company states that “Subject to completion of funding discussions and FEED, the Stage 1 project commissioning target at Sonora expected to be in H2 2020”.
• At Zinnwald, the feasibility study remains on course for completion in Q2 2019. The company advises that initial samples of high purity lithium fluoride of potential battery grade quality produced from concentrate samples provides “proof of concept of strategy to produce high value lithium products at Zinnwald”.
• Mineral resource and reserve estimation, detailed mine design and production scheduling and preliminary process design work is well underway and the “EIA [was] approved in 2018”
• Bacanora’s CEO, Peter Secker, highlighted “Zinnwald's potential to play a strategically important role in Europe's rapidly emerging battery technology sector” and its strategic location “in the heart of Germany's industrial region”.
• The company reports a 30th September cash balance of US$24.7m.
Conclusion: Technical work on Bacanaora’s lithium projects in Mexico and Germany are advancing. In Mexico, where the company has conditional funding for 52% (US$240m) of the US$460m capital required for the phase 1 lithium carbonate project, site visits by potential strategic investors have been taking place.

[rimau1] 26/10/2018 08:46

I agree jakecat, this is currently priced to fail. Its all about the funding and at least we know it won’t be a discounted equity raise at these valuations. Only option is a partial sale, debt or additional offtake agreements. Probably a combination of the 3. The CEO takes every opportunity to emphasise the significant valuation gap. Great risk reward play.

[jakecat1] 26/10/2018 08:05

Each buy should be a decent excuse to nudge up the share price on the back of that news, IMO.

[jakecat1] 25/10/2018 10:47

My favourite long term punt this one.

[nilla159] 16/10/2018 17:34

Thanks for that red rook, it is a pity they cannot communicate that secret information to the share owners i.e. Sold or Bought. Anyway thanks to your kind answer I have sold my shares at a small loss and swapped the proceeds into RedX.
regards Brian

[jotoha2] 16/10/2018 10:46

Until finance and it's terms is sorted , value here should be around fast depleting cash , so needs to settle at around 10/12 pence , if they leave it to late penny share status is on the horizon .

[spectoacc] 16/10/2018 09:54

@Pug - it may depend more on consumer co's assessment of likely market price (or rather, demand) over that period. Feels very much like they'll go for some sort of offtake financing a la SXX, over an equity raise, IMO.

The worst-case for me would be a very high interest bond or a very unfavourable (to current shareholders) convertible.

[pugugly] 16/10/2018 09:44

According to Canaccord this morning need an extra $220m (note USD NOT STERLING) for phase 1 but I have not double checked figures -

I still however consider a high cost producer -v- brine So success or failure will very much depend on Lithium demand in period 2021 - 2025 and the then market price-

[red rook] 16/10/2018 09:32

nilla159,

If you check BCN's Significant Shareholders List(>3%), recently updated on 1 October 2018, you will see that Cadence Minerals Plc had 9,960,000 shares, which represents a 7.4% holding.

Now they have 9,350,000 (6.95%), so have obviously sold some !

[nilla159] 16/10/2018 08:26

Please could anybody tell me if cadence minerals bought some shares or sold some shares.
How is it possible to issue an RNS to make it so incomprehensible to shareholders.
This is a perfect example of keeping us in the dark.
Perhaps these people could help in the Brexit negotiations and bring clarity to the table.

[spectoacc] 16/10/2018 06:48

Seems more likely they'll (have to) go for non-equity fundraising - question is whether they can get it, and on what terms. A lot of upside if things go right; 33p of downside if they don't ;)

[rimau1] 15/10/2018 22:04

They need $220m to complete funding for stage 1, not sure how you got £500m, or your 15p 50% discounted rights issue which would be corporate suicide and would never fly. They would delay into 2021 and let the stock price recover before that, remember they postponed a placing when this was around 60p due to reaction and lack of appetite

[jotoha2] 15/10/2018 17:52

Like your optimism here , but this company will need to sort out its funding requirement , they will need cash within 6 months , plus £500 million + to get the project moving , initial fund raising around 15p for starters.

[rimau1] 15/10/2018 08:23

I always like it when CEO’s reference the “huge” disconnect between market cap and value, I think this has fallen far enough and have taken a position. Funding issues are priced in and even if they put up the for sale sign the value will come out one way or the other. Like any small cap resource company, funding just needs a huge amount of patience and a small leap of faith.

[wrtmf] 11/10/2018 12:14

wtf happened here?
last time i looked in was the funding rns 5jul...

[spectoacc] 09/10/2018 08:53

3,926 posts on this thread and not a single one when BCN release an RNS. A good sign - in for a few.

Plenty of uncertainties around - Lithium price, demand, funding, extraction cost - but more of that is priced in than there used to be IMO.

[fqr714bhp] 08/10/2018 15:32

We will see who is right.

[pugugly] 08/10/2018 14:58

FQR714BHP: Way out of line (imo) might be lucky to get 90p - Have you read the link in 3918 above - they look to be a realitivly high cost producer.

[fqr714bhp] 08/10/2018 12:10

I have a feeling that there is an all out bid on the cards here before end 2018.

My guess is at @ £3 that would value BCN at @ £410 million. A fair price.

IMHO.

[ifthecapfits] 08/10/2018 10:56

Could be - it has fallen a long way. But if we get a funding RNS.........