Update - Bacanora Minerals

RNS Number : 5137Z

Cadence Minerals PLC

15 December 2017

 

Cadence Minerals Plc

("Cadence Minerals", "Cadence" or "the Company")

Bacanora Minerals Update - Strategic Cornerstone Investor & Offtake Agreement

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that Bacanora Minerals Ltd ('Bacanora', AIM: BCN, TSXV: BCN) has today announced that NextView Capital ('NextView'), a leading Chinese institutional fund management group focused on new technologies and energy, has agreed to acquire a 19.89% equity interest (non-diluted) in Bacanora via the placement of 32,976,635 common shares in the Company at a price of 94.53 pence (approximately C$1.6223) per share.  The £31,172,813 (approximately C$53,498,000) capital raised by the Placing will be used for the continued development of Bacanora's Sonora Lithium Project. 

In addition, Bacanora has agreed to supply NextView with 5,000tpa of lithium carbonate produced at its Sonora Project in Mexico ('Sonora' or 'the Project') on a best endeavours basis at market prices from its Stage 1 of production, with a firm commitment to supply 8,000tpa of lithium carbonate during Stage 2 and a best endeavours promise to supply a further 7,000tpa during Stage 2.  NextView has also agreed to employ its reasonable endeavours to assist Bacanora in procuring project debt financing for Sonora.

Bacanora has also reported that, In view of the size of the opportunity provided by the Chinese and Japanese markets for lithium, Bacanora intends to commence a review of the parameters of its planned two-stage operation at Sonora with a view to increasing Stage 1 from 17,500tpa.

Highlights:

·     New Institutional Investor agrees to acquire 19.89% interest in Bacanora

·     Follows highly favourable Feasibility Study which estimated an NPV8 of US$1.253 Billion

·     Provides entry into key Chinese market

Bacanora is a lithium exploration and development company. On completion of the placing Cadence will have approximately 7% of Bacanora's equity and a 30% stake in the Mexalit S.A. de CV ("Mexalit") joint venture which forms part of the Sonora Lithium Project in Northern Mexico.

The full Bacanora announcement can be found at: http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/13466569.html

Kiran Morzaria, Chief Executive Officer of Cadence, commented:

"The announcement of the positive feasibility study and the addition of a cornerstone investor in one week show excellent progress is being made in the development of the Sonora lithium project. Critically via the offtake agreement associated with this investment, Sonora lithium carbonate product will gain a foothold into the Chinese market, which represents one of the largest growth areas for the electric vehicles and associated demand for battery grade lithium carbonate."

"We look forward to hearing further updates from Bacanora as they progress the development of the project in the coming year. In particular, we look forward to the results of the review in which Bacanora plan to increase the production in stage 1"

The Sonora Lithium Project and Details of Cadence's ownership:

On completion of the placing by Bacanora Cadence Minerals will hold approximately 7% of the equity in Bacanora Minerals and 30% of Mexalit and Megalit joint venture companies. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions. These concessions form part of the Sonora Lithium Project as assessed in the FS published a Summary of which has been published today by Bacanora.

Megalit does not form part of the Sonora Lithium Project and does not form part of the FS released by Bacanora.

The direct and indirect interests of Cadence in the Sonora Lithium Project and other mineral concessions in the Sonora province are as follows:

 - La Ventana and La Ventana 1, which are 100 percent owned by Minera Sonora Borax S.A. de C.V.("MSB"), a wholly-owned subsidiary of Bacanora; Cadence, through its direct interest of approximately 7% of Bacanora, has an indirect interest in these concessions of approximately 7%.

 - El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions, which are held by Mexilit S.A. de C.V. ("Mexilit"). Cadence has a 30% direct interest in Mexalit through its Joint Venture with Bacanora, and when combined with Cadence's direct interest of approximately 7% in Bacanora, has a total economic interest in Mexalit of approximately 35%.

- Buenavista, San Gabriel and Megalit concessions, which are held by Megalit S.A. de C.V. ("Meglait"). Cadence has a 30% direct interest in Megalit through its Joint Venture with Bacanora, and when combined with Cadence's direct interest of approximately 7% in Bacanora, has a total economic interest in Megalit of approximately 3%.

-Ends -

For further information, please contact.
Cadence Minerals plc	[phone]
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)	[phone]
James Joyce
James Sinclair-Ford
Hannam & Partners LLP (Joint Broker)	[phone]
Neil Passmore
Giles Fitzpatrick
Square1 Consulting	[phone]
David Bick

About Cadence Minerals:

Cadence is dedicated to smart investments for a greener world. The planet needs rechargeable batteries on a global scale - upcoming supersized passenger vehicles, lorries and buses - require lithium and other technology minerals to power their cells. Cadence is helping find these minerals in new places and extracting them in new ways, which will meet the demand of this burgeoning market. With over £25 million vested in key assets globally, Cadence is helping us reach tomorrow, today.

Cadence invests across the globe, principally in lithium mining projects. Its primary strategy is taking significant economic stakes in upstream exploration and development assets within strategic metals. We identify assets that have strategic cost advantages that are not replicable, with the aim of achieving lower quartile production costs. The combination of this approach and seeking value opportunities allows us to identify projects capable of achieving high rates of return.

The Cadence board has a blend of mining, commodity investing, fund management and deal structuring knowledge and experience, that is supported by access to key marketing, political and industry contacts. These resources are leveraged not only in our investment decisions but also in continuing support of our investments, whether it be increasing market awareness of an asset, or advising on product mix or path to production. Cadence Mineral's goal is to assist management to rapidly develop the project up the value curve and deliver excellent returns on its investments.

 

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