Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Lithium miner Bacanora prepares for substantial fundraise
Aspiring lithium producer Bacanora Minerals (BCN:AIM) is hoping to raise $450m which is more than two and a half times its current market valuation. The money will be used to build its Sonora lithium mine in Mexico.
Bacanora is currently valued at £125m ($174m). The mine will cost $419m to build, yet it is good practice for a miner to have a bit of extra cash in case of issues during construction.
Chief executive Peter Secker says $200m of the $450m target will come from debt financing. The remaining $250m will come from issuing new shares to investors in exchange for cash.
Secker is confident that half of the equity component will come from existing major shareholders including Igneous Capital, BlackRock, M&G and Japanese commodities trader Hanwa.
‘The rest of the money should come from investors in the US, London and the Far East,’ he says.
Chinese fund management group NextView was due to take a near-20% stake in the business in January in exchange for £31.1m cash. It also agreed to buy some production in the future. The financial transaction has yet to happen and Secker insists NextView’s involvement isn’t critical to Sonora’s near term development.
‘We were looking at them for stage two production; other parties have expressed an interest so we don’t see a problem if the NextView deal doesn’t happen,’ he adds.
Bacanora hopes to build Sonora’s plant by the end of 2019 and start testing equipment in early 2020 ahead of maiden production that year. (DC)