Baconora does not see SolarWorld insolvency impact on German lithium project

JOHANNESBURG (miningweekly.com) – Lithium exploration and development company Bacanora has expressed its confidence in the Zinnwald project, in Germany, after its 50% partner, SolarWorld AG, announced its intention to file for bankruptcy protection.

TSX-V and Aim-listed Bacanora in February signed an agreement with SolarWorld to acquire a 50% interest in the Zinnwald project for €5-million in cash and an undertaking to spend another €5-million towards the cost of competing a feasibility study.

The agreement also included an option for Bacanora to acquire the outstanding 50% held by SolarWorld within a 24-month period for €30-million.

“The company is confident that the SolarWorld insolvency process will have no material impact on the company's interest, nor its agreement with SolarWorld,” Bacanora said in a statement on Monday.

SolarWorld AG last week confirmed that it would file for bankruptcy protection in Germany, owing to ongoing pricing pressures in its core solar markets.

The Zinnwald project is located in a granite belt that has historically been mined for tin, tungsten and lithium in southern Saxony.

Bacanora expects its entry into Germany to provide the company with potential access to new markets, complementing the potential target markets for production from its Sonora project, in Mexico, where a feasibility study for a 35 000 t/y lithium carbonate operation is on track for completion this year.

Meanwhile, Bacanora also announced the appointment of Dr Andres Antonius, who is based in Mexico City, and Junichi Tomono, head of the speciality metals and alloys department of Japan-based global trading company Hanwa, as nonexecutive directors. The two appointments replace James Leahy, who has stepped down from the board to pursue other business interests, and Kiran Morzaria, who resigned from his position as nonexecutive director earlier this year.

Tomono's appointment to the board followed the signing of a strategic partnership and offtake agreement for the Sonora project, which has seen Hanwa acquire an initial 10% interest in Bacanora following a private placement.

Bacanora said Hanwa was facilitating discussions with regards to securing long-term project debt funding to contribute to the construction capital expenditure of the Sonora project.

The company also added that it planned to update the pricing assumptions in its feasibility study for Sonora, on the back of a stronger pricing environment for lithium carbonate. Recently, prices have strengthened to nearly $12 000/t from an average of about $6 000/t in 2015.