In two years' time, Bacanora Minerals (BCN) expects to be producing material from its proposed lithium carbonate mine in Sonora, Mexico. On current projections, this is likely to require a total capital outlay of at least $400m (£325m), although the market is unlikely to know for certain until the Aim-traded miner gets its ongoing feasibility study done and dusted.
That is now expected by late summer, and should provide a roadmap for an operation that could produce 35,000 tonnes of lithium carbonate each year by 2021. Before then, Bacanora has pledged to publish an updated resource and reserves estimate in the next few weeks; a move that could strengthen the group's hand in negotiations with offtake partners. Those discussions, which partly explain the C$0.7m (£0.4m) jump in legal and accounting fees in the period, are currently being supported by battery-grade sample production from a pilot plant.
With C$24m on the balance sheet, Bacanora has ample funding to keep the pilot plant running, complete the feasibility study and even begin work appraising the jointly-operated Zinnwald deposit acquired after the period-end. The latter feasibility study will take up to two years to complete, at a cost of approximately €5m (£4.3m).
Analysts at Canaccord Genuity are forecasting an underlying pre-tax loss of $8m and a loss per share of 7¢ in the 12 months to June.
BACANORA MINERALS (BCN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 83.5p | MARKET VALUE: | £92.7m | |
| TOUCH: | 83-84p | 12-MONTH HIGH: | 102p | LOW: 62p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 45¢ | NET CASH: | C$23.8m | |
| Half-year to 31 Dec | Turnover (C$000) | Pre-tax profit (C$m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 44.6 | -4.0 | -4.0 | nil |
| 2016 | 62.2 | -4.8 | -5.0 | nil |
| % change | +39 | - | - | - |
£1=C$1.64 | ||||
