Bacanora Lithium’s independent directors plan to recommend the offer to shareholders
Ganfeng Lithium has offered to take full ownership of UK-based Bacanora Lithium by acquiring the remaining 71.12% stake in the latter for up to £190m.
The Chinese miner, through its subsidiary Ganfeng International Trading (Shanghai), has offered to purchase each of the remaining shares at 67.5p through a scheme of arrangement.
Ganfeng Lithium is already a cornerstone investor and offtake partner of the UK firm.
According to Bacanora Lithium’s independent directors, the offer from the Chinese company is attractive. The directors plan to recommend the offer after it becomes a formal proposal, which would then need approval from the Chinese authorities.
In February 2021, Ganfeng Lithium signed a deal to increase its stake in Bacanora Lithium to 28.88% from 17.41%. At that time, the Chinese miner had signed a new joint venture (JV) agreement with the latter for the Sonora Lithium Project in Mexico.
Under the JV agreement, Ganfeng Lithium will get a stake of 50% in Sonora Lithium (SLL), the holding company of the Mexican lithium project.
Bacanora Lithium is focusing on developing the Sonora Lithium Project as a 35,000 tonne per annum open pit battery grade lithium operation. The project is slated to begin production in 2023.
The Sonora Lithium Project will be operated by Bacanora Lithium, while Ganfeng Lithium is responsible for the engineering, procurement, and construction (EPC) activities.
As per a feasibility study in December 2017, the Sonora Lithium Project has 8.8 million tonnes of lithium carbonate (Li2CO3) equivalent resources, with a resource life of nearly 250 years.
Apart from the Mexican asset, the UK firm has 44.3% investment in Zinnwald Lithium, which in turn has a 50% stake in the Zinnwald Lithium Project in Germany.