Sonora Lithium

Bacanora owns ten mining concession areas covering approximately 100,000 hectares in the northeast of Sonora State in Mexico. Seven of these ten mining concessions (the 'Sonora Lithium Project') were included in the Sonora Feasibility Study published in January 2018.  The Sonora Lithium Project has a Measured plus Indicated Mineral Resource estimate of over 5 Mt (comprising 1.9Mt of Measured Resources and 3.1Mt of Indicated Resources) of LCE and an additional Inferred Mineral Resource of 3.7 Mt of LCE.  The Sonora Feasibility Study has established Proven Mineral Reserves (in accordance with NI 43-101) of 1.67 Mt and Probable Mineral Reserves of 2.85 Mt LCE and confirmed the economics associated with becoming a 35,000 tpa lithium carbonate and 30,000 tpa SOP producer in Mexico. 

Sonora Lithium ltd (“SLL”) is the operational holding company for the Sonora Lithium Project and owns 100% of the La Ventana concession. The La Ventana concession accounts for 88% of the mined ore feed in the Sonora Feasibility Study which covers the initial 19 years of the project mine life.  SLL is owned 77.5% by Bacanora and 22.5% by Ganfeng Lithium Ltd. SLL also owns 70% of the El Sauz and Fleur concessions, which are held by Mexilit S.A. de C.V. ('Mexilit’).  

Sonora Mineral Resources and Reserves Estimates

Sonora holds one of the world’s larger lithium resources and benefits from being both high grade and scalable. The polylithionite mineralisation is hosted within shallow dipping sequences, outcropping on surface.  A Mineral Resource estimate was prepared by SRK Consulting (UK) Limited (‘SRK’) in accordance with NI 43-101. The following tables present the summary of current lithium resources for the Project, these Mineral Resources are inclusive of Mineral Reserves:

Table 2: Measured and Indicated Mineral Resources

Category

Cut–off
(Li ppm)

Tonnes (000t)

Li (ppm)

K (%)

LCE (000t)

LCE attributable to Bacanora (000t)

Measured

1,000

103,000

3,480

1.5

1,910

1,776

Indicated

1,000

188,000

3,120

1.3

3,130

2,345

Total

1,000

291,000

3,250

1.4

5,038

4,119


Table 3: Inferred Mineral Resources

Category

Cut–off
 (Li ppm)

Tonnes (000t)

Li (ppm)

K (%)

LCE (000t)

LCE attributable to Bacanora (000t)

Inferred

1,000

268,000

2,650

1.2

3,779

3,220

Table 4: Mineral Reserves: (Cut-off grade of 1,500 ppm Li)

Category

Tonnes Ore (000t)

Li (ppm)

K (%)

LCE (000t)

LCE attributable to Bacanora (000t)

Proven

80,146

3,905

1.64

1,666

1,550 

Probable

163,662

3,271

1.36

2,849

2,126

Total

243,808

3,480

1.45

4,515

3,676

Feasibility Study Key Indicators

Value

Pre-tax Net Present Value ($ 000)

1,253,027

Pre-tax IRR (%)

26.1%

Simple Payback Stage 1 (years)

4

Initial Construction Capital Cost Stage 1 ($ 000)

419,616

Construction Capital Cost Stage 2 ($ 000)

380,262

Av. LOM operating costs ($/t Li2CO3)

3,910

Av. operating costs ($/t Li2CO3 net of K2SO4 credits)

3,418

Post-tax NPV (at 8% discount) ($ 000)

802,464

Post-tax IRR (%)

21.2%

Av. annual EBITDA with co-products ($ 000)

229,362

Annual Li2CO3 production capacity Stage 1

17,500 t

Annual Li2CO3 production capacity Stage 2

35,000 t

Annual K2SO4 production capacity Stage 2

30,000 t


Sonora Mining Operations
as defined in the Sonora Feasibility Study

The mining operation for the Sonora Project is planned as an open-pit development using a combination of continuous miners to mine the ore zones and a truck/shovel fleet to remove the waste material.  Mining operations will be augmented with an ancillary fleet of dozers, graders and water trucks.  The Mineral Reserve estimate was prepared by Independent Mining Consultants Inc. (‘IMC’) in Tucson, Arizona.  The Mineral Reserve estimate includes an ore recovery factor of 100% and mining dilution of 100 mm at the top and bottom of the mineralized beds, with the grades of the elements in the adjacent lithologies.

Sonora Processing as defined in the Sonora Feasibility Study

The process plant design comprises a pre-concentration stage to produce an initial concentrate prior to roasting. The concentrate is subsequently heated in a kiln, at approximately 950 degrees Celsius, in combination with re-cycled sodium sulphate (‘Na2SO4’), which is a by-product produced from the Sonora lithium plant, to produce an intermediate lithium sulphate (‘Li2SO4’) product. This sulphate material then undergoes hydrometallurgical treatment, filtration, cleaning, precipitation and packaging, to produce a >99.5% Li2CO3 final battery grade product.  The integrated plant has been designed to initially process 1.1 Mt of ore per year, during Stage 1 of the Sonora Project, subsequently increasing to some 2.2 Mt per year at Stage 2, producing 17,500 tpa and 35,000 tpa of lithium carbonate, respectively.

The plant design also includes a circuit to produce up to 30,000 tpa of K2SO4/SOP product through a series of evaporation and precipitation stages.  

Metallurgical testwork for the Sonora Feasibility Study was carried out at SGS Laboratories (‘SGS’) in Perth, WA, and ANSTO Laboratories (‘ANSTO’) in Sydney, NSW, Australia. The process engineering and design for the process plants and infrastructure was completed by Ausenco Pty Ltd (‘Ausenco’). 

Following the results of the Feasibility Study, management is focused on advancing Sonora towards production to satisfy expected continuing growth in demand for lithium driven by growing sectors such as electric vehicles and energy storage.

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Map

Sonora Map 290415 1