Bacanora Lithium plc (AIM: BCN), a lithium development company, announces the successful placing of new ordinary shares of £0.10 each in the share capital of the Company (the “New Ordinary Shares”) announced yesterday.

A total of 101,395,885 New Ordinary Shares in the Company (the “Placing Shares”) have been placed with institutional and professional investors by Citigroup Global Markets Limited (“Citi”), Canaccord Genuity Limited (“Canaccord”), WH Ireland Limited (“WHIreland”) (together, the “Bookrunners”), at a price of 45 pence per Placing Share (the “Placing Price”), representing gross proceeds of approximately US$62 million (the “Placing”).

The Placing Price represents a 19.6% discount to the mid-market closing price of 56 pence on 2 February 2021, being the last practicable closing price prior to the announcement of the Placing.

In conjunction with the Placing, retail and other investors have subscribed for 5,600,000 New Ordinary Shares in the capital of the Company (the “Retail Offer Shares”) pursuant to an offer made by the Company via the PrimaryBid platform (“Retail Offer”), raising additional gross proceeds of approximately US$3 million.

Together, the Placing and Retail Offer raised gross proceeds of approximately US$65 million through the issue of a total of 106,995,885 New Ordinary Shares. The Placing Shares and the Retail Offer Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares.

Following Admission, the total number of shares in issue in the Company will be 330,811,568. Application has been made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is currently expected that Admission will become effective, and that dealings in the New Ordinary Shares will commence on AIM, on or around 8.00 a.m. on 8 February 2021.

In addition to the Placing and Retail Offer, Ganfeng Lithium Co. Ltd. (“Ganfeng”) has stated its intention to potentially exercise its pre-emptive right at the Placing Price and to increase its holding in the Company to up to a maximum of 29.99% in line with its original shareholding in 2019. Completion of this investment from Ganfeng is conditional upon obtaining board approval and certain approvals and consents from authorities in the People’s Republic of China.

Peter Secker, CEO of Bacanora said:

“I am pleased to announce the results of this successful fundraising which will allow Bacanora to meet its capital commitments for the development of our flagship Sonora Lithium project in Mexico and commence our transition from exploration company to lithium producer by 2023. I am very grateful for the support shown by our existing shareholders and welcome all our new investors at this exciting new chapter. This is a major achievement for the Company, and I thank all parties involved including our joint venture partner Ganfeng, which has shown further support for Bacanora by proposing to exercise its pre-emption right beyond this fundraising to maintain its position as our largest shareholder.

“The fundraise is the final piece of the Company’s 50% share of the financing required to bring Stage 1 of Sonora into production. This successful fundraising will allow the Company to achieve its ambition of becoming an international lithium production company.

“Bacanora, as stated previously, represents one of London’s few listed pure-play lithium development companies and we, along with Ganfeng, are working tirelessly to unlock the substantial value for shareholders. The partnership remains committed to achieving battery-grade lithium production in 2023, ensuring this project’s importance to the future lithium supply chain and the economy of Mexico.”

Director participation

Eileen Carr, a director of the Company, has participated in the fundraise for a total of 88,889 New Ordinary Shares at the Placing Price. The participation by this director of the Company is considered to be a related party transaction under the AIM Rules. The Directors of the Company, excluding the participating director, having consulted with the Company’s nominated adviser, Cairn Financial Advisers LLP, consider that the terms of the participation are fair and reasonable insofar as the Company’s shareholders are concerned.

In the TV Clip below, CEO Peter Secker provides an overview of the Bacanora and their development plans for Sonora