CALGARY, ALBERTA--(Marketwired - May 22, 2013) - BACANORA MINERALS LTD. ("Bacanora" or the "Company") (TSX VENTURE:BCN) is pleased to announce that it has executed formal agreements with Rare Earth Minerals Plc ("REM"), a London Stock Exchange listed company (REM.L), pursuant to which it has granted REM certain rights to participate in drilling and project evaluation of the El Sauz and Fleur Lithium concessions (the "Concessions" or individually, a "Concession") in northern Mexico per the Company's February 14, 2013 news release. The Concessions are adjacent to and along strike from the Company's La Ventana Concession.
Highlights of the Agreement:
- REM will earn an initial 10% interest in Bacanora's 100% owned subsidiary that will hold the Concessions by making an upfront cash payment of $250,000 (which has been received by Bacanora) and providing another $500,000 to the Company in two instalments, to be used for exploration and drilling on the Concessions and delivered in full no later than 4 weeks after drilling starts.
- Following completion of the above, REM shall have an option to increase its interest in the Company's subsidiary to 30% by providing written notice of exercise, together with delivery of an additional cash payment of $500,000, on or before August 11, 2013, and thereafter depositing a further $1,000,000 within 6 months of exercise of this option, which funds shall be used for drilling and exploration expenditures on the Concessions.
- Following completion of the prior two stages, REM will thereafter have an exclusive option to negotiate terms to increase interest in the subsidiary holding the Concessions from 30% to a maximum of 49.9%.
Bacanora is also pleased to announce that a diamond drill under contract from Godbe Drilling of Colorado, USA has arrived on the Concessions. The drill is set up and has commenced drilling the first of 10 holes on the Concessions.
The initial diamond drilling will consist of approximately 2,500 metres of NQ core in 10 holes, which will have the following objectives:
- Test the thickness and extent of the clay units exposed on El Sauz Concession;
- Provide an initial estimate of the lithium content of these units at depth;
- Determine if the clay units on El Sauz continue to the north and onto the Fleur Concession; and
- Determine if the clay units on the Concessions are the same units as those exposed on the adjoining La Ventana concession.
The drilling programme is estimated to take approximately 80 days, with final results of drill core analyses expected in roughly late August.
In conjunction with the drilling, mapping and rock sampling will resume on the Fleur Concession in order to provide the Company with a full assessment of the lithium potential of this Concession. Previous surface rock sampling, as announced April 10, 2013, demonstrated that exposures with lithium values range from 10 to 7,220 ppm Li (3.84% LCE*), with 10 samples greater than 2,168 ppm (0.95 percentile). The samples also have values in potassium which range from 0.04% to 3.07%, as well as other alkali metals. Results of geological mapping have delineated exposures of the sedimentary-volcanic succession that hosts the lithium-bearing clay units cover an area of 80 hectares in an arcuate belt approximately 2 km long in a northwesterly direction and 1 km in width. Sediments on the southwest side of the arc dip gently to the southwest, whereas those on the northeast dip to the northeast.
About the Sonora Lithium Project:
The Company's interests in El Sauz and Fleur Concessions cover 3,411 hectares out of a total of 5,786 contiguous hectares that make up the Sonora Lithium Project (the "Project") owned by Bacanora.
Initial rock sampling and mapping of the Project by Bacanora located the lithium-bearing clay units within a sedimentary-volcanic sequence. Drilling by Bacanora in 2010 and 2011 located two lithium-bearing clay units (upper and lower) that average 41 and 22 m in thickness, respectively, and that are separated by an ignimbrite unit varying from 1 to 45 m in thickness. The sedimentary-volcanic sequence dips at approximately 20° to the east and crops out along 3.5 km of strike length. The exposures are in erosional windows looking through overlying basalt that covers much of the area. The lithium-bearing clay minerals have been identified as hectorite and polylithionite.
Within the Project area on the La Ventana concession that is 100% owned by Bacanora and adjoins the ground under option to REM, National Instrument 43-101 ("NI 43-101") compliant inferred resources have been estimated for two clay units (referred to as the "La Ventana Lithium Deposit"). The inferred resources for the two clay units total 60 million tonnes averaging 3,000 ppm Li (equivalent to 1.6% lithium carbonate assuming 100% recovery and no process losses). Bacanora has used the inferred resources on the La Ventana Lithium Deposit for a Preliminary Economic Assessment ("PEA") of the concession (refer to Bacanora news release dated January 25, 2013). Highlights of the PEA for a potential lithium mining and production operation with an output of 35,000 tonnes battery grade lithium carbonate per annum over a 20 year open pit mine life suggest annual revenue of $US210 million for an Internal Rate of Return of 138%, with a 1.9 year pay back. Capital costs are estimated at $US114 million and average operating costs at $US1,958/tonne. Net present value of the Project, discounted at 8%, is $US848 million, assuming an average lithium carbonate price of $US6,000/tonne.
Management is very pleased with the results to date which merit advancing the El Sauz project to the first drill testing of lithium bearing clay units on this property. Should the outcropping lithium clays on El Sauz be found to correlate with those on the Company's La Ventana Lithium Deposit, then a reasonable inference will be capable of being made based on available geological evidence that the sedimentary basin that hosts the lithium-rich clays extends, in a northwesterly direction, for at least 7 kilometres.
Lithium is the lightest of the alkali metals and has unique electrochemical properties that make it the element of choice for batteries of high energy storage capacity and other energy applications as well as a host of other industrial and health applications.
|*||LCE = lithium carbonate (Li2CO3) Equivalent: determined by multiplying Li value in percent by 5.324 to get an equivalent Li2CO3 value in percent. Use of LCE assumes 100% recovery and no process losses in conversion of Li to Li2CO3.|
Carl G. Verley, P.Geo. is the Qualified Person pursuant to NI 43-101 and has reviewed of the technical contents of this news release.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful.
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to, the estimated future value of the La Ventana Lithium Deposit. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: commodity price volatility; general economic conditions in Canada, the United States, Mexico and globally; industry conditions, governmental regulation, including environmental regulation; unanticipated operating events or performance; failure to obtain industry partner and other third party consents and approvals, if and when required; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; competition for, among other things, capital, skilled personnel and supplies; changes in tax laws; and the other risk factors disclosed under our profile on SEDAR at www.sedar.com and within the body of the PEA. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.