SMM, July 6 / PRNewswire-FirstCall-Asianet / Sonora (Sonora) Lithium Project has gone one step further with Bakanola (Bacanora) Mining, which announced on Thursday that it had received $150 million in debt financing for the first phase of the Sonora Lithium Project in Mexico.
The Sonora lithium project is expected to begin production in 2020. The first phase will produce 17500 tons of lithium carbonate per year at a cost of about US $419.62 million, and the second phase will expand production to 35000 tons per year at a cost of about US $382.6 million.
The company has signed a senior debt financing deal with RK Mine Finance, and its chief executive, Peter Secker, said it compared with other debt schemes recently reported for new lithium projects in Canada and Australia. The company has agreed on a debt diversification plan.
The debt financing structure consists of two European bonds, mainly six-year bonds valued at $150 million, plus interest of 8 per cent on the three-month London Interbank offered rate (Libor). Interest will be capitalized every three months for the first 24 months and interest will be paid in cash every three months thereafter.
The second bond, valued at $56 million, has a maturity of 20 years and is repaid at $160 per tonne of lithium production in the light of the monthly production of lithium, with any remaining amount to be repaid at the end of the 20-year period.
Secker added that the competition clause further validates the quality of Sonora's battery class (more than 99.5 per cent lithium carbonate) and its potential to become a leading supplier of high-value lithium products to fast-growing industries such as electric vehicles and energy storage.
Bakanola is continuing discussions with its procurement partner, the Japanese trading company Hanwa, and other strategic investors to complete the proposed first phase of the development funding plan.
"We continue to engage in dialogue with other key players in the lithium battery field with a view to obtaining more high-quality strategic partners as we focus on entering the construction phase of what we consider to be the next important battery-grade lithium carbonate producer, "said Secker.