190 million pounds! Ganfeng Lithium Industry Co., Ltd. plans to acquire Sonora project, one of the largest lithium resource projects in the world.

On May 6th, Ganfeng Lithium Industry (01772.HK) announced that the 25th meeting of the Fifth Board of Directors of Jiangxi Ganfeng Lithium Co., Ltd. (hereinafter referred to as "the Company"), held on May 6th, 2021, examined and passed the "proposal on the proposal of Shanghai Ganfeng, a wholly-owned subsidiary, to acquire Bacanora Company involving mining right investment and related party transactions". It is agreed that Ganfeng International Trading (Shanghai) Co., Ltd. (hereinafter referred to as "Shanghai Ganfeng"), a wholly-owned subsidiary of the Company, shall offer all issued shares of Bacanora (except Shanghai Ganfeng shares) with its own funds, with a transaction amount not exceeding 190 million pounds.

Prior to the completion of the deal, Shanghai Ganfeng held a 17.41 per cent stake in Bacanora, while the settlement process for Shanghai Ganfeng to increase its Bacanora stake to 28.88 per cent was still in progress; upon completion of the deal, Shanghai Ganfeng will hold 100 per cent of Bacanora. The management of the company is authorized to handle all matters related to this transaction.

Bacanora is a company that was founded in 2018 and listed on the AIM section of the London Stock Exchange. The London Stock Exchange is registered under the symbol BCN; and the registered address is 4MoreLondonRiverside. the company is mainly engaged in group holding and lithium clay resource project management. Its main asset is the Lithium Clay Sonora project in Mexico; as of the date of disclosure of this announcement, the issued share capital of Bacanora is 330811568 shares, with Shanghai Ganfeng as the largest shareholder and holding a stake in Bacanora17.41%.

Shanghai Ganfeng and Bacanora each own 50 per cent of the Sonora project. The Sonora project is a lithium clay lithium extraction project located in Mexico and is currently one of the largest lithium resource projects in the world.

According to the feasibility study report of the Sonora project, the total lithium resource of the project is about 8.82 million tons of lithium carbonate equivalent. Thanks to the unique advantages of lithium clay resources, the lithium extraction process of the project is characterized by the advantages of both ore and salt lake lithium extraction, which can complete the lithium extraction process in a short time at a speed similar to that of ore extraction. Lithium extraction can also be completed at a lower cost at a cost similar to that of brine. As of the date of disclosure of this announcement, the project has not yet been put into production, and the annualized lithium hydroxide production capacity of the first phase of the project is expected to be 20,000 tons.