Ganfeng's offer to acquire Bacanora is approved by the government. Goulamina lithium mineral energy will increase to 4 million tons.

SMM survey: what kind of metal do you like most in 2022?

On the evening of December 24th, Ganfeng Lithium (002460) announced that the company recently received notification from Ganfeng International Trading (Shanghai) Co., Ltd. (hereinafter referred to as "Shanghai Ganfeng"), a wholly owned subsidiary of the company, that the Mexican government had approved the offer to acquire Bacanora. So far, more than 75% of Bacanora shareholders have accepted the tender offer, and the tender offer process will remain open to Bacanora shareholders who have not accepted it until further notice.

At the same time, according to relevant laws and regulations, Bacanora will apply to the London Stock Exchange for delisting, which is expected to take effect at 7:00 (London time) on January 26th, 2022.

The battery network learned that on May 6 this year, the board of directors of Ganfeng Lithium Industry examined and passed the "motion on the offer of Shanghai Ganfeng for Bacanora involving mining rights investment and related party transactions", agreeing to Shanghai Ganfeng to offer all the issued shares of Bacanora (except Shanghai Ganfeng already held shares) with its own funds, with a transaction value of no more than 190 million pounds.

At present, Shanghai Ganfeng holds 28.88% of Bacanora; upon completion of this transaction, Shanghai Ganfeng will hold 100% of Bacanora.

According to the previous announcement of Ganfeng Lithium Industry, Bacanora is a company founded and listed on the AIM sector of the London Stock Exchange in 2018, and its main assets are the lithium clay Sonora project in Mexico. Sonora project is 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 20000 tons.

It is worth noting that on December 1, Ganfeng Lithium also disclosed the progress of Ganfeng International's acquisition of a 50 per cent stake in the Netherlands' SPV company involving mining rights investment. The company has received notice from Ganfeng International that all the prerequisites set out in the transaction agreement have been met and that Ganfeng International has completed the payment of US $39 million for the first phase of the equity transaction. Ganfeng International will hold a 50 per cent stake in SPV of the Netherlands upon completion of the final transaction. After the establishment of the Dutch company SPV, the mining license for the Goulamina spodumene mine will be transferred to the Dutch company SPV, and the transfer is expected to be completed in early 2022.

At the same time, Ganfeng Lithium Industry recently received notification from Firefinch that Firefinch is working on updating the final feasibility study report (Updated Definitive Feasibility Study), and considering the expansion of the second phase of the Goulamina spodumene project. The project capacity will increase from 2.3 million tons per year to 4 million tons, an increase of 75%. The capacity of spodumene concentrate will also be increased from about 450000 tons per year, making the Goulamina spodumene project one of the largest spodumene producers in the world.

Battery net learned that, in addition to the above two lithium resource projects, Ganfeng Lithium Industry also has three projects with excellent resource endowment, namely, Australia's Marion, Pilgangoora spodumene and Argentina's Cauchari-Olaroz Salt Lake, as the cornerstone of the resource reserve.

At a time when the demand for new energy, especially lithium batteries, is soaring, the latest research report of Century Securities predicts that the total global demand for lithium resources will reach 1.45 million tons of LCE, in 2025 and the cumulative production capacity of the new or expanded resource-side projects with high probability is about 1.6 million tons of LCE, supply and demand is tight.

At the same time, Century Securities Analysis said that lithium demand is strong and supply is tight, lithium salt companies with sufficient resource-side production capacity should have a certain valuation premium. Ganfeng lithium industry upstream, middle and downstream integrated layout of sufficient resources, complete industrial chain, will fully enjoy the industry uplink dividend, product volume and price rise.