Interim Results

1 March 2016

Bacanora Minerals Ltd

("Bacanora" or the "Company")

Interim Results for the six months ended 31 December 2015

Bacanora, the London and Canadian listed (AIM: BCN and TSX-V: BCN) lithium company which is developing the Sonora Lithium Project in northern Mexico, is pleased to provide its unaudited condensed consolidated interim results for the 6 month period ended 31 December 2015.

Highlights

· Excellent progress made with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") standard Pre-Feasibility Study ("PFS") focused on designing a plant potentially capable of delivering up to 35,000 tonnes per annum of lithium carbonate at Sonora Lithium Project - on course to be completed in the near term

· 337% increase in the Indicated portion of the Mineral Resource Estimate ('MRE') at Sonora to 5.0 million tonnes ("Mt") lithium carbonate equivalent ("LCE")1 contained in 364 Mt of clay, at a Li grade of 2,600 ppm compared to previous Indicated resource of 1.14 Mt LCE contained in 95 Mt of clay, at a Li grade of 2,200 ppm

o Major positive implications for mine planning and life of mine

o MRE prepared in accordance with NI 43-101

· Latest MRE upgrade follows a 19 hole infill drilling programme (approximately 4,000 metres) which was completed during the period and forms part of the ongoing PFS

· First long-term lithium hydroxide supply agreement signed - negotiations with a number of additional potential partners are ongoing

· Lithium market dynamic remains highly positive - demand is expected to continue to grow rapidly thanks to lithium's key role in highly innovative industries such as smartphones, electric vehicles and energy storage

· Completion of a private placement financing of approximately CAD$17.8 million (£8.8 million) via the placing of 11,476,944 new common shares at a price of CAD$1.56 (77.0 pence) per share to fund lithium engineering designs, pilot plant upgrade, definitive feasibility study ("DFS") (assuming successful completion of the PFS), project work and metallurgical testwork during 2016

o First major institutional shareholder secured through the financing

1 LCE = lithium carbonate (Li2CO3) equivalent; determined by multiplying Li value in percent by 5.324 to get an equivalent Li2CO3 value in per cent. Use of LCE is to provide data comparable with industry reports and assumes complete conversion of lithium in clays with no recovery or process losses.

Peter Secker, CEO of Bacanora, said, "With Indicated lithium resources of 5.0 Mt LCE contained in 364 Mt of clay, at a Li grade of 2,600 ppm, Sonora is one of the world's larger lithium deposits. During the period under review we commenced a PFS to establish the commerciality of a plant at Sonora with the potential to deliver up to 35,000 tonnes per annum of lithium carbonate, in a two phase process. We are highly encouraged by the progress made to date and we expect to be in a position to announce the results of the PFS in Q1, 2016.

"Subject to the results of the PFS, we will look to immediately embark on a Definitive Feasibility Study. Thanks to the successful private placement during the period, which brought our first top tier institutional investor onto our shareholder register, not only is the DFS fully funded, but we are also able to expand and upgrade the Company's lithium pilot plant in Hermosillo, Mexico. This will allow us to produce battery grade lithium carbonate marketing samples for distribution to potential off-take partners in Europe and Asia later this year. 2016 is shaping up to be a pivotal year in the transformation of Bacanora into a supplier to the rapidly growing lithium market and I look forward to providing further updates on our progress."

Chairman's Statement

Bacanora is focused on building the Sonora Lithium Project in Mexico into a lithium mine. With this in mind, the period under review has been characterised by PFS activities, which on completion, and subject to successful findings, will both significantly de-risk and strengthen Bacanora's position within an industry that is expected to grow substantially in the next five years. The PFS is due for completion shortly, at which point we intend to commence work on the DFS. Importantly, Bacanora is already fully funded to complete this next development milestone following the successful placing to raise £8.8 million in November 2015. The quality and scale of our project is beginning to be recognised by institutions, and we were pleased to welcome our first major institutional investor to our register during this placing.

Due to its light-weight nature, and effectiveness in energy storage, lithium is an essential element in the manufacture of smart phones and tablets, electric cars and smart grids. Given that these are emerging and growing technologies, the future looks positive for lithium. It is this exciting environment that makes the Sonora Lithium Project so relevant to the global lithium industry and the electronics sector.

With this potential growth in mind, the requirement to bring large and high grade lithium projects into production is compelling. The PFS has been examining the commerciality of developing an open-pit mine and lithium carbonate processing facility over two phases to fit with the demand requirements for lithium. With this in mind we plan to initially produce 17,500 tonnes per year of battery-grade lithium carbonate ("Li2CO3") and then ramp this up to 35,000 tonnes Li2CO3 per year over time. In tandem with the PFS, we continue to define the Sonora Lithium Project's resource and recently completed the upgrade of the Mineral Resource Estimate for the deposit, which is a key component of the PFS. This resource upgrade followed a 16-hole drilling campaign and assay result analysis and confirmed the Sonora Lithium Project as a major lithium deposit. Having set out to significantly increase the Indicated portion of the Project's Mineral Resource, we were delighted to see the Indicated MRE at Sonora increased by 337% to 5.0 Mt of LCE, 364 Mt of clay at a Li grade of 2,600 ppm, up from the previously reported 1.14 Mt, 95 Mt of clay at a Li grade of 2,200 ppm. The Inferred Mineral Resource estimate is 3.9 Mt of LCE compared to the previously reported 6.3 Mt of LCE.

As referred to above, in November 2015 the Company raised £8.8 million (US$13.7 million / CAD $17.8 million) via the placing of 11,476,944 new common shares (at a price of 77 pence per share (the "Placing"). Through the Placing, Bacanora secured its first major institutional shareholder as well as receiving support from pre-existing shareholders. Rare Earth Minerals Plc ("REM"), one of the Company's largest existing shareholders, reaffirmed its support to maintain its 17 per cent. interest in the Company.

Funds from the Placing are being used to expand and upgrade the Company's lithium pilot plant, located in Hermosillo, Mexico. The expanded plant will be used to produce battery grade lithium carbonate marketing samples for distribution to potential off-take partners in Europe and Asia in Q2 and Q3, 2016. Our well-connected management team has already completed a number of detailed site and plant visits with potential off-take partners to facilitate and expedite lithium sample optimisation. Negotiations in respect to offtake agreements with these potential partners are ongoing and will continue in tandem with our DFS.

Ensuring that we have the strongest and most experienced management team in place has been intrinsic to our development process and the appointment of Mark Hohnen as a consultant to the Company was another key step in moving forward as a successful company. Mark played an important role in the completed fundraising and we believe that with his breadth of international experience in the mineral resources sector and knowledge of the Japanese, Chinese and Korean markets, he will be pivotal in the development of our shareholder register going forward.

Bacanora has a large, scalable resource located in a supportive political jurisdiction. Its development is being overseen by experienced lithium professionals and engineering organisations. Off-take discussions will be a high priority and we will progress these in tandem with the DFS. We are targeting production in 2018, although of course there are a range of milestones to complete ahead of this. However we are hopeful that, given the support for our project from key players in the industry, the government and our shareholders, we will meet this deadline in a timely manner. I would like to take this opportunity to thank our shareholders for their continued support and now look forward to reporting on the results of the PFS in the near-term, which will bring us into the next stage of development as we continue to build a global presence in the growing lithium supply market.

Condensed Consolidated Interim Financial Statements

December 31, 2015

See accompanying notes to the consolidated financial statements.

See accompanying notes to the consolidated financial statements.

Consolidated Statements of Changes in Shareholders' Equity (Unaudited)

Expressed in Canadian Dollars

See accompanying notes to the consolidated financial statements.

1. CORPORATE INFORMATION

Bacanora Minerals Ltd. (the "Company" or "Bacanora") was incorporated under the Business Corporations Act of Alberta on September 29, 2008. The Company is dually listed on the TSX Venture Exchange as a Tier 2 issuer and on the AIM Market of the London Stock Exchange, with its common shares trading under the symbol, "BCN" on both exchanges. The address of the Company is 2204, 6th Avenue N.W. Calgary, AB T2P 3S2.

The Company is a development stage mining company engaged in the identification, acquisition, exploration and development of mineral properties located in Mexico. The Company has not yet determined whether its mineral properties contain economically recoverable reserves. The recoverability of amounts capitalized is dependent upon the discovery of economically recoverable reserves, securing and maintaining title in the properties and obtaining the necessary financing to complete the exploration and development of these projects and upon attainment of future profitable production. The amounts capitalized as mineral properties represent costs incurred to date, and do not necessarily represent present or future values.

The Company has generated accumulated losses of $6,567,446 and the shareholders' equity of two of the Company's subsidiaries incorporated in Mexico have decreased to an amount less than one third of their share capital which, according to Mexican laws, may be a cause for dissolving a company at the request of any interested third party. If the Company is not able to generate income producing transactions through the identification and exploitation of ores, and continue to raise sufficient capital to continue exploration activities, there is a risk that the rights to the mining concessions could be challenged.

2. BASIS OF PREPARATION

a) Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements for the year ended June 30, 2015, which have been prepared in accordance with IFRS as issued by the IASB.

The Company uses the same accounting policies and methods of computation as in the annual consolidated financial statements for the year ended June 30, 2015.

These condensed consolidated interim financial statements were authorized for issue by the Board of Directors on February 29, 2016.

b) Basis of measurement

These consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments that have been measured at fair value. 

These consolidated financial statements are presented in Canadian dollars. The functional currency of the Company is Canadian dollars and for its subsidiaries is the US dollar.

c) New standards and interpretations not yet adopted

A number of new IFRS standards, and amendments to standards and interpretations, are not yet effective for the period ended December 31, 2015, and have not been applied in preparing these condensed consolidated interim financial statements. None of these standards are expected to have a significant effect on the condensed consolidated interim financial statements of the Company.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of the Company's financial statements in accordance with IFRS requires management to make certain judgments, estimates, and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results are likely to differ from these estimates. Information about the significant judgments, estimates, and assumptions that have the most significant effect on the recognition and measurement of assets, liabilities, income and expenses are discussed below.

a) Exploration and evaluation assets

The Company is in the process of exploring its mineral properties and has not yet determined whether the properties contain economically recoverable mineral reserves. The recoverability of carrying values for mineral properties is dependent upon the discovery of economically recoverable mineral reserves, the ability of the Company to obtain the financing necessary to complete exploration and development, and the success of future operations.

The application of the Company's accounting policy for exploration and evaluation assets requires judgment in determining whether it is likely that costs incurred will be recovered through successful exploration and development or sale of the asset under review when assessing impairment. Furthermore, the assessment as to whether economically recoverable reserves exist is itself an estimation process. Estimates and assumptions made may change if new information becomes available. If, after expenditures are capitalized, information becomes available suggesting that the recovery of expenditures is unlikely, the amount capitalized is written off in the statement of comprehensive loss in the period when the new information becomes available. The carrying value of these assets is detailed in Note 8.

b) Title to mineral property interests

Although the Company has taken steps to verify the title to the exploration and evaluation assets in which it has an interest, in accordance with industry practices for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Title may be subject to unregistered prior agreements or transfers and title may be affected by undetected defects.

c) Rehabilitation provision

Rehabilitation or similar liabilities are estimated based on the Company's interpretation of current regulatory requirements, constructive obligations and are measured at fair value. Fair value is determined based on the net present value of estimated future cash expenditures for the settlement of decommissioning, restoration or similar liabilities that may occur upon decommissioning of the mine. Such estimates are subject to change based on changes in laws and regulations.

d) Contingencies

Contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events.

e) Share-based payments

The Company utilizes the Black-Scholes Option Pricing Model to estimate the fair value of stock options granted to directors, officers and employees. The use of the Black-Scholes Option Pricing Model requires management to make various estimates and assumptions that impact the value assigned to the stock options including the forecast future volatility of the stock price, the risk-free interest rate, dividend yield and the expected life of the stock options. Any changes in these assumptions could have a material impact on the share-based payment calculation value.

The same estimates are required for transactions with non-employees where the fair value of the goods or services received cannot be reliably determined.

f) Income taxes

The Company is subject to income tax in several jurisdictions and significant judgment is required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. In the prior year these transactions included the transfer of properties between Mexican subsidiaries. Transactions between the Company's Mexican subsidiaries are required by Mexican tax rules to be recorded on an arms' length basis and the Company made estimates as to the measurement of these transactions. The Company recognizes liabilities and contingencies for anticipated tax audit issues based on the Company's current understanding of the tax law. Despite the Company's belief that its tax return positions are supportable, the Company acknowledges that certain positions may potentially be challenged and may not be fully sustained upon review by tax authorities. The Company believes that its accruals for tax liabilities are adequate for all open audit years based on its assessment of many factors including past experience and interpretation of tax law. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events. For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities, and such differences will impact income tax expense in the period in which such determination is made.

In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses can be utilized.

4. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

This note presents information about the Company's exposure to credit, liquidity and market risks arising from its use of financial instruments and the Company's objectives, policies and processes for measuring and managing such risks.

a) Credit risk

Credit risk arises from the potential that a counter party will fail to perform its obligations. Financial instruments that potentially subject the Company to concentrations of credit risk consist of accounts and related party receivables. Any changes in management's estimate of the recoverability of the amount due will be recognized in the period of determination and any adjustment may be significant. The carrying amount of accounts and related party receivables represents the maximum credit exposure.

The Company's cash is held in major Canadian, Mexican and UK banks, and as such the Company is exposed to the risks of those financial institutions. Substantially all of the accounts receivables represent amounts due from the Canadian and Mexican governments and accordingly the Company believes them to have minimal credit risk.

The Board of Directors monitors the exposure to credit risk on an ongoing basis and does not consider such risk significant at this time. The Company considers all of its accounts receivables fully collectible.

b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they became due. The Company's approach to managing liquidity risk is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses. Liquidity risk arises primarily from accounts payable and accrued liabilities and commitments, all with maturities of one year or less.

c) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, commodity prices, and interest rates will affect the value of the Company's financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable limits, while maximizing long-term returns.

The Company conducts exploration projects in Mexico. As a result, a portion of the Company's expenditures, accounts receivables, accounts payables and accrued liabilities are denominated in US dollars and Mexican pesos and are therefore subject to fluctuation in exchange rates.

d) Fair values

The carrying value approximates the fair value of the financial instruments due to the short term nature of the instruments.

5. CAPITAL MANAGEMENT

The Company's objectives in managing capital are to safeguard its ability to operate as a going concern while pursuing exploration and development and opportunities for growth through identifying and evaluating potential acquisitions or businesses. The Company defines capital as the Company's shareholders equity excluding contributed surplus, of $38,296,319 at December 31, 2015 (2014 - $23,172,867), The Company sets the amount of capital in proportion to risk and corporate growth objectives. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. The Company is not subject to any externally imposed capital requirements other than those disclosed in Note 1.

6. PROPERTY AND EQUIPMENT

7. EXPLORATION AND EVALUATION ASSETS

The Company's mining claims consist of mining concessions located in the State of Sonora, Mexico. The specific descriptions of such properties are as follows:

a) Tubutama Borate property

Originally referred to as the Carlos Project, Tubutama Borate project consists of four mining concessions with a total area of 766 hectares. The concessions are located 15 kilometers from the town of Tubutama, and are 100% owned by MIT. During the year, the Company allowed two mining concessions to lapse. The Tubutama property is subject to a 3% gross overriding royalty payable to a director of the Company on sales of borate produced from this property.

For the year ended June 30, 2014 an impairment charge of $1,220,826 was recognized in respect of the Tubutama Borate property. As a result of the Company's decision to let certain of the Tubutama concessions lapse and the Company's focus on the other mining claims an impairment test was performed. The recoverable amount is its value in use and is determined to be $nil as the Company expects no cash inflows to arise related to this property.

b) Magdalena Borate property

Originally referred to as San Francisco and El Represo projects, Magdalena Borate project consists of seven concessions, with a total area of 7,095 hectares. The concessions are located 15 kilometers from the cities of Magdalena and Santa Ana, and are 100% owned by MSB. The Magdalena property is subject to a 3% gross overriding royalty payable to an unrelated third party, and a 3% gross overriding royalty payable to Mr. Colin Orr-Ewing, Chairman of the Company on sales of mineral products produced from this property.

c) Sonora Lithium property

The Sonora Lithium Project consists of ten contiguous mineral concessions. The Company through its wholly-owned Mexican subsidiary, Minera Sonora Borax, S.A de C.V., has a 100% interest in two of these concessions: La Ventana and La Ventana 1, covering 1,775 hectares. The remaining concessions, El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 2 covering 5,325 hectares are held by the Company's subsidiary, Mexilit S.A. de C.V.. Mexilit S.A. de C.V. is owned 70% by Bacanora and 30% by Rare Earth Minerals PLC ("REM").

The remaining three concessions, Buenavista, Megalit and San Gabriel, cover 89,235 hectares, and are subject to a separate agreement between the Company and REM. As at December 31, 2015, Buenavista and San Gabriel are held by the Company's subsidiary, Minera Megalit S.A. de C.V. with the requirement to transfer Megalit concession per the agreement with REM. Megalit S.A. de C.V. is owned 70% by Bacanora and 30% by REM.

The Sonora Lithium property is subject to a 3% gross overriding royalty payable to Mr. Colin Orr-Ewing, Chairman of the Company, on sales of mineral products produced from this property.

The balance of investment in mining claims as of December 31, and June 30, 2015 corresponds to concession payments to the federal government, deferred costs of exploration, and consists of the following:

8. REHABILITATION PROVISION

The Company records a liability for the estimated site rehabilitation costs The site rehabilitation costs consists of slope stabilization, re-contouring and seeding waste piles, and stabilizing and monitoring tailings disposal sites. The present value of the obligation was estimated at approximately $150,000 (2014 - $27,400).

9. SHARE CAPITAL

a) Authorized

The authorized share capital of the Company consists of an unlimited number of voting common shares without nominal or par value.

b) Common Shares Issued

(1) On November 13, 2015, the Company completed a private financing of 11,476,944 common shares at a price of $1.55 per share for aggregate gross proceeds of $17,871,564. The Company paid commission of $354,280 and other share issue expenses of $56,117.

c) Stock options

The following tables summarize the activities and status of the Company's stock option plan as at and during the period ended December 31, 2015.

(1) All options outstanding at June 30, 2015 and September 30, 2015 were exercisable.

d) Warrants

The fair value of these broker warrants issued during the period ended June 30, 2015 was determined at the date of grant using the Black-Scholes option pricing model with the assumptions as follows; risk-free interest rate of 1.91%, expected volatility of 109%, expected life of 5 years, which resulted in a fair value per option of $1.36.

The following tables summarize the activities and status of the Company's warrants as at and during the year ended June 30, 2015 and as at and during the period ended December 31, 2015.

e) Contributed surplus

f) Stock-based compensation expense

During the period ended December 31, 2015, the Company recognized $1,375,332 (2014 - $55,000) of stock-based compensation expense for options granted under the Company's stock option plan. The fair value of stock options granted during the period ended December 31, 2015 was estimated on the dates of grant using the Black-Scholes option pricing model with the following weighted average assumptions, risk-free interest rate of 1.37%, expected volatility of 90%, and expected life of 5 years. The fair value of each stock option was $1.10. Expected volatility is based on historical volatility of the Company's stock prices and comparable peers.

g) Per share amounts

Basic loss per share is calculated using the weighted average number of shares of 91,347,336 for the three months ended December 31, 2015, and 88,247,373 for the six months ended December 31, 2015. (2014 - 78,965,661 and 77,031,759, respectively). Options and warrants were excluded from the dilution calculation as they were anti-dilutive.

10. GENERAL AND ADMINISTRATIVE EXPENSES

11. SEGMENTED INFORMATION

The Company currently operates in one operating segment, the exploration and development of mineral properties in Mexico. Management of the Company makes decisions about allocating resources based on the one operating segment. A geographic summary of the identifiable assets by country is as follows:

12. RELATED PARTY TRANSACTIONS

a. Related party expenses

The Company's related parties include directors and officers and companies which have directors in common. Transactions made with related parties are made in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

During the three and six months ended December 31, 2015, directors and management fees in the amount of $334,243 and $597,655 respectively (2014 - $149,667 and $311,145, respectively) were paid to directors and officers of the Company. Of this amount, $Nil (2014 - $44,146 and $100,023, respectively) was capitalized to exploration and evaluation assets, and $334,243 and $597,655 respectively (2014 - $105,521 and $211,122, respectively) was expensed as general and administrative costs. Of the total amount incurred as directors and management fees, $91,580 (2014 - $45,178) remains in due to related parties on December 31, 2015.

During the three and six months ended December 31, 2015, the Company paid $35,297 and $53,559 respectively (2014 - $22,025 and $39,085, respectively) to a daughter of the Chairman of the Board of Directors of the Company. These services were incurred in the normal course of operations for office administrative services. As of December 31, 2015, $Nil (2014 - $Nil) remains in due to this related party.

During the three and six months ended December 31, 2015, the Company paid $260,533 and $496,074 respectively (2014 - $91,176 and $241,590 respectively) to Grupo Ornelas Vidal S.A. de C.V., a consulting firm of which Martin Vidal, director of the Company and president of MSB, is a partner. These services were incurred in the normal course of operations for geological exploration and pilot plant operation services, as such the entire amount has been capitalized. As of December 31, 2015, $83,820 (2014 - $30,835) remains in due to related parties.

b. Key management personnel compensation

Key management of the Company are directors and officers of the Company and their remuneration includes the following:

(1) Mr. Conroy resigned his positions as Director and VP, Special Projects on June 20, 2014. He remained with the Company as a consultant until October 31, 2014

13. COMMITMENTS AND CONTINGENCIES

The Company has commitments for lease payments for offices in London, UK and field office in Mexico. The total annual financial commitment resulting from these agreements is approximately $140,000.

The properties in Mexico are subject to spending requirements in order to maintain title of the concessions. The capital spending requirement for 2016 is $105,200. The properties are also subject to semi-annual payments to the Mexican government for concession taxes.

14. SUBSEQUENT EVENTS

On January 22, 2016, the Company announced that it has entered into a consultancy agreement with a private company controlled by Mark Hohnen, who is a proposed nominee for election to the Board of Bacanora. The consultancy agreement is for a period of eighteen months and the monthly compensation payable is £19,000 or £342,000 over the entire term of the agreement. In addition to the compensation payable, an aggregate of 1,000,000 options to acquire common shares in the capital of the Company at a price of £0.77 per share for a period of 24 months have been granted to the foregoing private company.

**ENDS**

For further information, please contact:

ABOUT BACANORA:

Bacanora is a Canadian and London listed minerals explorer (TSX-V: BCN and AIM: BCN). The Company explores and develops industrial mineral projects, with a primary focus on lithium and borates. The Company's operations are based in Hermosillo in northern Mexico and it currently has two significant projects under development in the state of Sonora. The two main assets of Bacanora are: 

· The Sonora Lithium Project, which consists of ten mining concession areas covering approximately 100 thousand hectares in the northeast of Sonora State. The Company, through drilling and exploration work to date, has established an Indicated Mineral Resource (in accordance with NI 43-101) of 5.0 Mt LCE contained in 364 Mt of clay at a Li grade of 2,600 ppm and an Inferred Mineral Resource of 3.9 Mt LCE contained in 355 Mt of clay at a Li grade of 2,000 ppm

· The Magdalena Borate Project, covering 16,503 hectares in Sonora state, Mexico, where the Company's main borate zone, El Cajon, has an Indicated Resource (in accordance with NI 43-101) of 1.17 Mt of B2O3, at an eight per cent. cut-off grade. The Company has completed a number of measures to determine the geological and commercial potential of the project and is undertaking a pre-feasibility exercise to determine the economic benefit of developing the mine and constructing a processing plant on site in order to become a supplier of boric acid.