Operational update and issue of equity

21 May 2021

Bacanora Lithium plc

("Bacanora" or the "Company")

Operational update and issue of equity

Bacanora Lithium plc (AIM: BCN), a lithium development company, is pleased to provide an operational update covering site activities at the Sonora Lithium Project (the "Project"), located in Mexico, as well as an update on the issuance of 53,333,333 new ordinary shares of £0.10 each in the Company ("New Ordinary Shares") to Ganfeng Lithium Co., Ltd ("Ganfeng").

Operational update

To date, the Company has rescued, removed and stored the surface vegetation and topsoil in the area required for the construction of the lithium processing plant. This work was carried out with the help of a local specialist ecological services company based in Sonora in compliance with the highest environmental standards. As announced previously, the surface vegetation and topsoil is being stockpiled on the lease as it will be incorporated into the future project rehabilitation schedule.

Bacanora has prepared the tender packages for the plant's site bulk earthworks, construction accommodation and access road and will commence discussions with bidders during Q2 2021 to enable construction works to begin on-site in Q3 2021. Bacanora will provide an update to the market once decisions have been finalised. Furthermore, Bacanora has commenced the recruitment process for the remaining key management team personnel required to deliver the Project.

In addition, the Company has purchased the Las Perdices land package, located directly south of the existing areas previously purchased in 2019. These additional 9,000 hectares will provide the Company with greater access to flatter land, ensuring reduced earthwork costs alongside vital emergency access. The borefield test wells have also been finalised, and the extraction well design is underway. Work will commence in Q3 2021 on the borefield to initially support the Project construction stages and subsequently, the lithium processing operations.

The Bacanora construction team has now also commenced upgrading the temporary construction access road. This follows the completion of the preparatory work required, as detailed in February 2021, to ensure access to the minesite for the heavy equipment to commence the bulk site earthworks later this year.

Ganfeng is currently commencing the tendering process in China for the larger engineering packages and is focusing on a delivery and construction schedule to commence commissioning of the lithium plant in H2 2023.

Issue of equity

Further to the announcement of 5 February 2021 in relation to the exercise of Ganfeng's pre-emptive right to increase its holding in Bacanora following the Company's placing and retail offer of 3 February 2021, Bacanora confirms that cash has now been received from Ganfeng and application has been made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. Ganfeng has subscribed for 53,333,333 New Ordinary Shares at the Placing Price of 45 pence per share, representing gross proceeds of approximately US$34 million. It is currently expected that Admission will become effective, and that dealings in the New Ordinary Shares will commence on AIM, on or around 8.00 a.m. on 26 May 2021. On Admission, the Company will have 384,144,901 shares in issue, and Ganfeng will have an interest in 110,933,697 Ordinary Shares, representing 28.88% of the Company's issued share capital.

For further information please visit www.bacanoralithium.com or contact:

Notes to editors

Bacanora Lithium Plc is an AIM-listed (ticker 'BCN') lithium development company. The Company is focused on building, in collaboration with its major shareholder and offtake partner, Ganfeng Lithium (the world's largest lithium metals producer), a 35,000 tonne per annum open pit lithium carbonate operation at its flagship asset, the Sonora Lithium Project in Mexico. The Sonora Lithium Project has 8.8 million tonnes of lithium carbonate (Li2CO3) equivalent resources, with an approximate 250-year resource life, as detailed in its December 2017 Feasibility Study.

Sonora Lithium Ltd ("SLL") is the operational holding company for the Sonora Lithium Project and owns 100% of the La Ventana concession. The La Ventana concession accounts for 88% of the mined ore feed in the Sonora Feasibility Study which covers the initial 19 years of the project mine life. On completion of this option exercise, SLL will be owned 50% by Bacanora and 50% by Ganfeng Lithium Co., Ltd. SLL also owns 70% of the El Sauz and Fleur concessions. 

Bacanora also owns 44.2% of Zinnwald Lithium Plc (AIM: ZNWD), which in turn owns a 50% interest in the Zinnwald Lithium Project and the Falkenhain and Altenberg Licences in southern Saxony, Germany.