Sonora resource increases
REM's (L:REMP) majority partner Bacanora Minerals (L:BCNB) has reported a significant increase in tonnage, grade and resource confidence for the Sonora Lithium Project in Mexico. The overall improvement has seen a large proportion of the inferred fraction converted to indicated, which is pivotal for the completion of feasibility studies and advancing the project to production. With an offtaker for future Sonora lithium production in place, it is down to Bacanora and REM to push forward with the rapid advance of Sonora to meet the required timeframes given in its offtake agreement.
Sonora’s lithium resource now comprises an indicated mineral resource of 5.0Mt of lithium carbonate equivalent (LCE), from 364Mt of clay ore bearing a lithium grade of 2,600ppm. This is an 18% increase in lithium grade and an increase in indicated resource tonnes of c 340% over the previous inferred estimate of 1.14Mt LCE from 95Mt of clay at 2,200ppm. Inferred tonnages decrease 38% to 3.9Mt LCE, a reduction from the previous estimate of 6.3Mt, resulting from the upgrading of the inferred resource tonnages to indicated. This improved and upgraded mineral resource estimate is integral to the completion of a feasibility study on Sonora to be finalised by Bacanora, expected during Q116. REM has an effective economic interest in the Sonora Lithium Project of 42.04%. For illustrative purposes only, applying our in-house peer group derived lithium resource multiple of US$24.48/t implies a value for REM’s 42.04% of the combined indicated and inferred resource tonnages on an LCE basis of US$218m, or £143m. This compares to its current market cap of £57m. The Sonora Lithium Project FS in Q116 remains the key catalyst to realising the full value of this resource. We expect to reinstate our forecasts on the company by year end.
To Read the Entire Report Please Click on the pdf File Below