Sonora lithium project’s Financing

Norton Rose Fulbright advised on the debt funding of the strategically significant Sonora lithium project in Mexico, ultimately owned by the AIM-listed Bacanora Lithium Plc.

Bacanora Lithium Plc is an AIM-listed company which, through its Mexican subsidiaries, owns mining concessions in the State of Sonora in Mexico. A feasibility study has confirmed the positive economics and favourable operating costs of a 35,000 tonnes per annum battery grade lithium operation.

Red Kite is leading specialist in the provision of senior debt capital to mining companies and has committed over US$1.4 billion to mining companies since its inception in 2008.

The financing is structured as two separate Eurobonds, with a face value of up to US$150 million and US$56 million, respectively, each to be drawn in three tranches. The US$150 million facility has an interest rate of 8 per cent above three-month LIBOR for six years. The US$56 million, zero coupon bond has a 20-year term and will be repaid by reference to monthly production of lithium at a rate of US$160 per tonne of lithium produced. In addition, Bacanora has granted 6 million warrants exercisable over five years at a 20 per cent premium to the 20-day volume-weighted average price of the company’s shares.

Norton Rose Fulbright advised on all aspects of the financing transaction. The transaction was closed within an extremely tight timeframe.

The debt team in London was led by Martin McCann (Picture), supported by James Rennard and Kate Kimpton. Hernan Gonzalez Estrada and Raquel Bierzwinsky led on Mexican law advice, supported by Dante Trevedan. Canadian law advice was provided by Alison Babbitt in Ottawa.

 

Involved fees earner: Martin McCann – Norton Rose Fulbright; Raquel Bierzwinsky – Norton Rose Fulbright; Alison Babbitt – Norton Rose Fulbright; James Rennard – Norton Rose Fulbright; Kate Kimpton – Norton Rose Fulbright; Dante Trevedan – Norton Rose Fulbright; Hernán González Estrada – Norton Rose Fulbright;

Law Firms: Norton Rose Fulbright;

Clients: Bacanora Lithium Plc;