UK 07:52 Sunday, 25 October 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Entrepreneurial lithium hopeful Bacanora Minerals (BCN) says it is poised to embark on a feasibility study for its Sonora lithium project on north-eastern Mexico after hoisting indicated resources there 337% to five million tonnes of lithium carbonate equivalent (LCE) in clay at an average 2,600 parts per million.
Already a member? Sign in
• All premium articles
• Tom Winnifrith’s Bearcast
• Access to all the entire nearly 13 year archive
• ShareProphets Daily Newsletter
Cancel any time
This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
Comments
Drunken Sailor
Grades are so low I doubt they can get a commercial scale process to extract even 50% of it from such low grade mud. It is a hell of a lot of mud to dig up and cart to the processing plant to get a very small amount of Lithium out of it.
Drunken Sailor
I note the demand side hype in the SP Angel morning note.
I believe that the scale of the demand increase has been massively over stated. A lot is based on Chinese demand for EPVs which is unlikely to materialise as the Chinese economy weakens. Much of that hype emanates from China as they produce quite a bit of the high grade LiCO3 needed to make EPV batteries. Even higher tech batteries will need the highest grade (99.99% pure) LiCO3. Yes this might get an increase in the premium paid as it costs more to get it that pure and not that many can get it that pure. As far as feed stock prices are concerned it will make no difference, it is the down stream processing and the battery makers themselves who might enjoy the price benefits.
There is no point talking about demand without looking at supply. The demand increase (and I am not saying it won’t increase, just not as much as the hypesters are saying) has been predicted for years and lots of new supply projects from the more conventional rock and brine sources are due to come on line. If BCN manages to bring its muddy lithium online, by the time it does so increased supply will almost certainly be more than covering the increased demand.
Muddy Lithium is a new process and therefore carries a lot more risk. The costs and recovery rates for muddy lithium really are not known and until a decent BFS is done figures given in this area are nothing more than inspired guess work, with added Leni ramp factors thrown in. BCN is over valued on a properly risked NPV basis. With the Leni factor kicking in and REM no longer being in a position to mop up shares in the market, the only way I see for BCN in the short to medium term is down.
If they manage to complete a credible BFS with the cash they have and that BFS shows a decent investment case that would attract the funding needed for a full production project, then maybe there will be a rerating at that point. However for now it is a watch from the side lines stock for me.