Calgary -
Bacanora Minerals Ltd. ("Bacanora" or the "Company") (TSX-V: BCN and AIM: BCN), the Canadian and London listed lithium exploration and development company, announces that it has filed a statement of claim with the Court of Queen's Bench (Alberta) seeking to void ab initio, a 3% gross over-riding royalty held by the Estate of Colin Orr-Ewing over certain of the Company's lithium assets in Sonora, Mexico (the "Royalty"). In addition, ahead of the completion of the Feasibility Study for the Sonora Lithium Project in Q4 2017 and Bacanora's transition from an exploration to a development company, the Company announces amendments to the employment arrangements of certain members of the executive management team.
The Royalty
The basis of the Company's claim is that the Royalty was originally granted based on the misrepresentation of Colin Orr-Ewing that he held a pre-existing royalty granted prior to the acquisition of the lithium properties by the Company. The Board of Directors of Bacanora has completed a review of the historical background and concluded that no such pre-existing royalty existed and accordingly there was no basis for the grant of the royalty by the Company. Further updates on the progress of the claim will be provided to the market as and when it is appropriate to do so.
Executive Employment Arrangements
With the Feasibility Study for the Sonora Lithium Project nearing completion, Bacanora is set to transition from an exploration to a development company. To reflect this change, the Company's independent directors have reviewed the current executive employment arrangements and agreed to amend the employment and consultancy arrangements respectively between the Company and each of Peter Secker, Chief Executive Officer, and Fernan Pty Ltd, which provides the services of Mark Hohnen, Executive Chairman.
In line with this, Peter Secker has been issued with a new English law governed service contract. This is on broadly similar terms to the existing Canadian law governed service contract which has been terminated, save for changes required to meet English law and practice requirements and for the following material changes:
(i) the removal of performance bonus provisions of up to £250,000;
(ii) the removal of a £250,000 change of control payment;
(iii) an increase of £50,000 in annual salary;
(iv) the inclusion of new pensions arrangements; and
(v) the inclusion of a cash payment representing an acceleration of unvested options in the event of a change of control of the Company at an acquisition price of at least 130 pence per Bacanora share. Such cash payment will be calculated on the basis of the difference between the acquisition price per Bacanora share and 102 pence (being the middle market price of a Bacanora share at close of business in London on 17 November 2017), multiplied by 2,550,000 in the event that such change of control is completed prior to the award of performance based options in relation to the financial year ended 30 June 2018 and a further 2,550,000 in the event that such change of control is completed prior to the award of performance based options in relation to the financial year ended 30 June 2019. In the event the Board has resolved upon Mr Secker's award in the relevant financial year (which may be zero) then the right to the relevant payment terminates for that period.
The consultancy agreement with Fernan Pty Ltd has been amended to provide Mark Hohnen also with a cash payment representing an acceleration of unvested options in the event of a change of control of the Company on the same terms as Peter Secker, save that the multiplier for each relevant financial year is 2,124,150.
The changes to the employment arrangements are considered to be related party transactions under the AIM Rules for Companies. The independent directors, having consulted with independent remuneration consultants and the Company's Nominated Adviser, consider that the terms of these amended arrangements are fair and reasonable insofar as the Company's shareholders are concerned.
**ENDS**
For further information please visit www.bacanoraminerals.com or contact:
For further information, please contact:
Bacanora Minerals Ltd.
Peter Secker, CEO
info@bacanoraminerals.com
Cairn Financial Advisers LLP, Nomad
Sandy Jamieson/Liam Murray
+44 (0) 20 7213 0880
Canaccord Genuity, Broker
Martin Davison, James Asensio
+44 (0) 20 7523 8000
St Brides Partners, Financial PR Adviser
Frank Buhagiar / Megan Dennison
+44 (0) 20 7236 1177
ABOUT BACANORA:
Bacanora is a Canadian and London listed lithium exploration and development company (TSX-V: BCN and AIM: BCN). The Company is exploring for, and developing a pipeline of international lithium projects, with a primary focus on the Sonora Lithium Project. The Company's operations are based in Hermosillo in northern Mexico. The Company is led by a team with lithium expertise and proven mine development, construction and operations experience.
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 4.5 million tonnes (LCE1) and 2.7 million tonnes Inferred.2 A Pre-Feasibility Study completed in Q1 20163 established Probable Mineral Reserve (in accordance with NI 43-101) of 2.1 million tonnes LCE and demonstrated the economics associated with becoming a 35,000 tpa lithium carbonate and 50,000 tpa SOP producer in Mexico.
In addition to the Sonora Lithium Project, the Company also has a 50% interest in the Zinnwald Lithium Project in southern Saxony, Germany. The Zinnwald Lithium Project is located in a granite hosted Sn/W/Li belt that has been mined historically for tin, tungsten and lithium at different times over the past 300 years. The strategic location of the Zinnwald Lithium Project allows immediate access to the German automotive and downstream lithium chemical industries.
Reader Advisory
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to potential future payments under executive employment arrangements. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: commodity price volatility; general economic conditions in Canada, the United States, Mexico and globally; industry conditions, governmental regulation, including environmental regulation; unanticipated operating events or performance; failure to obtain industry partner and other third party consents and approvals, if and when required; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; competition for, among other things, capital, skilled personnel and supplies; changes in tax laws; and the other risk factors disclosed under our profile on SEDAR at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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.
2 See Amended Mineral Resource Estimate for the Sonora Lithium Project, Mexico, April 2016. The lead author of the amended report is Mr. Martin Pittuck (MSc., C.Eng., FGS, MIMMM) of SRK Consulting (UK) Limited ("SRK"). A copy of this report is available under Bacanora's corporate profile at www.sedar.com.
3 See Technical Report on the Pre-Feasibility Study for the Sonora Lithium Project, Mexico, 15 April 2016. The authors of the PFS are Ausenco Limited, SRK and Independent Mining Consultants Inc. A copy of this report is available under Bacanora's corporate profile at www.sedar.com.
