Bacanora Lithium (BCN) is the Sonora project in Mexico. BCN with the Sonora project is the crown jewel of the lithium mine in development/ production. This Lithium mine is meant to product cheaply for 250 year lithium south of the USA (Tesla Gigafactory being built not so far). The project has gone through multiple exploration, development stage and it is ready(ish) for production. The Chinese group Ganfeng is a major Lithium producer involve in many projects worldwide. Ganfeng was presented as a partner to supported (speed up) the BCN project development in the recent year. The support of the Ganfeng is helping BCN to reach production stage. Compare to other Lithium stock, BCN share price hasn’t really picked up recently despite the lithium price going up. This year, the BCN friend Ganfeng announce an offer for BCN take over at around 67.5p per BCN share and become less friendly or if you allow me to say “a predator”. BCN is currently funded for reaching the production stage and speak with other shareholder incredibly undervalued. The timing of Ganfeng is optimal to their advantage which is understandable. Ganfeng has the board support also previous communication from the CEO mentioned that there will be not take over of Ganfeng. I am aware that a group of shareholder (BIG: Bacanora Investors Group) is trying to raise awareness on this “surprised” take over and if possible stop it or get a fair value for BCN. I know that several newspaper publication have been published. The Sonora project by it scale, location and economical environment has something of strategical. Loads of the shareholders are currently holding expecting a massive upside on the BCN shortly with the rise of production and lithium price. I am wondering if you have view on this topics. But the Ganfeng move is on the way. Are you holding strong on your shares?
Hi JFM.
I’m not sure Ganfeng’s proposed takeover comes as too much of a surprise. They’re a 29% shareholder in Bacanora Lithium (LON:BCN), principal customer of the Sonora mine through a 50% off take agreement and have provided substantial technical and financial support getting the project off the ground. Take Ganfeng’s various participation’s out of the picture and it’s questionable whether the project would have got off the drawing board at all. The bid is at a 50% premium to the share price in May when the idea of a takeover was formally announced and in the August 25th offer statement the bid was recommended by the independent members of the Bacanora Lithium (LON:BCN) board (the Ganfeng appointed director was excluded from the decision process) and had the support of M&G the other principal shareholder. I don’t think the proposed offer is perfect but I’ve certainly seen worse stitch ups of minority PI shareholders than appears to be the case here. I have tendered my holding to accept the bid.
Gus.
