Bacanora’s lithium project in Mexico three times richer than thought

The project, said the company, holds 5.0 million tonnes of lithium carbonate equivalent, which is 337% higher than the previously reported 1.14 million tonnes.

In addition, Sonora’s inferred mineral resource has been estimated as a total of 3.9 Mt of LCE2 contained within the deposit.

Last week, the company announced it had raised roughly Cdn $17.8 million to advance work at the project, which Bacanora describes as “one of the largest” lithium resources in the world.

The venture is made up of Bacanora’s 100%-owned La Ventana lithium concession; the El Sauz and Fleur concessions, which are held by Mexilit S.A. de C.V.; and the Megalit concession, which is held by Megalit S.A. de C.V. Bacanora owns 70% of Mexilit and Megalist, and REM owns 30%.

Back in August, Bacanora and joint-venture partner Rare Earth Minerals (LON:REM) signed a conditional agreement with Tesla Motors (NASDAQ: TSLA) to supply the electric sports car and energy storage products company with lithium hydroxide from the Sonora project.

Lithium prices are tipped to jump 20% by 2017 as a result of a widespread adoption of electric cars, which use lithium-ion batteries, Citi analysts say.

They are confident on the new vehicles success, forecasting production of pure electric models (not hybrids) like the Nissan Leaf or the Tesla Model S to rise from about 150,000 in 2015 to about 290,000 in 2016.

By 2020, Citi expects 1.04 million electric cars to be in production, implying sevenfold growth over five years.

Currently, electric vehicles account for about 6% of global demand for lithium carbonate.