Norton Rose Fulbright advises on ground-breaking mining project in Mexico

Global law firm Norton Rose Fulbright’s teams in London, Mexico City and Ottawa have successfully advised on the debt funding of the strategically significant Sonora lithium project in Mexico, ultimately owned by the AIM-listed Bacanora Lithium Plc.

The teams assisted RK Mine Finance, an affiliate of the Red Kite investment group, in reaching financial close in connection with the financing of the development of this project.

Martin McCann, Global Head of Business at Norton Rose Fulbright, commented:

“We’re delighted to be part of enabling our long-standing client, Red Kite, make such a strategic investment.

“As the electric vehicle (EV) battery revolution has gathered pace, it has underpinned strong growth in demand for lithium, a key component of battery technology. We have also recently advised on a number of other lithium transactions, including the funders on the Altura Mining’s lithium mine in Western Australia. Clearly the other key component of such batteries is cobalt where we have advised many of the leading developers in countries such as the DRC, Zambia and Turkey.

“This transaction really represents a convergence of our mining and renewable resources practices both of which are tier 1.

“This transaction also demonstrates the breadth of our global mining practice and how we are able to seamlessly bring together experts from London, Mexico City and Ottawa to advise on a complex funding structure in order to meet our client’s objectives in a challenging timeframe.”

Details of the transaction:

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, supported by James Rennard and Kate Kimpton. Raquel Bierzwinsky led on Mexican law advice, supported by Dante Trevedan. Canadian law advice was provided by Alison Babbitt in Ottawa.

For further information please contact:

Meeta Campanaro, Senior PR Manager
Tel: +44 (0)20 7444 3097; Mob: +44 (0)7595 886 276
meeta.vadher@nortonrosefulbright.com

Notes for editors:

Norton Rose Fulbright is a global law firm providing the world’s preeminent corporations and financial institutions with a full business law service. The firm has more than 4,000 lawyers and other legal staff based in Europe, the United States, Canada, Latin America, Asia, Australia, Africa and the Middle East.

Recognized for its industry focus, Norton Rose Fulbright is strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare. Through its global risk advisory group, the firm leverages its industry experience with its knowledge of legal, regulatory, compliance and governance issues to provide clients with practical solutions to the legal and regulatory risks facing their businesses.

Norton Rose Fulbright operates in accordance with its global business principles of quality, unity and integrity, aiming to provide the highest possible standard of legal service in each of its offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright Verein, a Swiss verein, helps coordinate the activities of Norton Rose Fulbright members but does not itself provide legal services to clients. Norton Rose Fulbright has offices in more than 50 cities worldwide, including London, Houston, New York, Toronto, Mexico City, Hong Kong, Sydney and Johannesburg. For more information, see nortonrosefulbright.com/legal-notices.