I'm not going to run a huge comparison of the company's lithium assets to those of other major producers, but instead try to illustrate the extent to which I think Bacanora Minerals is undervalued with this small spreadsheet (this is tip for a good way to understand Bacanora Minerals' potential, rather than an article explaining why I think it's great):
| Company Name | Total LCE Across Concessions | LCE Production/Year | Opperating Expendature per tonne | Projected/Actual price per tonne | Revenue/Year (expected or actual) | Current Market Cap (USD) | Current Market Cap (GBP) |
| Bacanora Minerals | 5,360,000 | 52,587 | $1,968 | $6,000 | $212,556,654 | $105.49m | £63.19m |
| Sociedad Quimica y Minera | - | 40000 (2010) | - | - | - | $7750m | £4640m |
| Western Lithium | 11,000,000 | 26,000 | $3011 (excluding 2SO4 & NA2SO4 by-product credits) | $6,000 | $124,000,000 | $72.65m | £43.52m |
| RB Energy Inc | 17,100,000 | 13724 | $3194 (excluding 2SO4 & NA2SO4 by-product credits) | $6,000 | $38,509,544 | $89.52m | £53.62m |
In the case of Bacanora Minerals in particular, the total tonnage of LCE was taken from the conservative figures in their admission to trading on AIM presentation:
http://www.bacanoraminerals.com/reports/pdf/investorpresentation.pdf
I also had to make an assumption about the the life of the mine of the El Suaz and Fleur Lithium Projects, which I took (arguably mistakenly) to be twenty years, thereby allowing me to summon a very low estimate of an LCE production figure per year of 17587 tonnes.
I was sadly unable to find figures for Sociedad Quimica y Minera online, who are apparently the largest world producer of LCE and who would have been an excellent comparison for us to make.
Comparing market capitalisations has the potential to be very misleading with these companies as obviously large resource companies like SQM produce more than just LCE and Bacanora Minerals likewise has large borate assets. Consequently, I'm not going to write anymore (I'm a tech trader by heart), but allow the numbers for Bacanora Minerals' lithium projects to speak for themselves. The numbers in the table above for Bacanora Minerals refer to the stake owned by the company itself (excluding Rare Earth Minerals' stake) and I still believe that there is a huge amount more upside available here for the company to become sensibly valued.
To help you make up your mind on the company, I would highly recommend looking in depth at the other companies in this table and at some of the other lithium miners in the world to get an idea for the huge potential that Bacanora Minerals has as a company.
Trade well,
The Masked AIM Trader.
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