Business & Investment

One mining stock to buy now

I EV revolution, And we are always looking for lithium stock with great growth potential.I read some encouragement reports from Bakanora Lithium (LSE: BCN) This suggests to me that it is a mining stock to buy now for my portfolio.

Sonora project

With a worldwide interest, the Sonora Lithium Project in Mexico is Bacanora’s largest asset. In 2018, Sonora’s feasibility study confirmed that Bacanora’s Mexican site is one of the largest lithium deposits in the world. The report concludes that the deposits are easy to mine and will be highly expandable over the next 19 years.

But profitability still has a long way to go. Access roads have not yet been constructed and mining equipment still needs to be procured. The company expects the mine to open in 2023, which could exceed this for years before investors confirm profitability. However, this is true for many lithium sites under development around the world. If I’m going to buy in, it has to be long distance.

Long play

All car companies in the world are moving from gasoline-powered vehicles to battery-powered vehicles. Lithium as an essential battery component could soon replace petroleum as a major global commodity. I think this will make it a stock that will be available for immediate purchase by the major lithium miners of the future. The company’s management is headed by director Eric Carter and plant manager Samir Chefay. Among them, they have over 42 years of experience in lithium mining in North America. Florde Maria Harp, director of the National Geological Survey of Mexico, recently reaffirmed Sonora’s high levels of lithium and its strategic national importance to Mexico.

Possibility of acquisition

February, Chinese mining giant Ganfen He has invested $ 31 million to improve his position in Bakanora and currently owns a 29% stake in the company. In May, we tried to buy the remaining companies at 67.5p per share. The acquisition has not yet taken place, but the deadline for agreeing to the deal has recently been extended to July 29. This is because Bacanora wants a guarantee of direct investment in Sonora’s development. I think the acquisition is likely because the board is clearly interested. Meanwhile, Ganfeng could get approval from Chinese regulators who are keen to expand China’s lithium source.

Words of caution

Bacanora’s share price has fallen from a high of 68p in January to 60p. This is almost three times that of just a year ago, so I think the potential for a bid is already priced. An important risk is that Bacanora plans to extract commercially viable lithium from clay ore, a process that has not yet taken place. Achieved elsewhere. However, for me, it is the stock I buy now. Limit risk by diversifying your investment to several other lithium companies.

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Charles Archer I own a stake in Bacanora Lithium. Motley Fool UK does not have a position in any of the listed shares. The views expressed about the companies in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by exploring different insights, Better investors than us.

One mining stock to buy now One mining stock to buy now

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