Bacanora says terms of a deal with Ganfeng for project and equity funding, offtake and engineering and construction expertise are on "substantially the same terms as outlined" in May this year. This means Ganfeng could end up with up to 50% of Sonora and nearly 30% of Bacanora, the latter through a £14.4 million equity take-up at 25p a share.
Bacanora shares (AIM: BCN) closed down 7.8% Monday at 46.1p.
"Completion of the strategic investment is anticipated by the end of July 2019 and would form a major part of the company's finance package for an initial 17,500 tonnes per annum lithium carbonate operation at the large-scale, high-grade Sonora project in Mexico," Bacanora said.
Bacanora Lithium wants to produce lithium carbonate from clay at Sonora in Mexico.
Hanwa Corporation of Japan previously pulled out of a five-year lithium offtake agreement with Bacanora, and a hoped-for investment from Chinese investor NextView did not happen.
"Let's hope it is third time lucky for Bacanora otherwise it may be sayonara for Sonora,"London-based investment firm SP Angel said this week.
"If Genfeng can't get this project up and running then probably no one can."
Bacanora's share price is up nearly 370% since March 11 but well down on its 95p 52-week high.
London-based investment bank VSA Capital said this week: "We believe that Ganfeng have been attracted to the Sonora project's key fundamentals of low operating costs and the genuine capability to produce battery grade lithium rapidly and consistently."
Bacanora has been running a C$20 million pilot plant in Hermosillo since 2016 to upgrade and process ores from Sonora. The plant continued to produce battery grade (99.5%) lithium carbonate, the company said.
Sonora hosts an estimated 5 million tonnes of lithium carbonate.