SONORA LITHIUM PROJECT FS TECHNICAL REPORT TECHNICAL REPORT ON THE FEASIBILITY STUDY FOR THE SONORA LITHIUM PROJECT, MEXICO January 2018 January 2018 Prepared For Bacanora Minerals Ltd Prepared by Ausenco Services Pty Ltd 144 Montague Rd South Brisbane Australia Effective Date: December 12, 2017 Issue Date: January 25, 2018 101304-FS-0004-Tech Report rev 0.docx SONORA LITHIUM PROJECT FS TECHNICAL REPORT CERTIFICATE OF QUALIFIED PERSON I, Joel A. Carrasco, P.E., do hereby certify thhat: 1. I am a Principal Engineer, Solum Consulting Group, 350 S Jackson st. #454 Denver, Colorado 80209 USA. 2. This certificate applies to the technical report titled “Technical Report on the Feasibility Study for the Sonora Lithium Project, Mexico, January 2018” (the “Technical Report”), prepared for Bacanora Minerals Limited; 3. The Effective Date of the Technical Report is 12 December 2017. 4. I am a graduate of Texas Tech Univerrsity, Texas with a Bachelor of Scieence degree in Civil Engineering. I have worked as a Civil Engineer continuously for a total off 15 years since my graduation from University. My relevant experience has been working as Project Manager for multi-national engineering companies on feasibility studies and engineering designs of tailings facilities; 5. I am registered as a Professional Engineer in the State of Arizona (Licence # 52000). 6. I havve read the definition of “Qualified Person” set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experrience, I fulfil the requirements to bee a “Qualified Person” for the purposes of NI 43-101. 7. I am co-author and reviewer of this report and have specific responsibilitty for sections 1.11, 1.16.5, 4.4, 4.6, 4.7, 4.8, 5, 18.10, 18.14, 20, 25.5, 26.5, and 27, unless subsections are specifically identified by another Qualified Person. 8. I visited the Sonora property on the 19th August, 2015. 9. I am independent of Bacanora applying all of the tests in section 1.5 of NI 43--101. 10. I have had prior involvement with the property that is the subject of the Technical Report. I was a QP for the NI 43-101 PFS Technical Report. 11. I have read NI 43-101 and Form 43-101FF1; the sections of the Technical Repport I am responsible for have been prepared in compliance wiith that instrument and form. 12. As of the aforementioned Effective Date, to the best of my knowledge, information and belief, the sections of the Technical Report I am responsible for contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading. Dated this 25th day of January, 2018. Joel A Carrasco, P.E. 101304-FS-0004-Tech Report rev 0.docx iv Table of Contents 1 EXECUTIVE SUMMARY ..................................................................................... 1 1.1 Introduction .............................................................................................................................. 1 1.2 Accessibility, Local Resources, Infrastructure and Physiography ........................................... 1 1.3 Geological Setting and Mineralisation ..................................................................................... 2 1.4 Mineral Resource Estimation ................................................................................................... 2 1.5 Mineral Reserve Estimation ..................................................................................................... 3 1.6 Mining Methods ....................................................................................................................... 4 1.7 Metallurgical Testwork ............................................................................................................. 4 1.8 Recovery Methods ................................................................................................................... 5 1.9 Project Infrastructure ............................................................................................................... 6 1.10 Marketing Studies .................................................................................................................... 7 1.11 Environmental Studies ............................................................................................................. 8 1.12 Capital Cost Estimate .............................................................................................................. 8 1.13 Operating Cost Estimate .......................................................................................................... 9 1.14 Financial Analysis .................................................................................................................. 10 1.15 Conclusions and Recommendations ..................................................................................... 11 1.16 Forward Work Program ......................................................................................................... 11 2 INTRODUCTION ............................................................................................... 14 2.1 Background ............................................................................................................................ 14 2.2 Project Scope and Terms of Reference ................................................................................ 14 2.3 Study Participants .................................................................................................................. 14 2.4 Site Visit ................................................................................................................................. 15 2.5 Frequently Used Abbreviations, Acronyms and Units of Measure ........................................ 15 3 RELIANCE ON OTHER EXPERTS ................................................................... 19 4 PROJECT DESCRIPTION AND LOCATION .................................................... 20 4.1 Property Area ......................................................................................................................... 20 4.2 Project Location ..................................................................................................................... 20 4.3 Mineral Tenure ....................................................................................................................... 20 4.4 Surface Rights ....................................................................................................................... 26 4.5 Royalties ................................................................................................................................ 26 4.6 Environmental Liabilities ........................................................................................................ 26 4.7 Permits ................................................................................................................................... 26 4.8 Site Access Risk Factors ....................................................................................................... 27 5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY .............................................................................................. 28 5.1 Topography ............................................................................................................................ 28 5.2 Site Access ............................................................................................................................ 28 101304-FS-0004-Tech Report rev 0.docx TOC i 5.3 International Access .............................................................................................................. 28 5.4 Regional and Local Access ................................................................................................... 29 5.5 Physiography ......................................................................................................................... 29 5.6 Climate ................................................................................................................................... 29 5.7 Infrastructure .......................................................................................................................... 29 6 HISTORY ........................................................................................................... 30 6.1 Previous Mapping and Surface Sampling ............................................................................. 30 6.2 Drilling by Previous Explorers ................................................................................................ 30 6.3 Previous Mineral Resource Estimation .................................................................................. 30 7 GEOLOGICAL SETTING AND MINERALISATION .......................................... 35 7.1 Regional Geology and Tectonics ........................................................................................... 35 7.2 Deposit Stratigraphy .............................................................................................................. 35 7.3 Deposit Structure ................................................................................................................... 36 7.4 Mineralisation ......................................................................................................................... 37 8 DEPOSIT TYPE ................................................................................................