Prospect Resources

Prospect Resources has announced a significant value upgrade of Arcadia lithium project following an updated pre-feasibility study. Positive improvements in key project parameters enhance the economics of the project confirming Arcadia as a significant future supplier of lithium to the global market.

Zimbabwe – Prospect Resources announced that it has revised its Pre-Feasibility Study (PFS) over the Arcadia lithium project in Zimbabwe.Since the PFS was announced in July 2017, the company has:

  • Increased the mineral resource to 43.2 Mt @ 1.41% Li2O and 119 ppm Ta2O5
  • Completed an XRD programme on 3,162 lithium ore samples to gain a greater understanding of the lithium mineralogy resulting in an increased in the ratio of higher value spodumene to petalite minerals within the orebody
  • Increased the ore reserve to 26.9 Mt at 1.31% Li2O  and 128 ppm Ta2O5
  • Entered into a conditional, long-term off-take agreement with Sinomine with a
    Spodumene and Petalite concentrate formulae based on the price of lithium carbonate
    imported into China and concentrate prices sold on an FOB Port of Beira basis
  • Increased our understanding of the recently defined basal and lower pegmatites in the
    southwest of the planned pit area

This updated data has been incorporated into the project’s financial model resulting in a pretax NPV10 of US$340 million and an IRR of 77%.

The PFS financial model estimates a net revenue of US$2.6 billion over a 22-year mine life. Pricing has been increased compared to the PFS reflecting the pricing formulae in the off-take agreement, which, consistent with other industry contracts is linked to the lithium carbonate price.

The revenue was further improved due to the higher ratio of spodumene to petalite mineralisation identified by the XRD work on the orebody resulting in more lithium reporting to the higher value spodumene concentrate.

Unit operating costs net of tantalum credits average $287/t of lithium concentrate.

The reduced unit cost compared to the PFS mainly reflects reduced transport costs with the concentrates being sold on a FOB Port of Beira rather than a CFR China port basis.

The estimated capital expenditure remains the same as the PFS at $52.5 million following ongoing discussions with equipment and infrastructure suppliers.