Prospect Resources Releases Lithium DFS for Arcadia

Prospect Resources (ASX:PSC) has completed a definitive feasibility study (DFS) for its flagship Arcadia lithium project in Zimbabwe.

According to the study, the project, set to be a 2.4-million-tonne-per-annum (Mtpa) mining and processing operation, will garner life-of-mine revenue of US$2.93 billion over its estimated 12-year lifespan. Arcadia’s average annual EBITDA clocks in at US$106 million.

Arcadia is expected to produce 212,000 tonnes of 6 percent spodumene, 216,000 tonnes of 4 percent petalite and 188 kilopounds of tantalum per year on average. The company also anticipates that Arcadia will see life-of-mine lithia recoveries of 68 percent through dense media separation, spirals and flotation.

“This DFS represents a significant milestone for Prospect as we transition into development. We are excited by the opportunity to capitalise on the strong fundamentals of the lithium market, initially through the production of lithium concentrates,”  said Prospect Managing Director Sam Hosack.

He added, “[b]ased on the mine economics and financial strength of the project, we are moving swiftly to finance, develop and commence production at Arcadia. We have initiated pre-feasibility works to test the viability of a lithium chemicals plant on site, in order to upgrade our product and capture additional value from the lithium supply chain.”

Going forward, the company intends to use Arcadia’s DFS results to attain more offtake agreements and secure project financing.

In April, the company announced a US$557-million offtake agreement with Sinomine Resource International Trading for a seven-year term. Under the deal it will deliver 280,000 tonnes of spodumene concentrate and 784,000 tonnes of petalite concentrate, around 30 percent of annual production.

Construction and mine development for Arcadia will be managed by Prospect Lithium Zimbabwe, a Prospect subsidiary, and is set to be completed in Q3 2020, with commissioning from November 2020.

Prospect’s share price was down 7.69 percent at the end of trading on the ASX on Monday (November 19). The company closed the day at AU$0.024.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.