Business

ASX-listed firm fundraises for Zim lithium

Lithium is envisaged to contribute to the Government’s plan to grow the mining sector to US$12 billion by 2023.

Business Reporter

Prospect Resources developer of the Arcadia lithium project near Harare has begun discussions with financiers to unlock funding for the staged development of a petalite pilot plant needed to achieve near-term production, the mining junior said last week.

The company is in discussions with financiers, strategic corporate and institutional funders.

Talks to consider developing a joint venture with a large corporate investor are presently in the early stages, while discussions with potential offtake partners in relation to its spodumene (chemical grade lithium) profile and staged development plan are underway.

In its half-year financials for the period ended December 31, 2020, Prospect said it had completed a strategic view which recommended construction of a smaller, commercial-scale petalite pilot plant at the Arcadia Lithium Mine.

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At Arcadia, Prospect has huge deposits of both technical grade (petalite) and chemical grade (spodumene) lithium, but wants to rapidly progress the former through a low risk, low cost and high return near-term production under a staged development plan.

Lithium is envisaged to contribute to the Government’s plan to grow the mining sector to US$12 billion by 2023.

Already, mining is Zimbabwe’s largest foreign-currency earner, contributing over 75 percent of total export earnings last year.

Studies have shown that Prospect can have easy access the market, achieve higher technical certainty, reduce risk and cut capital outlay and operating costs than using the revised production process to near-term production.

“It was assessed that the potential increase in “petalite lithium” recovery (through floatation process alternative) was insufficient justification to compensate for the higher technology risk for start-up operations,” Prospect said.

In line with the revised phased development model, the junior lithium miner said it had agreed to appoint an independent, lithium-focussed engineering firm to undertake the revised feasibility study.

This will entail front-end engineering and design to increase technical certainty and reduce execution risk in providing greatest accuracy in equipment selection, sizing and project economics.

“This development strategy allows risk to be managed progressively, reduce upfront capital, supports reduced execution period and will be undertaken with the objective to achieve nameplate capacity of 2,4 million tonnes per annum (Mtpa) outlined in the feasibility study,” Prospect added.

 The company notes that while staged development was the focus, Prospect had the ability to go straight to the nameplate potential of 2,4Mtpa, while internal assessment of 0,6Mtpa and 1,2Mtpa showed the project can deliver good economics.

The project has pre-tax net present value of US$710 million (after 10 percent discount), pre-tax internal rate of return of 71 percent and 15,5 years life of mine.

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