Prospect Resources Announces Arcadia Project Economics Update

  • Mar 05, 2019 AEDT
  • Team Kalkine
Prospect Resources Announces Arcadia Project Economics Update

Prospect Resources Limited (ASX: PSC) has announced that Arcadia Lithium Project would be able to utilize High Pressure Grinding Rolls (HPGR) in its processing design under its value engineering program initiative. The program was started to optimize the plant design by reducing projects capital expenditure and operating costs for its 87% owned Arcadia Lithium Project outside of Harare, Zimbabwe while maintaining or improving metallurgical recoveries.

The use of an HPGR significantly simplifies Arcadia’s processing design replacing tertiary and quaternary crushers. Metallurgical analysis of the HPGR test work results also confirms that there are no negative metallurgical impacts with regards to recovery. The usage of HPGR is expected to deliver reduction of capital expenditure by US$2.3 Mn (1.4%), to US$163 Mn, reduction of operating expenditure by US$7/t or 2.46% (approx. US$3.2m p.a.), to US$278/t, enhanced project NPV101 by US$22 Mn to US$533 Mn, and increased average annual EBITDA by US$3 Mn to US$109 Mn.

The company is focussing in its efforts on identifying further cost reductions and operating improvements to strengthen the Arcadia Lithium Project’s economics.

In its previous updates, the company announced that the Zimbabwe SEZ authority approved its application for SEZ status for its Arcadia Lithium Project. The SEZ status will benefit the firm in reductions of costs & trade barriers related with the import of capital goods and raw materials through to the exportation of the concentrates, savings through tax incentives and exemptions and ability to hold and operate foreign currency accounts. PSC would be able to renew its SEZ license, and even extend it before expiry. It would be valid for ten years.

In its quarterly activity report for December quarter 2018, the company announced various events which included its increase in ownership of the Arcadia Lithium Mine to 87% on 3rd Oct’18, its appointment of investor relations manager on 26th Oct’18, option on Lipropeg Lithium Project signed on 30th Oct’18, quarterly activities and cash flow report on 31st Oct’18, Arcadia DFS confirms leading Lithium Project on 19th Nov’18, Arcadia DFS investor presentation on 19th Nov’18, ground-breaking ceremony at Arcadia Lithium Project on 3rd Dec’18, and its exports of lithium carbonate samples on 11th Dec’18.

Prospect Resources believes that Arcadia project can provide low iron lithium concentrates (Petalite) to the ceramics and glass sector and provide battery specifications focusing on the battery markets. The project is one of the important lithium deposits in the world. As per Arcadia Definitive Feasibility Study, average Life of Mine Cash Operating Cost stood at USD$ 285/t conc., capital costs at USD$165 Mn, sustaining capital at USD$29 Mn, the life of mine spodumene concentrate price at USD$689/t and life of mine Petalite Concentrate Price at USD$457/t.

Prospect Resources is an African battery mineral and Lithium developer company with operations and exploration activities in Zimbabwe and the DRC. At the time of writing (AEST 03:11 PM, 05 March 2019), Prospect Resource traded at $0.02 with the market capitalization of ~$40.92 Mn. Its loss per share was last reported at 0.003 AUD. Its 52 weeks high has been noted at $0.06 and 52 weeks low at $0.019. Its absolute return for 3 months, 1 year and 5 years are -23.08%, -56.52%, and 105.88% respectively.


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