Prospect starts lithium production through Arcadia pilot plant

Prospect has started producing high quality petalite samples for potential customers from the pilot plant at its Arcadia hard rock lithium project in Zimbabwe.

This follows the on-schedule and within budget commissioning of the plant, which is expected to produce samples for at least three months with the opportunity to continue production if there is demand.

Prospect Resources (ASX:PSC) is now focused on using the petalite samples from its pilot plant and spodumene samples produced in a partner laboratory to achieve final production qualification with customers.

The company is in discussions with a range of strategic groups from across Japan, China and Europe in recent months who have an interest in spodumene offtake and assisting with development of the project.

“We have successfully demonstrated our capability to deliver this project in Zimbabwe. We now look forward to delivering high purity lithium products to the downstream supply chain to complete respective product qualification processes,” managing director Sam Hosack said.

“The development and operation of the pilot plant allows us to substantially reduce metallurgical risk for Arcadia, whilst demonstrating our ability to successfully operate in our jurisdiction, delivering increased confidence in the outcomes of existing technical study work and projected economics.

“While lithium demand forecasts continue to be revised upwards, the supply base is falling further behind.

“Having secured all requisite development approvals, completed a Definitive Feasibility Study, and now producing high purity lithium samples, Arcadia is one of the very few shovel-ready lithium projects globally.”

prospect — Crushing circuit at Prospect’s Arcadia lithium project. Pic: Supplied

Arcadia lithium project

Arcadia sits just outside of Zimbabwe’s capital Harare and hosts an ore reserve of 37.4 million tonnes at 1.22% lithium oxide and 121 parts per million tantalum pentoxide for 457,000t of lithium oxide and 10 million pounds of tantalum pentoxide.

An optimised feasibility study is underway to assess a staged development plan that will see initial production of 1.2 million tonnes per annum that will then ramp up to the 2.4Mtpa envisioned in an earlier study.

The earlier DFS had already delivered some very robust numbers such as pre-tax net present value (NPV) and internal rate of return (IRR) – both measures of a project’s profitability – of US$710m and 71% respectively.

By way of comparison, an IRR of between 30% and 40% for a mining project is considered to be a good result.

Arcadia also has a low estimated life of mine operating cost of about US$344 per tonne and is expected to generate average annual earnings before interest, tax, depreciation and amortisation of US$168m for 15.5 years.

This article was developed in collaboration with Prospect Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.