By Staff Reporter
HARARE (Mining Index) – AUSTRALIAN and Frankfurt Stock Exchange listed miner, Prospect Resources at the close of October announced that the lithium miner had received firm commitments for A$18 million in new equity proceeds through an institutional placement. Among its priorities for the raised funds, Prospect endeavours to perform further mining explorative activities in the Southern African region.
In a press statement, the miner’s Managing Director, Sam Hosack gave details of the mouth-watering development:
“The Placement was undertaken at an issue price of A$0.40 per share, raising A$18 million before costs via the issue of approximately 45 million New Shares to institutional and sophisticated investors.”
The Placement was propped up by the firm’s largest shareholder Eagle Eye Asset Holdings Pte Ltd as well as new Australian and international institutional investors.
Sam Hosack shed light on the intended use for the raised funds:
“Funds raised from the Placement are to be principally used for: Advancing development of the Arcadia Lithium Project (Arcadia or the Project) through Front End Engineering and Design (FEED), to undertake early works and secure long lead items; Advancing the current strategic partnership process…and General working capital purposes.”
In a separate official statement, Sam also highlighted the enterprises commitment toward further explorative endeavours in the Southern African region:
“We have a focus of expanding our footprint in Southern Africa through further regional explorations namely for future, forward facing commodities…rare earth minerals and lithium as well.”
Prospect Resources owns an 87% stake in the Arcadia Lithium project in Zimbabwe, 38km east of Zimbabwe’s capital- Harare. The mining asset, according to the most recent geological surveys conducted by the firm; contains 72.7 million tonnes at 1.06% lithium oxide and 119 parts per million tantalum pentoxides for 770,200 of Li2O and 19.4Mlbs of Ta2O5 at a 0.2%Li20 cut-off grade. The firm’s project sits on the world’s 8th largest hard rock lithium deposit and is also the world’s largest petalite deposit.
2021 has been a fruitful year for Prospect Resources with several milestones attained. Earlier this year, Prospect Resources commissioned its Arcadia lithium pilot plant.
Also in the year, Prospect completed a ‘Staged Optimised Feasibility Study’ that outlines the technical and economic viability of its Arcadia lithium project, an asset with a 15.5 year mine life.
Major highlights from the study are; a pre-tax internal rate of return and net present value, of 35% and US$465m along with average annual earnings before interest, taxes, depreciation, and amortisation of US$97m for the completed project. Pre-production capital expenditure is estimated at US$140m for the first stage during the first four years and a further US$72m in the second stage.
All-in-sustaining costs are estimated at US$405 per tonne of concentrate during the first stage and US$383/t during the second. This study confirms Arcadia as one of the only independent, shovel-ready projects globally without offtake totally locked up
According to stockhead.com.au, Arcadia is currently envisioned as a conventional truck and shovel open pit with waste dumps located as close as possible to pit exit points to minimise haulage profiles without disrupting the access to the minable resource or crushing plant.
Prospect is currently running a partnership process being managed by Azure Capital and Vermilion Partners, with strong interests from several groups focused on the Direct OFS outcomes
At the COP26 global climate change event held in Glasgow, several nations made commitments toward the reduction of carbon emissions with growing clamours for environmentally friendly power initiatives.
Electric vehicles, which have insignificant carbon emissions have gained traction in recent years. The surge in EVs spells increased demand for lithium and nickel, vital minerals in the lithium-ion batteries used in the manufacture of EVs.
Manufacturers commonly use lithium carbonate or lithium hydroxide in these batteries rather than the lithium metal. Although lithium is a key ingredient in lithium-ion batteries, they also include other metals such as cobalt, graphite and nickel.
Historically, lithium prices have traded around $5 per kilogramme. Demand growth in the lithium-ion market during 2015-2016 superseded industry expectations as prices peaked at just above $20/kg. . In the nine-months to September 2021, lithium prices were up over 275%, with a tonne of the metal trading at over US$ 27 350.
According to the most recent stats issued by the US Geological Survey, Zimbabwe is the world’s fifth largest lithium producer after Australia, Chile, China and Argentina respectively having produced 1 600 metric tonnes in 2019 with a potential of accounting for 20% of the global lithium demand
In 2020, Prospect expressed an interest to list on Zimbabwe’s new USD denominated bourse, the Victoria Falls Stock Exchange. Currently, only 2 counters have listed on the bourse since its launch roughly 18 months ago. Limited trades have been recorded on the market to date. Prospect is yet to list on the market. ENDS// www.miningndex.co.zw
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