Prospect raises US$5m for Zim project
TINASHE MAKICHI
Australian Stock Exchange (ASX) listed resources firm, Prospect Resources, has successfully raised A$6.5m (aboutUS$5.06m) fresh capital to help finance the development of its Arcadia Lithium project in Zimbabwe, Business Times can report.
A total of 41.9m new ordinary shares were issued at A$0.155.
The newly-issued shares were given to existing shareholders and new investors in accordance with ASX Listing Rule 7.1 and 7.
The pilot plant at Arcadia is expected to produce high purity petalite and low iron spodumene concentrate for downstream off -takers.
“We are pleased to have received such strong support from our largest shareholder and also welcome a number of new domestic and international institutional investors onto the Prospect register.
“The funds raised will be used to complete the highly accretive acquisition of a further 17% interest in the Arcadia Lithium Project, as well as advance the development funding process following the Optimised Feasibility Study and pilot plant operation, ” Prospect managing director Sam Hosack said.
He said the need for further, high-quality lithium projects to be developed in the face of a looming critical shortage in lithium-ion battery materials is becoming increasingly evident to industry and investment markets.
Arcadia is expected to operate in the lowest cost quartile via production of both low iron spodumene concentrate for the lithium-ion battery market and high purity petalite lithium concentrate for the glass and ceramics markets.
Prospect said it has decided to focus on the pilot plant at Arcadia to produce technical grade petalite samples using dense media separation in accordance with the project’s existing feasibility study flow sheet rather than both petalite and spodumene samples using a flotation flow sheet.
The dense media separation flow sheet is considered the lower risk pathway to near-term production as determined through detailed analysis by management and a number of external third-party experts.
The mining firm said that petalite as a proportion of the Arcadia mineral endowment is significant and increasing the recovery of petalite and maximising sales into the technical market is an important strategic objective as the project progresses.
As a result the pilot plant is considered as a key long-term operational asset for the company and its operation alongside commercial operations is considered vital as it will allow for geo-metallurgical confirmation and optimisation for each ore type prior to feed into the commercial operation.
The pilot plant is expected to produce and ship samples in the first half of this year.
According to the company, the production and export of petalite produced by the pilot plant will provide validation of the readiness of the regulatory and fiscal regime that will apply to the commercial operation.
This “commercial road-test” is expected to de-risk this element of the project for lenders and investors by demonstrating sales receipts through the off-take agreement and the ability to deal freely with foreign currency receipts.
The operation of the pilot plant will allow for the accumulation of knowledge during design, mitigating the scaling issues that peer lithium producers have experienced on account of a too rapid growth in supply.
The petalite flotation increases flow sheet risk, increases capital and operating cost against initial assessments, and would require considerable time and effort to fine tune and perfect for use in a commercial operation.
Hosack said Prospect Resources remain focused to bring the Arcadia Lithium project into production.
As part of developing the project, Prospect has since appointed Renaissance Capital as its exclusive financial advisor in the ongoing discussions with Uranium One to negotiate an equity investment in the company or its subsidiaries.
The lithium mining company also in December last year appointed Afreximbank to arrange and manage the primary syndication of a US$143m project finance debt facility to be partly channelled towards its Acadia project.
