African lithium developer, Prospect Resources Ltd has announced a number of key developments at its flagship Arcadia lithium project in Zimbabwe after a detailed strategic review by management and a number of external third-party experts on the pathway to near-term production.
The strategic review concluded that an initial smaller commercial-scale production facility at Arcadia utilising the existing feasibility study (FS) dense media separation (DMS) flowsheet will allow greater speed to market, higher technical certainty, significantly lower risk, and a reduced capital and operating-cost operation, when compared to inclusion of petalite flotation (in place of DMS) to increase the recovery of petalite from the ore body.
It was assessed that the potential increase in petalite recovery was insufficient justification to compensate for the higher technology risk for start-up operations.
In line with the staged development plan, the company has agreed to appoint an independent lithium focused engineering firm to undertake the revised FS, which will include a Front-End Engineering and Design to improve technical certainty and reduce execution risk in providing greater accuracy on equipment selection, sizing and resulting project economics.
This decision has also resulted in changes to the pilot plant design which will use the DMS flow sheet to deliver petalite product samples for glass ceramic customer qualification with greater speed and certainty than the alternative flotation flowsheet.
Prospect highlighted that the pilot plant remains an asset with tremendous technical benefit operating in conjunction with commercial production.
On the corporate front, the company and Farvic Consolidated Mines Pvt Ltd have agreed to extend the final date for completion of the sale and purchase of Farvic’s interest in the Arcadia project to 31 December 2021 (refer to ASX announcement dated 3 October 2018).
The agreement increases Prospect’s ownership in the Arcadia Lithium Mine from 70 per cent to 87 per cent, maximising the company’s exposure to the economic potential of Arcadia.
These strategic actions, enabling the pathway to near November 2018-term production, have allowed the company to advance discussions with its existing offtake partners, strategic corporate and institutional financiers as well as early-stage discussions to consider a development joint venture with a large corporate investor.
Prospect Resources Managing Director, Sam Hosack, said the lithium market has shown signs of coming into balance which demands a rethink to secure best time to market.
“Our current focus is the revised pilot plant which adopts the greatest technical certainty to facilitate financing, delivering key objectives for customer qualification, project finance parties and investors in de-risking the Arcadia Project,” Mr Hosack said.
“The staged development plan of 1.2 million tonnes per annum (Mtpa) to 2.4Mtpa reduces time to production by leveraging lower capital expenditure and will enable expansion in line with market growth. This development strategy allows risks to be managed effectively. Critically, Prospect maintains the ability to go direct to nameplate capacity of 2.4Mtpa should market conditions and funding activities allow.”
“We are excited to extend the sale and purchase agreement with Farvic, which upon completion, gives PSC 87 per cent equity stake in the Arcadia Project. The transaction was previously assessed as being accretive to PSC shareholders and we believe this to still be the case,” he commented.