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Updated study improves economics for Prospect Resources' Arcadia lithium project

Prospect Resources Ltd. updated its pre-feasibility study on the Arcadia lithium project in Zimbabwe, estimating a pretax net present value, discounted at 10%, of US$340 million, a 77% internal rate of return and a 2-year payback period.

The company updated the study after a 70% increase in reserves tonnage at Arcadia, to 26.9 million tonnes at 1.31% lithium oxide and 128 parts per million of tantalum pentoxide, which is expected to support a mine life of over 20 years.

The life-of-mine revenue is now pegged at US$2.6 billion over a 22-year mine life, according to a March 19 release.

Cash operating cost totals US$287 per tonne of concentrate, while the capital expenditure remains at US$52.5 million.

The average life-of-mine output from the project is now expected at 96,000 tonnes per annum of spodumene, 127,000 tpa of petalite, 98,000 pounds per annum of tantalite contained in concentrate and 27,000 tpa of total lithium carbonate equivalent.

In the July 2017 pre-feasibility study, the life-of-mine revenue estimate stood at US$2 billion and cash operating cost was US$320 per tonne of concentrate.

The company previously pegged a net present value, discounted at 10%, of US$139 million, with a 39% internal rate of return and a payback period of less than 2 years.