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Prospect to secure over US$55M funding to advance Arcadia lithium project

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Prospect to secure over US$55M funding to advance Arcadia lithium project

Prospect Resources Ltd. expects to secure over US$55 million in funding for the first phase of its Arcadia project in Zimbabwe, aiming to start lithium concentrate production for export by June 30, 2019.

The current funding is a mix of equity and off-take prepayment, and the company is considering additional indicative finance offers, which are a mix of foreign debt and equity, off-take prepayment and local borrowings.

The company said May 21 that designing, building and funding the first stage, which includes the mine and the concentrate plant, are on track.

Sinomine, which has a seven-year off-take agreement for about 70% of phase-one production, has already invested A$10 million via a share placement at 6 Australian cents apiece. It will make an additional US$10 million advance payment for lithium concentrates once the ball mill is bolted down.

Prospect said it is looking to finalize off-take deals for the remaining 30% of phase-one production.

Meanwhile, the company's newly appointed earth-moving contractor for Arcadia, JR Goddard Pvt. Ltd., is expected to start mobilizing plant and equipment immediately and to break ground in the coming weeks.

An updated pre-feasibility study on the Arcadia project estimated a pretax net present value, discounted at 10%, of US$340 million, a 77% internal rate of return and a two-year payback period.