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- African lithium explorer Prospect Resources’ (PSC) shares are trading more than 9 per cent higher on the back of its September quarterly results
- In August, the company secured a seven-year offtake agreement with global minerals company, Sibelco
- Sibelco agreed to offtake up to 700,000 dry metric tonnes of ultra-low iron petalite concentrate from Prospect’s Arcadia Lithium Project in Zimbabwe
- Prospect also confirmed the Arcadia Project’s position as a potential key player in the glass and ceramics industry
- Prospect kept operating expenditure significantly lower compared to the June quarter – slashing it almost by half
- By the end of September, Prospect had around $1.38 million in cash and received a US$10 million (roughly A$14.1 million) funding commitment from an existing offtake partner
- Company shares are up 9.09 per cent and are trading for 12 cents
Prospect Resources’ (PSC) shares are trading more than 9 per cent higher today on the back of its September quarterly results.
In August, the lithium explorer secured an offtake agreement with global industrial minerals company, Sibelco N.V.
The seven-year partnership will see Sibelco offtake up to 700,000 dry metric tonnes of high-quality, ultra-low iron petalite concentrate from Prospect’s Arcadia Lithium Project in Zimbabwe.
Prospect Managing Director, Sam Hosack, is pleased to have secured a long term offtake partner.
“Sibelco is the largest distributor of ultra-low iron petalite in Europe and possibly the world and we believe that this is the largest ultra-low iron petalite offtake agreement ever signed,” Sam said.
The Arcada Lithium Project represents a globally significant hard rock lithium resource.
During the September quarter, the business confirmed the mine at the project as an ultra-low iron lithium producer – making it one of few in the world that are able to supply the premium-priced, ultra-low iron market for spodumene or petalite.
Essentially, the higher lithia and ultra-low iron oxide content that a petalite flotation product has, the higher the chance of being used in the glass and ceramics industry.
Prospect also appointed Renaissance Capital as its exclusive financial advisor for the potential sale of all or part of the assets of Arcadia or Prospect itself to Uranium One.
Uranium One is a world-leading uranium producer whom Prospect entered a memorandum of understanding (MOU) with in December 2019.
The MOU gave Uranium One the right to a 90-day exclusivity period to conduct due diligence on the lithium project and on Prospect. However, the MOU was extended multiple times.
In terms of cashflow, Prospect implemented a company-wide cost reduction program in response to Covid-19 to maintain its financial position. The board and management also agreed to a 50 per cent cut in salaries.
During the September quarter, Prospect spent around $431,000 on operating activities – most of which went towards staff and admin costs as well as corporate spending. However, the total figure is almost half the amount Prospect spent on operating activities during the June quarter.
The lithium miner received a US$10 million (roughly A$14.1 million) funding commitment from offtake partner, Sinomine as the ball mill for the Arcadia mine was installed.
At the end of Q1 FY21, Prospect had around $1.38 million in cash.
In the current quarter, Prospect has started procurement and development of a pilot plant for the Arcadia Project. It is also evaluating its Chishanya Phosphate Project, progressing discussions with Uranium One and collaborating with customers on product qualifications from the pilot plant.
Company shares are up 9.09 per cent and are trading for 12 cents at 11:32 am AEDT.
