- Prospect Resources (PSC) is releasing the new optimised feasibility study (OFS) that uses a staged development plan to bring its Arcadia Lithium Project online
- The OFS completed by consulting firm Lycopodium finds that progressive construction of two 1.2 million tonnes per annum modules delivers lower upfront costs and less risk
- It argues Arcadia will generate post-tax net cashflow of US$1.468 billion (A$2.03 billion) with a pre-tax internal rate of return of 35 per cent
- The next OFS looking at the direct development pathway will soon be released, and the company says it expects this study to deliver even better economics
- Shares in PSC are trading down 15.2 per cent at 33.5 cents each at 11:48 am AEDT
Prospect Resources (PSC) is releasing the new optimised feasibility study (OFS) for its Arcadia Lithium Project in Zimbabwe.
The OFS was created by engineering consultancy firm Lycopodium and uses a staged development plan to bring PSC’s 87 per cent owned project online.
Under this plan, the company would carry out progressive construction of two 1.2 million tonnes per annum throughput, which is expected to deliver lower upfront costs and less risk.
This model attracts a pre-production capital expenditure (CAPEX) of US$212 million (A$290 million) across the entire 20-year life of mine (LOM).
It also attracts a sustaining CAPEX of US$40 million (A$54.8 million), but could generate a post-tax net cashflow of US$1.468 billion (A$2.03 billion).
The staged pathway plan would deliver a pre-tax internal rate of return of 35 per cent as well as average post-tax earnings of US$97 million (A$132.8 million) over the LOM.
Additionally, the OFS increased Arcadia’s ore reserve from 37.4 million tonnes (Mt) to 42.3Mt on the back of increased pricing offset by lower metallurgical recoveries.
Prospect Managing Director Sam Hosack welcomed today’s study, but said he believed the next OFS looking at a direct development pathway would deliver even-better economics.
“It is very pleasing to have a viable alternate to the direct development pathway now validated by the Staged OFS undertaken by Lycopodium,” Mr Hosack said.
“This study confirms Arcadia as one of the only independent, shovel-ready projects globally without offtake totally locked up.
“It highlights that Arcadia is one of the world’s premier hard rock lithium assets, with outstanding projected returns under a more conservative development pathway.
“With strong lithium market conditions, and with renewed interest from potential partners, we are now completing the work on the direct OFS pathway case before funding decisions are made.”
Under the next OFS, the company will consider the economics of a direct-to-2.4 Mtpa model for Arcadia, with the study to be completed next month.
Shares in PSC were trading down 15.2 per cent at 33.5 cents each at 11:48 am AEDT.