PERTH (miningweekly.com) – Lithium and gold-focused Prospect Resources has inked a conditional placement and framework agreement with Hong Kong-based Sinomine Resources Exploration to fully fund the construction of the Arcadia lithium project, in Zimbabwe.
Prospect on Friday reported that Sinomine would invest A$10-million through a share placement, priced at 5c a share, and has also agreed to an offtake agreement at the Arcadia mine for 390 000 t of spodumene concentrate and more than one-million tonnes of petalite concentrate over a proposed seven-year offtake period.
The two companies have also agreed on indicative terms for a facility agreement and a build and transfer contract under which Sinomine would construct, build and commission the mine, tailings facilities, plant and equipment, as well as all associated infrastructure.
Prospect will take ownership of the plant once the mine and plant have achieved three months of annualised production rates.
Furthermore, the two companies would commission Beijing General Research Institute of Mining & Metallurgy to prepare a definitive feasibility study on the Arcadia project, within three months.
Prospect is hoping to have the Arcadia lithium project in production within 12 months of breaking ground.
“The transaction will fully fund the building of Prospect’s lithium mine and plant at the Arcadia lithium project through to full production,” said Prospect chairperson Hugh Warner.
“This deal is the culmination of close to a year’s work. During this time, we have developed a close relationship with Sinomine and we like their style and commitment to both the project and the Prospect team.”
A scoping study into the Arcadia project established a mineral resource estimate of 23.4-million tonnes, at 1.42% lithium oxide and 123 parts per million tantalum pentoxide, which could support a potential mine life of between 15 to 25 years.
Last week, Prospect announced that it had produced battery grade lithium carbonate, with a purity 99.5%, in the company’s custom laboratory in the town of Kwekwe. Prospect said it believed this was the first time battery-grade lithium carbonate had been produced in Zimbabwe, or anywhere else in Southern Africa.