PERTH (miningweekly.com) – The Reserve Bank of Zimbabwe has approved ASX-listed Prospect Resources’ acquisition of an additional 17% interest in the Arcadia lithium project.
The transaction would increase Prospect’s stake in the project from 70% to 87%.
Under the terms of an agreement struck in October last year, Prospect would acquire the additional interest from Farvic Consolidated Mines in exchange for 94.97-million of its own fully paid ordinary shares, and A$1.18-million in cash.
“This transaction is value accretive for Prospect’s shareholders. By acquiring Farvic’s carried interest we increase our share of revenue without increasing our share of costs,” said Prospect MD Sam Hosack.
“Prospect is progressing discussions with multiple potential financiers at a rapid pace and the company is focused on progressing Arcadia and this transaction facilitates those discussions.”
Hosack said that Prospect also has a number of value engineering activities currently under way, that are expected to further strengthen Arcadia’s project economics.
A 2017 prefeasibility study estimated that the project could produce 75 000 t/y of spodumeme concentrate, ramping up to 123 000 t/y, 155 000 t/y of petalite concentrates and 88 000 t/y of tantalite concentrates over the life of the mine.
The project is estimated to have a pre-tax net present value of $533-million and a life-of-mine project revenue of some $2.93-billion, with average annual earnings before interest, taxes, depreciation and amortization of $109-million over an estimated 12-year mine life.