RBZ approves PSC to increase Arcadia ownership to 87%

Prospect  Managing  Director  Sam  Hosack

African lithium developer Prospect Resources announced that the Reserve Bank of Zimbabwe (RBZ) has approved its acquisition of an additional 17% of the Arcadia Lithium Project.

Prospect will make a further announcement on completion of the transaction.

On completion, Prospect will increase its ownership in the Arcadia Lithium Project from 70% to 87%,and increase its share of future revenues and profits from the Project’s strong economics:

Pre-tax NPV1 (10% discount rate) of US$533 million

  • Life-of-mine project revenue of US$2.932 billion
  • Average annual EBITDA of US$109 million over an estimated 12-year mine life
  • Competitive C1 cost of  US$2303  per  tonne  of  concentrate  placing  Arcadia  in  the  lowest  operating cost quartile
  • Delivering a rapid payback for the project of 2.5 years from first production and an exceptionally strong IRR of 45%

Prospect’s  Managing  Director,  Sam  Hosack,  said  “This  transaction  is  value  accretive  for  Prospect’s  shareholders.  By  acquiring  Farvic’s  carried  interest  we  increase  our  share  of  revenues  without  increasing our share of costs.

“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. The Company has a number of value engineering activities currently underway that are expected to further strengthen Arcadia’s project economics.”

Source: Company Press Release