- January 15, 2021
- Posted in NEWS
Prospect Resources says it will forge ahead with its Arcadia Lithium project in Zimbabwe despite the country’s risk profile and has put in place measures to minimise potential impact of the sovereign risk.
Assays carried out last year have confirmed that Arcadia has the potential to be among few lithium mines in the world to supply premium priced spodumene and petalite used in the production glass and ceramics.
Zimbabwe’s sovereign risks relate particularly to illegal sanctions by western countries and huge external debt.
These have scared off some investors which views Zimbabwe as unsafe destination for investment.
The group incoming non-executive chairman Mr Mark Wheatley said they were excited by the prospect of “high purity products” from Arcadia, and have put in place measures to insulate themselves from sovereign risk in the country of operation.
“Prospect will provide customers diversity away from Australian supply, the ability to deliver high purity products and the upside of staged development with market expansion.” “The company has also developed strategies to manage Zimbabwe sovereign risks,” he said.
Prospect acquired its now flagship Arcadia Lithium project mid-2016. The project has a anticipated annual supply of up to 100 000 dmt per annum of ultra-low iron petalite concentrate.
The Australian firm is making headway towards bringing Arcadia to full production. By the close of 2019, the group had agreed with African financier Afreximbank, for the latter to arrange and syndicate a US$143 million project finance debt facility, with the bank providing US$75 million of the facility.
Afreximbank has extensive experience with Zimbabwe, and has been extending facilities to the country despite prevailing risks.
Prospect has also signed an MoU with Uranium One Group for potential offtake and equity investment.
Prospect sees immense value being derived from the quality of Arcadia’s output.
Said managing director Mr Sam Hosack last year:
“The opportunity for Prospect Resources to produce a technical grade ultra-low iron blended product of Arcadia spodumene and petalite, has the potential to deliver a fit for purpose product for glass ceramics customers and achieve higher sales prices across Arcadia’s lithium products.
“We expect such a move should provide a positive economic uplift, compared to simply selling the Arcadia spodumene to the chemical market.”
Meanwhile Mr Wheatley says he is excited at joining Prospect Resources.
“I am delighted to join Prospect as it seeks to develop the Arcadia Lithium Project. What attracted me to Prospect is the high calibre and experience of the management team, the quality of the Arcadia asset, the exposure to European markets, off-take relationships, and supportive major shareholders,” he said.
Mr Wheatley has over 15 years of director and chairman experience with exposure predominantly across gold, copper and uranium sectors.
He has previously held non-executive chairman positions with Norton Gold Fields, Xanadu Mines and Gold One International.
Mr Wheatley has also held a number of non-executive director roles including St Barbara and was a founding director of Uranium One Inc.
He is currently a non-executive director of Ora Banda Mining and Peninsula Energy.
His experience includes growth through the financing and development of projects, and he has been instrumental in a number of successful merger and acquisition transactions.
Wheatley holds a Bachelor of Engineering (Chemical Engineering) from the University of New South Wales and a Master of Business Administration from West Virginia University.