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