Prospect not concerned about Zim sovereign risk
WITH very few mines in the world able to supply the premium priced, ultra-low iron, technical market for spodumene or petalite, Prospect Resources is keen on the Arcadia Lithium project, and has put in place measures to minimise any impact from Zimbabwe’s sovereign risk.
Assays carried out last year have confirmed that Arcadia has the potential to be the only lithium mine in the world able to supply both spodumene and petalite to the premium glass and ceramics market.
Zimbabwe’s sovereign risks relate particularly to the international sanctions that it is under, an inflationary environment, policy changes, and external debt overhang.
These issues have scared off some international investors. But not Australian mining firm, Prospect Resources.
The group’s incoming non-executive chairman Mark Wheatley said they are enthused 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,” he said.
“The company has also developed strategies to manage Zimbabwe sovereign risks.”
Prospect acquired its now flagship Arcadia Lithium project mid2016. 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 perceived risks.
Prospect has also signed an MoU with Uranium One Group for potential off-take and equity investment.
Prospect sees immense value being derived from the quality of Arcadia’s output.
Said managing director 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 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.
Mark 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.
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.