Prospect courts European firms 

Source: Prospect courts European firms | The Herald 15 JAN, 2020

Prospect courts European firms

 Ndakaziva Majaka, Business Reporter

Australian Securities Exchange (ASX) – listed lithium company, Prospect Resources (Prospect) says it is in discussions with various European-based ceramic manufacturers for off-take agreements, amid indications its iron petalite product from its Arcadia Lithium Project has cruised through initial vetting at one of the firms.

Ultra-low iron petalite is mainly used in ceramics, glass, enamel, paint, and metallurgical industry to improve the strength, density, acid resistance and heat resistance of ceramic products, and also reduces the water absorption rate and linear shrinkage.

Prospect – which anticipates to become one of only two mines in the world capable of producing ultra-low iron petalite – announced its product had cruised through the secondary qualification process with one of the world’s largest glass-ceramic manufacturers.

If the iron petalite makes it past all the stages, it means a Zimbabwean company will soon start exporting the product for ceramic production in Europe.

Confirming the development, a local representative said talks abroad for various off-take agreements were progressing well.

“We have been and are still talking to other manufacturers and have submitted samples to them for testing at their facilities. I am, however, not at liberty to disclose the name of manufacturer suffice to say they are Europe-based,” the Prospect representative said.

The company provided the manufacturer with a sample for larger scale laboratory testing and analysis.

The outcome from their analysis is that the ultra-low iron petalite surpasses the glass ceramic market’s stringent ultra-low iron and alkali technical specifications.

To pass the final step in the product qualification process, the ultra-low iron petalite product needs a full test in the production kiln, expected to be undertaken during the course of this year, once the pilot plant is constructed and larger volume of product is available.

The demand for lithium is expected to be robust driven by the battery industry as well as applications in the glass and ceramics industry.

Prospect has a competitive advantage in producing ultra-low-iron lithium concentrates that meet the glass and ceramics industry specifications, thus, enabling it to command premium prices in this space.

Its ability to consistently produce approximately 100 000tpa of ultra-low iron petalite product, over its 15,5 year life-of-mine, is a key attraction from customers.

This comes as Prospect’s Managing Director Sam Hosack said the firm
was pinning its hopes on a 2022 commissioning on the back of a US$143 million debt facility for project financing from Afreximbank.

Hosack told Pitt Street Research that the Arcadia project had considerable advantages as a lithium source, most notably its favourable mineralogy and support from the Zimbabwean Government.

“We have received great support from the Government with the latest being the fact that we are the first mining company in the country to be granted the status of a Special Economic Zone. This makes business very manageable,” the Prospect boss said.

Prospect’s improved project dynamics and latest funding arrangements, including, potentially, with Uranium One, has further de-risked the project and is expected to drive favourable sentiment and re-rate the stock.

On November 20, 2019, Prospect announced a significant increase in the ore reserve estimate at its flagship Arcadia lithium project.

The upgraded ore reserve represented a 39 percent increase when compared with the ore reserve estimate in December 2017.

The increased ore reserve and mine life estimate have led to an optimised definitive feasibility study (DFS) to reflect the revised project economics.

On December 12, 2019, Prospect released the outcomes of its latest DFS, which was superior to the results of the DFS conducted in November 2018.