Can you provide an update on the progress of your flagship project, the Arcadia Lithium mine?

Our flagship project, the Arcadia Lithium mine, is located 35 km outside Harare. The total resource at the mine is approximately 72 million metric tons, with 26 million metric tons falling under the reserve category. The mine has a standard processing plant equipped with crushing, DMS (dense media separation), flotation, spirals, drying, and bagging capabilities. Currently, our plan is to produce 240,000 metric tons per year of petalite and spodumene concentrates, with the current production split being around 50-50 between the two minerals. We have already pre-sold 70% of phase one with our founding offtake partner and shareholder, Sinomine Group, which translates to a 1.2 million metric tons feed. We are also in negotiations with potential offtake partners for the remaining production and exploring the possibility of increasing our annual production to 2.4 million metric tons.

The electric car industry has set a new standard for lithium purity. Which are the main commercial lithium minerals used today?

The two main commercial lithium minerals used today are spodumene and petalite. Spodumene typically contains approximately 5.5 to 6% lithium, while petalite contains around 4.0 to 4.2% lithium. At Prospect Resources, we have been successfully producing lithium carbonate with a purity of more than 99.5% at a custom-made pilot plant in Zimbabwe using petalite concentrates from the Arcadia mine.

There has been speculation about the lifespan of lithium demand. What is your prediction for the upcoming years?

The predictions for future lithium demand vary, but most of them point to strong growth. For example, the Australian Government predicts that lithium carbonate equivalent demand will increase from the current 144,000 metric tons to over 1 million metric tons in the next eight years. We are witnessing strong interest in additional offtake discussions from our foreign customers. Considering the commitment of major car manufacturers to transition to predominantly electric fleets in the coming years, we have no reason to doubt these predictions.

Lithium is found in large-scale deposits in several other developing regions globally. What are the potential advantages of your project?

Our Arcadia project offers several distinct advantages. Firstly, its proximity to the capital city, Harare, provides excellent infrastructure, including roads, water, power, and housing. Being a Zimbabwean-focused African mining company listed on the ASX, we have in-depth knowledge and understanding of the jurisdiction in which we operate. Additionally, we have a highly skilled and motivated local workforce. Furthermore, we are only 460 km away from a fully operational port, connected by a recently re-paved asphalt highway, allowing for multiple trucking solutions. Our project has received all necessary permits and is shovel-ready. The lithium concentrates we produce exhibit purity levels of 99.5-99.6% lithium carbonate with minimal impurities, and we are confident in our ability to reach 99.9% purity of lithium carbonate and technical-grade lithium hydroxide if the future market demands it. We have already cleared the tailing dam site and are close to completing the mining contractors’ camp. With national project status and anticipated special economic zone status, we enjoy preferential trade concessions, control over foreign currency flows, dividend flows, and tax concessions. The government has been supportive of our significant project, recognizing its positive impact on the country and economy.

What is your vision for the company in the upcoming years?

In Zimbabwe and Southern Africa, numerous mineral resources remain unexplored due to historical challenges of political instability, sanctions, and hyperinflation. Our company is at a significant milestone as we prepare to release our Definitive Feasibility Study for the Arcadia lithium project before the end of the year. The Arcadia mine is poised to become one of the largest and most economically viable lithium mines globally, bringing positive change to the people of Zimbabwe and the national economy.

From the beginning, we faced skepticism regarding the production of lithium carbonate from petalite concentrate. However, we successfully built the pilot plant within schedule and under budget, leveraging the skills of Zimbabwean professionals. The project will inject significant foreign currency into the economy and create jobs. Currently, we are working on the Pre-Feasibility Study for the lithium hydroxide plant, which has the potential to further increase our revenue and contribute to the national economy. We see Arcadia as the first of many major mining projects for our company, aiming to become a significant regional miner. As we continue operating the Arcadia mine, we also have strategic exploration tenements and supply chain opportunities to generate long-term value for our shareholders and positively impact the communities we operate in.

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