eBusiness Weekly
Kudzanai Sharara
Prospect Resources says it has a competitive advantage in the production of petalite and will leverage and ride on the stability of the glass and ceramic industry where the resource is used.
Appearing on Finance News Network recently, managing director Sam Hosack, said while the miner can produce both petalite and spodumene, it is in the latter, where it has a competitive advantage.
“Petalite, however, is really where we see our competitive advantage. Not many operations, in fact barely a handful, produce both petalite and spodumene.”
“We would like to see ourselves as unique in the sense that we are going to try and leverage the petalite space, try and establish ourselves as an emerging producer that can leverage all the upside that is offered from the glass and ceramics industry.
“The demand for the glass and ceramics market is around 30 percent of lithium consumption. In particular, in our case we have a very low iron content which attracts a premium. So we are looking to leverage that and ride the stability of the glass and ceramics industry whilst we hope to expose ourselves to the upside of the EV and energy storage sector,” said Hosack.
The Arcadia resource is a 43 million-tonne resource grading 1,41 percent lithium and it is predominantly hosted with spodumene and both lithium bearing concentrates that will produce an export.
Hosack also took time to speak on the “project economics” saying the development period for the project is 18 months.
“The return on investment or the payback period is 2,5 years from cash flow positive and it is strongly underpinned by an EBITDA, or earnings before interest and tax deductions of $106 million per year.
“In addition to the DFS highlights, this positions Prospect Resources in the lowest cash quartile both for CAPEX and in operating costs. Which alongside our diverse offtake and market presentation we feel positions us very strongly for a turbulent lithium market,” explained Hosack.
Commenting on current developments, Hosack said focus at the moment is on raising the capital requirements for the project and the development cycle.
“We are engaged with multiple parties and at multiple levels of progression. Our focus is to be ready on the point that we are fully funded to push on to development and ramp up to production.
“We have a raft of experience within our management team both in bringing small projects and large infrastructure projects online. We would like to leverage that,” he said.
He said the miner has a robust development plan and early production operational readiness.
“So for us the focus right now is to deliver on the funding requirements of the project and immediately traffic straight through the development process. And our offtake partner Sinomine Resource Group, through their subsidiary Jiangxi Dongpeng New Mineral, are the largest converters of petalite product. And therefore, we feel really confident about converting all of these strategies into a final plan,” he said.
