Slide 1: Arcadia Lithium Project Updated Definitive Feasibility Study
Arcadia Lithium Project Updated Definitive Feasibility Study 12 December 2019 ASX: PSC I FRA:5E8
Slide 2: Disclaimer
Disclaimer Caution Regarding Forward Looking Information The information contained in this presentation or subsequently provided to any recipient of this presentation whether orally or in writing by or on behalf of Prospect Resources Ltd (“Prospect Resources or the Company”) or its respective employ
Slide 3: Company Overview: Leading Africa in the battery minerals revolution
Company Overview Leading Africa in the battery minerals revolution + Listed on the Australian (ASX: PSC) and Frankfurt (FRA: 5E8) exchanges Strategically Focused + Battery minerals company with a focus on lithium in and around Zimbabwe + Flagship project is the 87%1 owned Arcadia Lithium Project loc
Slide 4: Arcadia, a game changing lithium project
Arcadia Lithium Project Arcadia, a game changing lithium project • 7th largest global hard rock lithium asset • Fully permitted to commence production • Strong project economics to drive returns for shareholders • Diversified markets across Europe, North America and North Asia • Close proximity to a
Slide 5: Arcadia Lithium Project: Updated DFS
Arcadia Lithium Project: Updated DFS
Slide 6: Updated DFS: Highlights
DFS Highlights Updated DFS: Highlights • Average Annual EBITDA (First 5 years) US$168M Significantly improved Page 7 • CAPEX US$162M, including EPCM cost provision & 14% contingency1 project economics • Pre-tax NPV10 US$710M2 • 7th Largest Global Hard Rock Lithium Asset Optimised reserve estimate •
Slide 7: Significantly Improved Project Economics
Significantly Improved Proj ect Economics A tier one project delivering strong returns Annual EBITDA ( First 5 Years) Updated DFS Nov 20191 Change2 5 years average 250 Average Annual 195 200 177 181 EBITDA (first 5 years) 99% increase 161 168 US$168M (Previously US$84M) 150 127 US$M 100 CAPEX 2% dec
Slide 8: Strong cashflow delivering rapid payback
Significantly Improved Proj ect Economics Strong cashflow delivering rapid payback 36 Months US$M Revenue and Net Cashflow (After Tax) 400 1600 36 Months 1400 Annual Revenue & Net Cashflow US$M 300 18 Months Cumulative Net Cashflow US$M 1200 200 1000 800 100 600 0 400 Production Commence 200 -100 0
Slide 9: Robust project economics – conservative assumptions
Significantly Improved Proj ect Economics Robust project economics – conservative assumptions US$710M NPV10 (pre-tax) Base Case Lithium concentrate base case price (-/+20%) 401 1,019 Operating cost base case (+/- 20%) 563 857 Lithium recovery base case (-/+ 10%) 581 840 Capital cost base case (+/- 1
Slide 10: Consistent, long life supply with high margin
Significantly Improved Proj ect Economics Consistent, long life supply with high margin 400,000 1,200 350,000 961 1,000 904 300,000 860 Life of Mine operating costs: Revenue & Operating Cost (US$/t) 845 769 Spodumene US$268/t 758 800 250,000 748 Petalite Low Iron US$428/t Petalite Ultra-Low Iron US$
Slide 11: Staged open pits, large scale production
Optimised Ore Reserve Estimate and Extended Life of Mine Staged open pits, large scale production Ore Reserve Nov 2019 Contained Ta2O5 Category Tonnes (Mt) Li2O (%) Ta2O5 (ppm) Li2O (kt) (Mlbs) Proved 11.3 1.28% 114 144 2.8 Probable 26.1 1.20% 124 314 7.2 TOTAL 37.4 1.22% 121 457 10.0 • Ore Reserve
Slide 12: Conventional mining & processing techniques
Optimised Ore Reserve Estimate and Extended Life of Mine Conventional mining & processing techniques Processing Flow Global lithium recoveries 55.2% with conservative assumptions Petalite (Dense Media Separation) 1 Average production of 122,000 tonnes p.a. Open Pit ROM Ore Feed Crushing Stockpile HP
Slide 13: Without further project financing, the market is in deficit by 2021
Exceptional Growth Opportunities Without further project financing, the market is in deficit by 2021 Million LCE tonnes Shortage of long term supply1 4.0 • Existing operational supply EV achieves ICE cost parity 3 only in place to meet demand 3.5 Arcadia’s targeted commencement of operation to 2021
Slide 14: Arcadia's products penetrate 100% of lithium end users
Exceptional Growth Opportunities Arcadia’s products penetrate 100% of lithium end users Expected average Price ratio relationship 2 Lithium Market End Users1 Products 17% • Technical grade Petalite Ultra-low Iron has a 61% price premium Glass Petalite 1.61 over chemical grade 6% Li2O spodumene & Cer
Slide 15: Continuity and security of supply to a 'supply constrained' market
Exceptional Growth Opportunities Continuity and security of supply to a ‘supply constrained’ market Chemical Grade Ultra-Low Iron Spodumene & Petalite Petalite (Technical Grade) Ultra-Low Iron Petalite Chemical Versus Carbonate as feedstock • One of two ultra-low iron Converter petalite suppliers in
Slide 16: Path forward to becoming a lithium industry leader
Africa’s most advanced lithium project Path forward to becoming a lithium industry leader Financial Close I Updated DFS Nov 2019 I 16
Slide 17: Contact Us
Media info@prospectresources.com.au CONTACT US Investors & Customers Nick Rathjen General Manager, Corporate Affairs Email: nrathjen@prospectresources.com.au www.prospectresources.com.au 17
Slide 18: Appendix
APPENDIX
Slide 19: Project parameters and assumptions
Project parameters and assumptions Appendix 1 Mining and Production Cost Assumptions (US$/t) Processing Plant Size 2.4Mtpa Mining 97 Ore Reserve 37.4Mt Processing (inclusive crushing) 136 - Li2O grade (diluted) 1.22% - Ta2O5 grade (diluted) 121ppm General administration and selling costs 32 Life of
Slide 20: LoM Financials and Capital Expenditure
Appendix 2 LoM Financials and Capital Expenditure Life of Mine Financials Capital Cost Summary (US$ Thousands) Average Annual Free Cash Flow from Operations (post-tax) US$101M Mine Development Cost (Sub Total) 4 816 Process Plan (Sub Total) 117 715 Average first 5 years Annual Free Cashflow from ope
Slide 21: Pricing assumptions
Appendix 3 Pricing assumptions 16,000 1,600 Assumed long term incentive price for lithium carbonate: 1,400 US$12,0001 Concentrate Price US$/T FOB 12,000 1,200 Carbonate Price US$/T CIF) 1,000 8,000 800 600 4,000 400 200 - - 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2
Slide 22: Mineral resource estimate
Mineral resource estimate Appendix 4 Arcadia High Grade JORC Mineral Resource Statement- 1% Li2O Cut-off1 Category Tonnes Li2O % Ta2O5 ppm Li2O Tonnes Ta2O5 Mlbs Measured 10,200,000 1.45% 132 148,100 3.0 Indicated 27,200,000 1.39% 119 378,400 7.1 Inferred 5,800,000 1.45% 97 84,000 1.2 GRAND TOTAL 43
Slide 23: Corporate summary
Appendix 5 Corporate summary ASX Code PSC Top Shareholders3 % FRA Code 5E8 Citicorp Nominees 11.33 Lord of Seven Hills Holdings FZE 10.98 Shares Outstanding1 235.95m Sinomine International Exploration 7.06 MBM Capital Partners 5.99 Market Capitalisation A$26m BNP Paribas Nominees 4.62 Armoured Fox C
Slide 24: Board of directors with lithium market and project experience
Board of directors with lithium market and project experience Appendix 6 Hugh Warner Sam Hosack Zed Rusike Executive Chairman Managing Director Non-Executive Director A third generation A qualified accountant and A capital markets resident of Zimbabwe. Zimbabwean with over 15 professional with 25+ y
Slide 25: Board of directors with lithium market and project experience
Appendix 7 Board of directors with lithium market and project experience Chris Hilbrands Mike Kitney Roger Tyler Consultant, Metallurgy, Geologist Chief Financial Officer Process Design Mr Tyler has worked for over Mr Hilbrands has worked as Mr Kitney is a practising 33 years’ as a geologist and Chi
Slide 26: Zimbabwe: an established and ambitious mining jurisdiction
Zimbabwe: an established and ambitious mining jurisdiction Appendix 8 • A vast mineral wealth with a long and rich history in mineral exploration and mining with active projects in coal, diamonds, gold, lithium, nickel, PGM and wolframite1 • In 2018, Zimbabwe’s mining sector contributed 60% of the c
Slide 27: Progressed from discoveries to an updated DFS under a 3 years period
Appendix 9 Progressed from discoveries to an updated DFS under a 3 years period Establishment Exploration Development 2016 2017 2018 2019 • Prospect acquires a • PFS – Arcadia Lithium project • Offtake with Sinomine signed • Updated DFS confirming a 2.4Mtpa 70% interest in Arcadia announced base cas
Slide 28: DFS delivery team
DFS delivery team Appendix 10 Resource Definition Roger Tyler MEng (Mineral Resource Evaluation), BSc (Mining Geology), MAusIMM, MSAIMM, ARSM, SACNASP (PLZ) Resource Modelling Ms. Gayle Hanssen BSc Geology (Natal), SACNASP of DMS, Zimbabwe Project Geologist Adam Moodley BSc(Hons), MSc (CT) (PLZ) Geo
Slide 29: Leading Africa in the Battery Mineral Revolution
Leading Africa in the Battery Mineral Revolution