Covid-19 slows down Prospect, Afreximbank talks
AUSTRALIAN Stock-Exchange-listed lithium and battery minerals company, Prospect Resources says the outbreak of the Covid-19 pandemic had slowed down talks with the African Export-Import Bank (Afreximbank) to raise and manage a US$143 million project finance debt facility for Arcadia mine.
Last year, Prospect and the Afreximbank signed an agreement to raise and manage a US$143 million project finance debt facility for Zimbabwe’s Arcadia lithium mine and to fund and hold US$75 million of the arrangement to fund development.
In a letter to shareholders, Sam Hosack, Prospect managing director said that Zimbabwe’s Arcadia lithium mine talks with Afreximbank for debt finance for the Arcadia lithium project were progressing at a slow pace, worsened by the global pandemic.
“On December 17, 2019, we signed a mandate with Afreximbank to arrange the debt finance for Arcadia. This process is progressing at a frustratingly slow pace which has been exacerbated by the global finance upheavals caused by Covid-19. As the world gets back to normal, we expect that progress with Afreximbank will accelerate,” Hosack said.
Prospect Resources is developing the lithium project on the out-skirts of Harare and has secured the Special Economic Zone status, which enables Prospect to transact, operate and trade in foreign currency and to retain those funds offshore.
Hoascak, also assured shareholders that the Arcadia asset still remains the largest undeveloped lithium deposit in the world.
“I think it is worth reminding shareholders of what we have at Arcadia because whilst global markets have dropped, the Arcadia asset has not changed, and it is still one of the largest undeveloped lithium deposits in the world.
Arcadia is in a unique position, as it is the only lithium asset that will produce both low iron spodumene for the electric vehicle market and ultra-low iron petalite lithium concentrates for the glass and ceramics markets. Prospect is expected to be the largest ultra-low iron petalite producer in the world,” he said.
According to Prospect Resources, the strategic race by nations to secure battery metals is a continuing theme in 2020, and continues unabated during the covid-19 lock-down, Prospect is at the forefront of this in Africa.
“Reaffirming this in December 2019, we signed a MoU with Uranium One (Russian company), providing them exclusivity through to August 10, 2020 to allow them to complete due diligence a view to potentially enter into an off-take agreement for at least 51 percent of Arcadia’s future lithium production, and an equity investment in Prospector its subsidiaries.”
Russia lacks any substantial lithium reserves but remains committed to building a renewable energy supply chain with Uranium One mandated to manage this clean energy portfolio.
“This has firmly placed Arcadia on the map, as Uranium One conduct a global search to strategically secure supply of lithium and other battery metals. To Russia, Arcadia represents a potential cornerstone asset to build out a battery supply chain and EV ecosystem,” Hosack added.