PROSPECT RESOURCES LIMITED
The Staged OFS reflects the strong potential of Arcadia to become a compelling long life, large scale, hard rock open pit lithium mine in
Arcadia is a relatively simple and robust development, with high grades and low strip ratios enhancing financial outcomes. The Project delivers outstanding returns independent of by-product credits and the lithium price environment. The staged development pathway outlined in this Staged OFS presents a lower upfront capital hurdle, with an approach that addresses all technical, commercial and operating risks, and delivers a progressive ramp up and ability to further optimise Stage 2 (delivering 2.4 Mtpa throughput).
This study has been prepared by leading engineering consulting business,
4Mtpa development pathway, which is currently the subject of a detailed study (the Direct OFS) scheduled for completion in Q4 2021. Current engagement with a range of strategic groups under a formal partnership process (being managed by
HIGHLIGHTS
Staged Optimised Feasibility Study (Staged OFS) confirms strong technical and economic viability of Arcadia under a staged development pathway
Staged OFS completed by external study manager and leading engineering consulting firm,
Progressive construction of two 1.2 Mtpa modules delivers lower upfront capital costs, with reduced execution and market risk
Ore Reserve increase from 37.4Mt to 42.3Mt, reflecting increased pricing offset by lower metallurgical recoveries
Project economics expected to be further improved in Direct-to-2.4 Mtpa Optimised
Feasibility Study (Direct OFS), due for completion in Q4 2021
Partnership process being managed by
Prospect Managing Director,
'The OFS details our clear differentiation with a range of potential product markets, and customers versus traditional spodumene projects. Even at the smaller initial scale, the
Brief Overview
Arcadia is located in the
The Project is close to major highways and railheads. The nature and location of the
In
The Updated DFS embedded a market-driven approach in which the production and sale of premium ultra-low iron, technical grade petalite concentrate was a key driver of development strategy. This strategy fed into mine planning and in turn influenced the design of the primary petalite recovery circuit such that production of technical grade petalite was maximised.
The Arcadia Staged OFS
The capital estimate of the Staged OFS has been prepared in accordance with the Lycopodium Cost Estimating Procedures and fulfils the requirement of the AACE Class 2 Estimate ('Bankable Feasibility Estimate') with an accuracy range of +/- 12 %. The study manager is
Key Arcadia physical outcomes
A Measured, Indicated and Inferred Mineral Resource estimate for Arcadia of 72.7 million tonnes at 1.11% Li2O was published in an ASX release dated
The life-of-mine (LOM) strip ratio is approximately 3.4 (waste tonne to ore tonne). The Ore Reserve is the economically mineable part of the Measured and Indicated Resource. It includes mining dilution of 5% and allowance for losses in mining of 5%. Appropriate assessments and studies have been carried out and include consideration of modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and government factors.
Mining
The Arcadia deposit is to be mined as a conventional truck and shovel open pit operation via contract mining. Waste dumps will be located as close as possible to pit exit points to minimise haulage profiles without disrupting the access to the minable resource or crushing plant. The mining schedule developed is to suit the strategy of commencing ore treatment operations at 1.2 Mtpa and subsequently upgrading to 2.4 Mtpa after 4 years of operation. Maximum annual mining rates are just under 14Mtpa of total material (waste plus ore).
Processing
The key focus of processing strategy in the Staged OFS (and Direct OFS) process has been the further reduction of risk and the increase of certainty for Arcadia processing. The Staged OFS is based on a global lithia recovery of 51.3%, comprising assumed (spodumene recovery of 78.2% and assumed petalite recovery of 31.3%), with assumed tantalum recovery of 27.0%.
These assumptions are based on the extensive testwork undertaken to date, as well as the learnings from the pilot plant operation. Since publishing the 2019 Updated DFS, additional variability testing has been done on the 2 main ore bodies (Main Pegmatite and Lower Main Pegmatite), which constitute > 79% of the Ore body. This extensive testwork included flotation configuration changes and optimum flotation parameters under locked cycle conditions.
Locked cycle testwork is a standard process requirement to assess the consequential effects of process recycle streams on the circuit mass balance and recoveries while also serving as a conventional way to mitigate flotation circuit design risk. The study has yielded lower LOM spodumene recoveries of 78.2% compared to the previous assumption of 84.5%, utilised in the 2019 DFS. These spodumene recoveries are now more in line with peers in the global lithium industry. Opportunities do exist for further recovery optimisation before entering the detailed Engineering design phase.
Forecast average LOM production is 133kt per annum of spodumene concentrate, 86kt per annum of technical grade petalite concentrate and 21kt per annum of chemical grade petalite concentrate, with a peak of 338 kt per annum total volume.
An initial ramp-up of six months has been incorporated for the processing plant to obtain Stage 1 nameplate capacity of 1.2Mtpa and assumed recovery levels. Conventional beneficiation techniques including dense medium separation (DMS) to recover petalite, gravity-based processes to recover tantalite, and froth flotation to recover spodumene have been retained.
Key areas of later testing included the use of high pressure grinding rolls (HPGR) technology, ongoing DMS optimisation and locked cycle spodumene flotation. Testwork was carried out on Main Pegmatite (MP) and Lower Main Pegmatite (LMP) ore zones during 2019 and 2020, and the data derived from these programmes has been applied by
Two-stage crushing followed by HPGR has been selected to achieve the sub 5 mm crush size required to achieve adequate liberation of petalite for primary recovery by DMS. DMS feed preparation is based on secondary crusher product feeding HPGR crushing operating at medium pressure. Approximately 68% of plant feed will report to DMS at a bottom cut-off size (BCOS) of 0.6 mm. Primary crushing capacity will be set at 2.4 Mtpa from the outset.
The target grade for petalite products is 4% Li2O, i.e. 82% petalite. DMS testwork has demonstrated that 80% of all DMS petalite concentrates produced from Arcadia ores coarser than 1.7 mm will meet specifications for technical grade product, with Fe2O3 substantially less than 0.05%. The remaining 20% finer petalite at -1.7 mm +0.6 mm will be suitable as chemical grade product. Recoveries of petalite to Technical Grade and Chemical Grade products are expected to be 25% and 6% of plant feed petalite respectively.
The sub-millimetre spodumene grain size limits recovery of spodumene by DMS. Consequently, all ore post gravity recovery will report to the flotation circuit where spodumene is effectively recovered at a grind size P100 of 0.212 mm (P80 0.150 mm). Fatty acid flotation of spodumene is widely practised in the lithium beneficiation industry and Arcadia will be no exception in this regard. The target grade for spodumene concentrate is 6% Li2O; i.e. 75% spodumene. Based on flotation data accumulated to date, expected spodumene recovery to concentrate is about 81% for LMP ore and about 55% for MP ore. The iron content of spodumene concentrate is expected to be about 0.3% to 0.5% Fe2O3. Spodumene concentrate will be cleaned, and upgraded, by employing mica flotation at low pH followed by WHIMS to reduce iron contamination. The mica concentrate will be set aside pending potential identification of a potential commercial opportunity to realise value from this product.
Contact:
Email: shosack@prospectresources.com.au
About
About Lithium
Lithium is a soft silvery-white metal which is highly reactive and does not occur in nature in its elemental form. In nature it occurs as compounds within hard rock deposits (such as Arcadia) and salt brines. Lithium and its chemical compounds have a wide range of industrial applications resulting in numerous chemical and technical uses. Lithium has the highest electrochemical potential of all metals, a key property in its role in lithium-ion batteries
Caution Regarding Forward-Looking Information
This announcement may contain some references to forecasts, estimates, assumptions and other forward-looking statements. Although the Company believes that its expectations, estimates and forecast outcomes are based on reasonable assumptions, it can give no assurance that they will be achieved. They may be affected by a variety of variables and changes in underlying assumptions that are subject to risk factors associated with the nature of the business, which could cause actual results to differ materially from those expressed herein. All references to dollars ($) and cents in this announcement are in
Investors should make and rely upon their own enquiries before deciding to acquire or deal in the Company's securities. Prospect confirms that for the purposes of Listing Rule 5.19.2, all material assumptions underpinning the information continue to apply and have not materially changed
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