PERTH (miningweekly.com) – The direct optimised feasibility study (OFS) into the Arcadia lithium project, in Zimbabwe, has confirmed the project’s technical viability under a single-staged development pathway to 2.4-million tonnes a year.

ASX-listed Prospect Resources on Tuesday told shareholders that the direct OFS had decreased the capital expenditure for the project to $192-million, compared with the $212-million considered in the staged OFS completed earlier this year.

The staged OFS considered the construction of two 1.2-million tonne a year modules, with the Stage 1 operation to require a capital investment of $140-million and the Stage 2 operation a further $72-million capital spend.

The direct OFS has also increased the average spodumene production to 147 000 t/y, up from 133 000 t/y considered in the staged OFS, while technical petalite production increased from 86 000 t/y to 94 000 t/y and chemical petalite from 22 000 t/y to 24 000 t/y.

The project’s initial mine life has decreased slightly from 20 years to just over 18 years.

Meanwhile, the direct OFS has increased the project’s post-tax net present value from $408-million to $929-million, and its internal rate of return from 34% to 60%, while average earnings before interest, tax, depreciation and amortisation increased from $97-million to $175-million.

“While the staged OFS presented a strong development case for Arcadia with a lower upfront capital requirement, the single-stage build to 2.4-million tonne a year was always expected to be more compelling in terms of capital and economic efficiencies. This expectation has been resoundingly validated by the outcomes of the direct OFS,” said Prospect MD Sam Hosack.

“The direct OFS further enhances Arcadia’s positioning as one of the world’s premier hard rock lithium assets, with outstanding projected returns under a range of lithium price scenarios. It builds on the detailed technical assessments undertaken as part of the 2019 definitive feasibility study and staged OFS in outlining a robust and highly attractive mine development case for Arcadia.”

“As one of the only independent, shovel-ready projects globally without offtake totally locked up, it is unsurprising that interest in the current Arcadia strategic partnership process being undertaken by Prospect is strong.”

Prospect is currently reviewing funding options for Arcadia.