Arcadia Lithium owner posts US$3,7m loss

AUSTRALIA Stock Exchange-listed lithium producer, Prospect Resources, which is developing Arcadia Lithium Mine near Harare, recorded a loss after tax of US$3,7 million during the year ended June 30, 2021, the firm said yesterday.

Prospect said this figure represented a 19% improvement after registering a loss of US$4,6 million during the same period last year.

Arcadia is the firm’s flagship operation.

Prospect managing director Sam Hosack said in the firm’s 2021 annual report that after allowing for ad hoc expenses of US$328 000 for share-based payments and US$823 000 for the impairment of mine properties, the loss after tax declined to US$2,6 million.

“This US$2 013 000 reduction in loss from the prior year is driven by the reduced development cost expenses, together with savings on employee and administration expenses,” he said.

“The result reflects a concerted effort by the company to conserve funds but also advance the development prospects of its flagship asset, Arcadia with a view to developing a clear pathway to production,” Hosack said.

Arcadia early this year exported its first lithium samples as it inched closer to full-scale production.

This will make it the first Zimbabwean mine to sell lithium on the international markets, with several other producers set to enter the market in the coming years.

Prior to year-end, the group entered into a conditional agreement to acquire a further 17% in Arcadia from Farvic Consolidated Mines Pvt Ltd, increasing its ownership from 70% to 87% and consolidating its ambition to expand on the domestic market.

The agreement was completed on July 22, 2021, and the group paid US$1,2 million on that date.

The shares issued to Farvic are subject to a voluntary escrow, with 25% of the shares set to be released every six months.

Again, the group reported that Luzich Resources (Africa) LLC, an affiliate of Luzich Partners LLC (“Luzich”), executed an option agreement to buy 100% of its Penhalonga gold project.

During the year Luzich paid US$250 000 in non-refundable deposits towards the potential exercise of the option agreement which is for a total consideration of US$1 million.

This option was executed and conclusion of the agreement is to occur after payment of the remaining US$750 000.

Prospect is one of four key lithium developers that have taken an interest in the country’s resource.

Development has been boosted by a boom on the international market where lithium has gained significance in the production of batteries for the auto industry.

Most of the demand has come from Chinese markets.-newsday.co.zw