Harare - The definitive feasibility study (DFS) into the Arcadia lithium project, in Zimbabwe, has found that the project would require a capital investment of $165-million to develop a 2.4-million-tonne-a-year operation, Prospect Resources said on Monday.

The DFS base case was double that considered in a 2017 prefeasibility study which found that an investment of $52.5-million would be required to develop a 1.2-million-tonne-a-year operation.

The ASX-listed miner said that the DFS estimated an openpit mine life of some 12 years, with life-of-mine revenues projected at $2.93-billion and life-of-mine earnings before interest, taxes, depreciation and amortisation at $1.38-billion.

The DFS estimated a pre-tax net present value of $511-million and an internal rate of return of 44% for the Arcadia project.

“The completion of the successful DFS on a base case of a 2.4-million-tonne-a-year development of the Arcadia lithium project is a great achievement. The DFS results position the company to become a key player in the global lithium market,” said Prospect MD Sam Hosack.

He said that the DFS represented a significant milestone for the company as Prospect transitioned into development.

“We are excited by the opportunity to capitalise on the strong fundamentals of the lithium market, initially through the production of lithium concentrates. Based on the mine economics and financial strength of the project, we are moving swiftly to finance, develop and commence production at Arcadia.

Hosack added that the company has now started prefeasibility work to test the viability of a lithium chemicals plant on site, in order to upgrade the Prospect product and capture additional value from the lithium supply chain.

Prospect was hoping to be completed with the project construction by the third quarter of 2020, with commissioning to take place from November that year.