African lithium producer, Prospect Resources Ltd, working in Zimbabwe appointed African Export-Import Bank (Afreximbank) to arrange and manage the primary syndication of a US$143 million debt facility for Arcadia Lithium Project in the outskirts of Harare; Prospect’s Managing Director Sam Hosack has revealed.
The managing director says Afreximbank is proposing to fund and hold US$75 million of the facility.
“The appointment of Afreximbank as mandated lead arranger is a critical milestone in the financing of the Arcadia lithium project.”
“The parties will now undertake further detailed due diligence and negotiate the final facility agreements. Execution of the facility agreements will be subject to Afreximbank’s further due diligence and credit approvals and drawdown will be subject to satisfaction of various conditions precedent to be included in the agreements.”
Prospect engages Afreximbank after a definitive feasibility study (DFS) update on the lithium project positioned the company as a leading lithium producer to both the chemical and technical markets. DFS describes estimates on a project’s mineral resources and ore reserve, markets, as well as the assessment of the technical and economic feasibility of the project.
Hosack said “The material upgrade to our DFS on a base case of a 2.4 Mtpa development of the Project is a significant achievement. The DFS results position the Company to secure a key role in the expanding global lithium market and validates my belief that Arcadia is Africa’s leading lithium project with respect to its scale, grade, economics and management team. These outcomes demonstrate Arcadia’s ability to rapidly payback project finance.”
“Prospect sees the 30 June 2020 half to be focused on converting its current indicative term sheet with Afreximbank, into a binding term sheet which is a catalyst for a number of potential equity partners the Company is currently in discussions with.”
The company remains of the view to seek out minimal dilution solutions to finance the Arcadia Lithium Project, and with that see the negotiations with Uranium One and other parties key to the equity portfolio of the mines finance package according to the managing director.
Afreximbank is a Pan-African multilateral financial institution to promote intra and extra trade in Africa.
The Cairo based bank once went under the spotlight as it became instrumental in the printing of Zimbabwe’s Bond notes in 2016.
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