Source: Prospect records $4m loss | Daily News
PROSPECT Resources (Prospect) says it reported a loss after tax of $4,135 million during the half year ended December 31, 2018 compared to a $2,640 million recorded in previous period.
The Australia Stock Exchange-listed firm said explorations costs at its flagship Arcadia Lithium Project weighed further on the operating performance.
“The loss after adjustment for exploration and evaluation expenditure, impairments, project generation and share-based payments has increased from the prior year period as the group progresses the Arcadia Project and prepares for the next stage, being its development,” Prospect said.
Exploration and development stages of mining operations require heavy capital outflows before positive cash flows are realised.
Revenue from continuing operations increased to $3,534 million during the review period compared to $1,590 million achieved in previous comparable period. The group’s assets increased to $30,364 million during the half year ended December 31, 2018 compared to $30,250 million recorded in prior comparable period.
Prospect said net cash outflows from operating and investing activities amounted to $8,915 million during the review period compared to $5,078 million achieved in previous comparable period.
“As at reporting date, the group had cash and cash equivalents of $8,067 million. These conditions indicate a material uncertainty that may cast significant doubt about the group’s and the company’s ability to continue as going concerns,” the miner said.
Prospect also noted that assets and liabilities affected by the Monetary Policy Statement include cash and cash equivalent, trade and other receivables and trade and other payables.
The firm said however, financial impact of this change has not been recognised in the groups accounts at December 31, 2018.
Recently, Prospect said it has acquired new technological equipment, high pressure grinding rolls (HPGR), which will reduce capital expenditure by $2,3 million at Arcadia.
The lithium miner has also been awarded special economic zone (Sez) status at Arcadia, which will grant the project generous tax breaks and other concessions. The junior miner, which applied for the status last year in November, said
the incentives and benefits to be received from the Sez status, reinforces the financial outcomes of the project outlined in the definitive feasibility study.
Arcadia is Africa’s second-largest undeveloped lithium project. It is estimated to contain 610 500 tonnes of lithium oxide and 11,3 million pounds of tantalite pentoxide. It has an ore reserve of 26,9 million tonnes and has received its mining licence and environmental impact approval.
This comes as lithium has gained global prominence as the most valuable mineral for the future given its use in a number of areas including medicines and ceramics, but more importantly manufacture of electric vehicle batteries.
Government granted Prospect a mining lease for 57 claims in the country. The junior miner has committed millions in Zimbabwe’s lithium mining sector in the past year and is currently developing the assets.
Last year, the miner said it will start exploration of rare earth elements (REEs) at its Chishanya carbonatite project in Dorowa, in eastern Zimbabwe.
Prospect, which has impaired costs incurred on the Prestwood and Sally Mines, also operates Penhalonga Gold Mine, Sally Gold Mine and Prestwood Gold Mine in Gwanda.
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