PROSPECT RESOURCES LIMITED — Investor Presentation 2021

Aug 11, 2021

12 August 2021 ASX.PSC FRA.5E8

XX November 2018 Investor Presentation

Prospect Resources Ltd (ASX: PSC, FRA:5E8) ("Prospect" or "the Company") is pleased to advise shareholders and investors that the Company will be presenting as part of the free Broker Briefing Mining & Resources Investor Webinar on Thursday 12 August 2021.

Date: 12 August 2021

Time: 11:30am AEST / 9:30am AWST

Presenter: Managing Director, Sam Hosack presenting at 11:30am AEST / 9:30am AWST

The Company invites shareholders, investors, and media to participate in this digital event by registering online via the link below:

https://zoom.us/webinar/register/4416284718745/WN\_HKI2YMKeTK2AhHmL72yWsQ

Participants will be able to submit questions via the panel throughout the presentation, however, we encourage shareholders and investors to send through questions via email beforehand to info@brokerbriefing.com

This release was authorised by the Sam Hosack, Managing Director of Prospect Resources Ltd.

*ENDS*

For further information, please contact: Nicholas Rathjen Head of Corporate Development nrathjen@prospectresources.com.au

About Prospect Resources Limited (ASX:PSC, FRA:5E8)

Prospect Resources Limited (ASX:PSC, FRA:5E8) is an ASX listed lithium company based in Perth with operations in Zimbabwe. Prospect's flagship project is the Arcadia Lithium Project located on the outskirts of Harare in Zimbabwe. The Arcadia Lithium Project represents a globally significant hard rock lithium resource and is being rapidly developed by Prospect's experienced team, focusing on near term production of high purity petalite and spodumene concentrates. Arcadia is one of the most advanced lithium projects globally, with a Definitive Feasibility Study, Offtake Partners secured and a clear pathway to production.

Prospect Resources Limited | ACN 124 354 329 | W: prospectresources.com.au

Level 2, 33 Richardson Street. West Perth WA 6005 | Email: info@prospectresources.com.au

12 August 2021 ASX.PSC FRA.5E8

About Lithium

Lithium is a soft silvery-white metal which is highly reactive and does not occur in nature in its elemental form. In nature it occurs as compounds within hard rock deposits (such as Arcadia) and salt brines. Lithium and its chemical compounds have a wide range of industrial applications resulting in numerous chemical and technical uses. Lithium has the highest electrochemical potential of all metals, a key property in its role in lithium-ion batteries.

PROSPECT RESOURCES LOW-COST, HIGH-PURITY LITHIUM

August 2021

ASX:PSC | FRA:5E8

Important notices

Caution Regarding Forward Looking Information

The information contained in this presentation or subsequently provided to any recipient of this presentation whether orally or in writing by or on behalf of Prospect Resources Ltd ("Prospect Resources or the Company") or its respective employees, agents or consultants (Information) is provided to the recipients on the terms and conditions set out in this notice. The purpose of this presentation is to provide recipients with information relating to Prospect Resources. This presentation has been prepared by Prospect Resources and each recipient must make his/her own independent assessment and investigation of Prospect Resources and its business and assets and should not rely on any statement or the adequacy and accuracy of any information.

Prospect Resources makes no representation or warranty (either expressed or implied) as to the accuracy, reliability or completeness of the Information. Prospect Resources and its directors, employees, agents and consultants shall have no liability (including liability to any person by reason of negligence or negligent misstatement) for any statements, opinions, information or matters (express or im excluded.

This presentation contains references to certain intentions, expectations and plans of Prospect Resources. These intentions, expectations and plans may or may not be achieved. They are based on certain assumptions which may not be met or on which views may differ. The performance and operation of Prospect Resources may be influenced by a number of factors, many of which are outside the control of Prospect Resources. No representation or warranty, express or implied, is made by Prospect Resources or its respective directors, employees, officers, agents, consultants or advisers that intentions, expectations or plans will be achieved either totally or partially or that any particular rate of return will be achieved.

This presentation does not constitute in any way an offer or invitation to subscribe for securities in Prospect Resources pursuant to the Corporations Act 2001 (Cth).

Prospect confirms that for the purposes of Listing Rule 5.19.2, all material assumptions underpinning the information continue to apply and have not materially changed.

Competent Person's Statements

The Company confirms it is not aware of any new information or data that materially affects the information included in the Arcadia Mineral Resource Estimate and that all material assumptions and technical parameters underpinning the estimate continue to apply and have not materially changed when referring to its resource announcement made on 25 October 2017.

The Company confirms it is not aware of any new information or data that materially affects the information included in the Arcadia Ore Reserve Estimate and that all material assumptions and technical parameters underpinning the estimate continue to apply and have not materially changed when referring to its reserve announcement made on 20 November 2019.

Prospect at a glance

Low-cost, high-quality emerging Li player

• Fully permitted, world-class Arcadia Lithium Project in southern Africa
• Low-cost, high-purity lithium products with established offtake into European and Asian markets
• $\overline{3}$

$\overline{\mathbf{1}}$

$\overline{2}$

Clear pathway to production with optionality for low-capital modular development strategy or efficient direct pathway to 2.4mpta

Pilot plant construction completed on-time and within budget, to deliver technical grade bulk samples for market qualification

rospect Resources

Dual-track Optimised Feasibility Study scheduled for 3Q CY2021 with funding initiatives underway

Capital structure
Market listings	ASX: PSC FRA: 5E8
Shares on issue (basic) Shares on issue (fully diluted)	383.5 M 424.3 M
Share price (11 August 2021)	A\$0.36
Market capitalisation	A\$142 M
Cash (30 June 2021)	A\$7.9 M

Top shareholders	%
Lord of the Seven Hills Holding FZE	98
Sinomine International Exploration	56

Lithium market momentum EV adoption accelerating

• EV adoption still in its infancy, though gathering momentum
• Asian and European markets leading the way
• Europe set to become largest EV market in 2021
• Near-term market balance tightening with longer-term supply deficits emerging

Resources

• Substantial increases in pricing incentivising of new supply

Consumer battery $\blacksquare$ EV battery

Source: Bloomberg, Macquarie Research, April 2021

The world-class Arcadia Project
Africa's most advanced lithium development

• $\checkmark$ Completion of Farvic transaction increases Prospects equity stake of Arcadia to 87%
• $\checkmark$ Close proximity and access to skilled labour force and requisite infrastructure
• ► Special Economic Zone accreditation provides significant financial and logistical advantages
• Definitive Feasibility Study completed in December 2019 $\checkmark$
• Fully permitted to commence production $\checkmark$
• Pilot Plant constructed on-schedule and within budget $\checkmark$
• Optimised Feasibility Study completion scheduled for 3Q CY2021 $\checkmark$
• Advanced status delivers highly strategic asset and near term supply in strong market conditions

High-value resource advantage Conventional mining and processing

• Globally large scale resource of 72.7 Mt @ 1.11% LiO₂ + 119 ppm Ta₂O₅¹
• Top quartile Ore Reserve grade of $+1.2\%$ LiO₂¹ $\mathcal{L}_{\mathcal{A}}$
• High proportion of high-value in-situ petalite at Arcadia $\blacksquare$
• High relative confidence classification of existing Mineral Resource and Ore Reserve; strong geological de-risking
• Open pit, near surface mining; lowest quartile strip ratio of 3.2:1
• Extensive metallurgical testwork delivering high certainty results $\blacksquare$
• Dense Media Separation (DMS) and flotation flowsheet $\mathcal{L}_{\mathcal{A}}$
• High-purity petalite and spodumene lithium concentrate products $\mathcal{L}_{\mathcal{A}}$

1. For full details of Arcadia Project Mineral Resource and Ore Reserve estimates refer to Appendix A.

Zimbabwe on the rise Foreign investment set to return

• Significant positive momentum over the last 12 months
• Sharply lower inflation and relative currency stability $\equiv$
• Government/monetary transparency and policy stability
• Mining is a key sector to the Government's 2030 vision; high $\blacksquare$ significance of Arcadia Project to FDI and domestic economy
• Over 100 years of mining history / pedigree and the 5th largest $\blacksquare$ producer of lithium in the world; 2^nd largest producer of platinum and largest producer of chrome
• Major companies currently active in Zimbabwe include: Caledonia $\blacksquare$ Mining (NYSE: CMCL), Implats (JSE: IMP), Zimplats (ASX: ZIM), Sibanye Stillwater (JSE: SSW), Anglo American (LSE: ALL), Tsingshan and Sinomine Resources
• Arcadia's Special Economic Status allows offshore banking and in $\blacksquare$ foreign currency, exemptions on withholding tax for dividends, remittances and royalties, and customs clearance at mine site
• Recent construction of two ferrochrome furnaces and a coke plant by J. Chinese nickel and steel producer, Tsingshan

TECHNOLOGY • Companies China's Tsingshan completes two big Zimbabwe projects By TONDERAYI MUKEREDZI IN HARARE I chinadaily.com.cn | Updated: 2021-05-15 13:20

Mining Sector key to attaining vision 2030: Nerwande

Pilot Plant producing samples Technical grade petalite for production qualification

• DMS flowsheet delivers highest technical assurance
• Delivering technical grade bulk samples for product $\blacksquare$ qualification
• Reduced metallurgical risk and increased confidence in $\mathbb{Z}^+$ existing technical study work outcomes
• Broader operating learnings to minimise scaling issues L, experienced by almost all Li project ramp-ups
• Readiness test for project regulatory and fiscal regime $\blacksquare$ (including the Special Economic Zone)
• Progressing offtake and development negotiations with strategic groups from across Japan, China and Europe

Optimised Feasibility Study

• Study Manager-External, Lycopodium
• Further level of technical rigour and specificity above DFS
• Delineates staged / direct pathway options with optimised capital / operating cost estimates
• Incorporates Front End Engineering and Design (FEED)

Funding initiatives underway including potential strategic partners

• Bulk petalite samples from recently commissioned pilot plant sent to customers
• Lab-prepared spodumene samples shipped

Arcadia pathways Modular and direct optionality

Modular Pathway

• Staged approach enables lower risk optionality
• Phase 1: Initial 1.2 Mtpa throughput build
• Phase 2: Expansion to 2.4 Mtpa DFS level
• Low risk execution profile
• Pilot plant to deliver high technical certainty and deliver technical grade petalite for production qualification with customers
• External modular Phase 1 plant build and transport to site for assembly
• Optimised FS to delineate staged pathway due 3Q CY2021

Direct Pathway

• Favourable market conditions and accessible funding enables direct 2.4mpta optionality

ospect Resources

DMS PILOT PLANT

$\checkmark$ Delivering technical grade bulk samples for product qualification to customers

$\checkmark$ Sample potential strategic partners for analysis

• increased production potential through technical opportunities

Low cost, high purity products Dual access to battery and high-value ceramics end markets

• Arcadia premium products
• 6% Li₂O spodumene conc. (Fe₂O₃ < 0.80%) chemical grade
• 4% Li₂O petalite conc. (Fe₂O₃ < 0.5%) chemical grade
• 4% Li₂O petalite conc. (Fe₂O₃ < 0.05%) technical grade
• Targeting lowest cash cost quartile production (DFS estimates) υ.
• US\$344/t overall product (P+S) operating cost
• US\$14/t spodumene concentrate opex (after petalite credits)
• Established logistics $\mathcal{L}_{\mathcal{A}}$

ospect Resources

• Road transportation to Beira port
• Available bonded capacity at port
• Bulk shipping to European and Asian customer base

Source: Publicly available company data, August 2021. Refer Appendix C for detailed sourcing and Appendix D for Arcadia (PSC) spodumene operating cost inclusive of petalite sales credit

Spodumene projects operating cash cost (US\$/t)

The petalite opportunity
Premium market pricing and dynamics

• 'Value in use' to customer enables technical grade petalite to fetch a premium vs chemical grade spodumene
• Petalite concentrate contains: $\mathcal{L}_{\mathcal{A}}$
• $-$ +4% Li₂O (equivalent to 1/10^th the contained Li₂O of Lithium Carbonate²);
• approx. 17% Alumina; $\overline{\phantom{m}}$
• approx. 78% Silica;
• <0.05% Iron (Fe₂O₃); and
• reduces energy usages costs vs other lithium products
• Addressable technical market in ceramics/glass for petalite is $+450,000$ tpa³
• Existing petalite production sources have declined over $\mathcal{L}_{\rm{eff}}$ recent years
• Arcadia is the only known petalite deposit of scale, globally

Historical lithium concentrate pricing (US\$/t)¹

Source:

¹ Benchmark Minerals Intelligence Report. Petalite price is CIF China, Including China VAT, Sold to End-User Spodumene price is CIF China, Chemical Market Material.

² Refer to Appendix E

³ Roskill. 2019 Glass & Ceramics Market demand for lithium was 65,500t LCE. 4% petalite concentrate is 0.099 of LCE. LCE=Lithium Carbonate Equivalent

Tier one partners secured
Offtake agreements in place across Europe and Asia

Material solutions advancing life

7 year offtake agreement

• Up to 100,000tpa of 4% petalite concentrate
• World's largest known high purity petalite offtake agreement
• $+40$ years experience with petalite in Europe

7 year offtake agreement

• 40 ktpa of 6% spodumene concentrate
• 112 ktpa of 4% petalite concentrate $\blacksquare$
• US\$10M pre-payment (upon installation $\blacksquare$ of ball mill in project development)
• A\$10M equity investment in Prospect (completed)

Arcadia: a highly strategic Li asset

$\overline{\mathbf{2}}$

Fully permitted, world-class Arcadia Lithium Project in southern Africa

• Low cost, high purity lithium products with established offtake into Europe and Asia
• Clear pathway to production with optionality for low-capital modular development strategy 3 or direct pathway to 2.4mpta
• Pilot plant construction completed on-time and within budget, to deliver technical grade bulk 4 samples for market qualification
• Optimised Feasibility Study in 3Q CY2021 and funding initiatives underway 5

Contact

Nick Rathjen

General Manager,
Corporate Development +61 405 730 041 nrathjen@prospectresources.com.au www.prospectresources.com.au

Appendices

Appendix A
Mineral Resource and Ore Reserve estimates

Mineral Resource

Category	Tonnes (Mt)	$Li2O$ (%)	$Ta_2O_5$ (ppm)	$Li2O$ (kt)	Contained $Ta_2O_5$ (Mlbs)
Measured	15.9	1.17%	121	189	4.2
Indicated	45.4	1.10%	121	502	12.1
Inferred	11.4	1.06%	111	121	2.8
TOTAL	72.7	1.11%	119	808	19.1

Ore Reserve

Category			Tonnes (Mt) $Li_2O$ (%) $Ta_2O_5$ (ppm) $Li_2O$ (kt)		Contained Ta2O5 (Mlbs)
Proved	11.3	1.28%	114	144	2.8
Probable	26.1	1.20%	124	314	7.2
TOTAL	37.4	1.22%	121	457	10.0

Mineral Resources are inclusive of Ore Reserves.

For full details of the Mineral Resource and Ore Reserve estimates refer to Prospect ASX release dated 12 December 2019, Updated DFS confirms robust lithium mine. Prospect confirms that it is not aware of any new information or data that materially affects the information included in that release. All material assumptions and technical parameters underpinning the estimates in that release continue to apply and have not materially changed.

Appendix B 2019 DFS outcomes

Mining and Production
Processing Plant Size	2.4Mtpa
Ore Reserve - Li 2 O grade (diluted) - Ta 2 O 5 grade (diluted)	37.4Mt 1.22% 121ppm
Life of Mine (years)	15.5
Average life of Mine strip ratio	3.2:1
Average Lithia Recovery	55.2%
$Ta2O5$ recoveries	27%
Average Life of Mine Production -Spodumene (t per annum)	173,000
-Petalite Chemical (t per annum) - Petalite Technical (t per annum) -Tantalum (Ibs per annum)	24,000 98,000 174,000
Spodumene concentrate grade	6%
Petalite concentrate grade	4%

Cost Assumptions (US\$/t)
Mining	97
Processing (inclusive crushing)	136
General administration and selling costs	32
Transport and loading	70
Cash operating costs (before tantalite credit and royalties and government marketing costs)	335
Less tantalum credit	(36)
Total cash operating costs FOB (after tantalum credit, before royalties and government marketing costs)	299
Add royalties and government marketing costs	45
Total cash operating costs FOB	344
Capital cost (pre-production) (US\$M)	162
Sustaining capital (LOM) (US\$M)	35

General and Economic
Discount rate (%, real)
LOM Low Iron Spodumene (6%) conc price (US\$/t)
LOM Low Iron Petalite (4%) conc price (US\$/t)	483
LOM Ultra-Low Iron Petalite (4%) conc price (US\$/t)	894
LOM Tantalum conc price (US\$/lb)

For full details of the Arcadia DFS outcomes refer to Prospect ASX release dated 12 December 2019, Updated DFS confirms robust lithium mine. Prospect confirms that it is not aware of any new information or data that materially affects the information included in that release. All material assumptions and technical parameters underpinning the estimates in that release continue to apply and have not materially changed.

Appendix C
Peer comparative sources

Company	Project	Operating cost (US\$/t)	Operating cost basis	Source document
Firefinch (ASX: FFX)	Goulamina, Mali	281 (FOB)	Includes mining, processing, transport, treatment and refining costs. Excludes royalties, site closure & rehabilitation costs.	FFX ASX release dated 20 October 2020, Goulamina Lithium Project Confirmed as World Class Deposit - Strategic Review Commenced; 16 June, Gangfeng to provide up to US\$194m funding
Core Lithium (ASK: CXO)	Finniss. Australia	364 (FOB)	Defined as direct cash operating costs of production FOB, divided by spodumene concentrate production. Direct cash operating costs include mining, processing, transport, port, and ship-loading costs. C1 Operating Costs exclude royalties and sustaining capital, with the LOM average calculated from commencement of commercial production. AUD:USD assumption is 0.70.	CXO ASX release dated 17 April 2019, Finnis Definitive Feasibility Study and Maiden Ore Reserve; and 6 August 2021, Definitive Feasibility Study Investor Presentation
Prospect Resources (ASX: PSC)	Arcadia, Zimbabwe	344 (FOB)	Total cash operating costs FOB includes tantalum credit, transportation, government royalties and marketing costs.	See Appendix B
AVZ Minerals (ASX: AVZ)	Manono, DRC	371 (CFR)	Includes mining, processing, transport, treatment, refining costs, transportation and government royalties	AVZ ASX release dated 21 April 2020, AVZ Delivers Highly Positive Definitive Feasibility Study for Manono Lithium and Tin Project; and 29 July 2021, Activities Report for the Quarter ending 30 June 2021
Liontown Resources (ASX: LTR)	Kathleen Valley, Australia	377 (FOB)	Includes all mining, processing, transport, state and private royalties, freight to port, port costs and site administration and overhead costs.	LTR ASX release dated 9 October 2020, Kathleen Valley PFS Presentation - October 2020
Galaxy Resources (ASX: GXY)	Mt Cattlin, Australia	328 (FOB)	Detail not disclosed.	GXY ASX release dated 22 July 2021, June 2021 Quarterly Activities Report
Pilbara Minerals (ASX: PLS)	Pilgangoora, Australia	441 (CFR)	Includes mining, processing, transport, state and private royalties, native title costs, port, shipping/freight and site based general and administration costs and are net of tantalum by-product credits.	PLS ASX release dated 28 July 2021, June 2021 Quarterly Activities Report
Mineral Resources (ASX: MIN)	Mt Marion, Australia	352 (CFR)	Includes mining, processing, rail/road haulage, port, freight and royalties, including life-of- mine mining service agreement with MRL Group entities, direct administration costs, and an apportionment of corporate and centralized overheads (wmt basis prior to FY21, then dmt). FX rate of 0.77 used for 1H21 AUD conversion.	MIN ASX release dated 16 April 2021, Strategy Overview and Site Tour April 2021
European Lithium (ASX: EUR)	Wolfsberg, Austria	686 (FOB)	Detail not disclosed.	EUR ASX release dated 5 April 2018, European Lithium Completes Positive PFS
IronRidge Resources (LON: IRR)	Ewoyaa, Ghana	247 (FOB)	Excluding corporate costs, associated company overheads, project financing costs and sunk costs, Ghana administration office costs and subsidies to local communities	IronRidge AIM release dated 19 January 2021, Exceptional Scoping Study Results; PLL ASX Release 2 July 2021, Piedmont Expands Spodumene Resources Through Investments in IronRidge Resources

Appendix D

Spodumene concentrate opex (after petalite credit) using 2019 DFS assumptions

Spodumene concentrate opex (after petalite credits) (US\$/t)
Average LoM COGS
Spodumene	US\$268.00
Petalite chemical	US\$428.00
Petalite technical	US\$458.00
Petalite chemical
Revenue per tonne Cost per tonne	US\$483.00 (US\$428.00)
contribution	US\$55.00
Total contribution per year is \$55 x 24,000 = US\$1,320,000. Contribution per tonne of spodumene US\$7.63
Petalite technical
Revenue per tonne	US\$894.00
Cost per tonne	(US\$458.00)
contribution	US\$436.00
Total contribution per year is \$436 x 98,000 = US\$42,728,000. Contribution per tonne of spodumene US\$246.98
Spodumene cost per tonne	US\$268.00
Less Petalite chemical contribution	(US\$7.63)
Less Petalite technical contribution	(US\$246.98)
Spodumene cost after credit	US\$14

Appendix E Calculations to Lithium Carbonate Equivalent (LCE)

	Product	Lithium Contained	Conversion to LCE
Chemical	Lithium metal	100	5.319
	Lithium oxide (lithia)	46.4	2.468
	Lithium Carbonate	18.8	1.000
	Lithium hydroxide monohydrate	16.5	0.878
	Lithium chloride	16.3	0.867
	Spodumene (6% Li 2 O concentrate)	2.8	0.149
Mineral	Petalite (4% Li 2 O concentrate)	1.9	0.099

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ASX:PSC | FRA:5E8

Prospect Resources

The team to deliver Extensive lithium, project development and African mining experience

Matrix of expertise across technical, corporate, project development, offtake and operations Experience across major mining operations both in Africa and globally