PROSPECT RESOURCES LIMITED — Investor Presentation 2021

May 24, 2021

25 May 2021 ASX.PSC FRA.5E8

XX November 2018Investor Presentation May 2021

Prospect Resources Ltd (ASX: PSC, FRA:5E8) ("Prospect" or "the Company") is pleased to provide the attached Investor Presentation.

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.

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

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

PROSPECT RESOURCES LOW COST, HIGH PURITY LITHIUM MAY 2021

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Prospect Resources

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 imp 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.

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

• Prospect 70% ownership, increasing to 87%1 $\checkmark$
• Definitive Feasibility Study completed in December 2019 $\checkmark$
• ← Fully permitted to commence production
• First pilot plant production expected 2Q CY2021 $\checkmark$
• Optimised Feasibility Study completion in 3Q CY2021 $\checkmark$
• $\checkmark$ Close proximity and access to skilled labour force and all requisite infrastructure in Zimbabwe
• ► Special Economic Zone accreditation provides significant financial and logistical advantages
• ← Advanced status delivers highly strategic asset and near term supply in current global geopolitical environment

1. Subject to pending shareholder approval at General Meeting of Prospect shareholders

High-value resource advantage Conventional mining and processing

• Globally large scale resource of 72.7 Mt at 1.11% LiO2 and 119 ppm $Ta_2O_5$
• Top quartile Ore Reserve grade of $+1.2%$ LiO2
• High proportion of high-value in-situ petalite at Arcadia $\mathcal{L}_{\mathcal{A}}$
• High relative confidence classification of existing Mineral Resources and Ore Reserves; strong geological de-risking
• Open pit, near surface mining; lowest quartile strip ratio of 3.2:1
• Extensive metallurgical testwork delivering high certainty results $\sim$
• Dense Media Separation (DMS) and flotation flowsheet $\blacksquare$

esources

• High-purity petalite and spodumene lithium concentrate products
• DFS LOM operating cost of US$344/t, delivering a healthy 64% average operating margin for the first 5 years

Mineral Resource		Mineral Resources are inclusive of Ore Reserves.
Category	Tonnes(Mt)	Li 2 O (%)	$Ta_2O_5$(ppm)	Li 2 O (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)	$Li2O$ (%)	Ta 2 O 5(ppm)	Li 2 O (kt)	Contained$Ta_2O_5$ (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

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.

Lithium market momentum EV adoption accelerating

• EV take-up still in its infancy globally
• China and Europe leading the way
• Europe set to become largest EV market in 2021
• Short term marketing tightening with $\blacksquare$ longer term supply deficits emerging
• Substantial recent price increases reflective of need to incentivise new Li project builds globally

Widening deficits expected from 2022

Source: Bloomberg, Macquarie Research, April 2021

Global lithium demand

Source: LMC Automotive, Autodata, CAAM, Macquarie Research, April 2021

ospect Resources

The next offtake demand wave European EV sales need lithium supply

Source: Company reports, Canaccord Genuity estimates

rospect Resources

Source: Company reports, Canaccord Genuity estimates

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 $\overline{2}$ established offtake into Europe and Asia
• Clear pathway to production with low-capital $\overline{\mathbf{3}}$ modular development strategy
• Pilot plant production in 2Q CY2021 to deliver $\overline{\mathbf{4}}$ high-value petalite market integration
• Optimised Feasibility Study in 3Q CY2021 and 5 project financing initiatives in process

Capital structure
Market listings	ASX: PSCFRA: 5E8
Shares on issue (basic)Shares on issue (fully diluted)	373 M403 M
Share price (24 May 2021)	A$0.16
Market capitalisation	A$60 M
Cash (30 April 2021)	A$9.5 M

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

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

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; 2nd 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

TRAVEL 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

THE Business confidence The challenge is to alter Zimplats is a Improving currency OUICK in Zimbabwe is at its stability is at the heart of perception anchored in a world-class miner with very bleak recent history highest level in years this nascent recovery considerable upside TAKE

Mining Sector key to attaining vision 2030: Nerwande

ospect Resources

Definitive Feasibility Study outcomes1 A highly robust Li development

1. Refer to Appendix A. 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.

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)
  • 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 $\overline{\phantom{a}}$

Spodumene projects operating cash cost (US$/t)

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

$11$

The petalite opportunityPremium market pricing and dynamics

• Technical grade petalite sells for a premium versus chemical grade spodumene
• Technical market pays for Value In Use (VIU) of petalite
• Petalite concentrate contains: $\mathcal{L}_{\mathcal{A}}$
  • $-$ +4% Li2O (equivalent to 1/10th the contained $Li2O$ of Lithium Carbonate2);
  • Approx. 17% Alumina;
  • Approx. 78% Silica; $\overline{\phantom{a}}$
  • <0.05% Iron (Fe2O3); and
  • Provides an energy saving compared to other $\equiv$ lithium products (reducing energy costs)
• EXECUTE: Technical market for petalite is $+650,000$ tpa3
• Arcadia is the only sizeable petalite deposit 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 D

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 securedOfftake 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 $\mathbf{H}$ . of ball mill in project development)
• A$10M equity investment in Prospect $\blacksquare$ (completed)

Farvic minorities transaction1 Increasing Arcadia ownership to 87%

• Prospect currently owns 70% of Prospect Lithium Zimbabwe (PLZ), the 100% owner of the Arcadia Lithium Project
• 30% minority ownership of PLZ is free-carried
• Agreed transaction (subject to shareholder approval) to increase Prospect's interest in PLZ to 87% in exchange for:
  • Cash payment of A$1,187,210; and
  • 9,497,680 shares in Prospect Resources (2.5% increase in SOI)
• Highly accretive for Prospect given existing free-carry of PLZ minorities
• Independent Expert, Stantons, has assessed the transaction to be "fair and reasonable to Prospect Shareholders"
• Stantons preferred valuation for the 17% interest in PLZ is A$28M, compared with the implied valuation of the consideration to be paid of A$4.1M (an 85% discount)
• Shares issued to Farvic subject to voluntary escrow, with 25% being $\blacksquare$ released every 6 months

VRM independent valuation of Arcadia (A$M)

• 1. For full details of the agreed Farvic transaction and Independent Expert's Report (including VRM valuation assessment), refer to Prospect ASX release dated 25 May 2020, Notice of General Meeting
• 1. VRM have used independently derived assumptions, including on commodity prices, Technical grade Petalite recovery and discount rate.

The streamlined Arcadia

A clear, de-risked pathway to commercial production

• Strategic focus on low capital route to production $\mathbf{r}$
• Staged development plan introduced February 2021
  • Modular build pathway
  • Phase 1: Initial 1.2 Mtpa throughput build $\rightarrow$
  • Phase 2: Expansion to 2.4 Mtpa DFS level
• Low risk execution profile

ospect Resources

• Pilot plant to deliver high technical certainty and initial $\equiv$ petalite market integration
• External modular Phase 1 plant build and transport to site for assembly
• Optimised FS to delineate staged pathway due 3Q CY2021
• Ready option to go directly to 2.4 Mtpa with favourable market $\mathbf{r}$ activities and availability of funding

CY2021 DMS PILOT PLANT $\checkmark$ Petalite samples to customers driving early market integration ✔ Optimise flowsheet and design for FEED ✓ Optimised Feasibility Study completion in parallel $\checkmark$ Supplying samples to potential strategic partners for DD $\blacktriangledown$ $\overline{\mathbf{r}}$ $\overline{\mathbf{C}}$ PHASE 1: SINGLE TRAIN PLANT Mtp $\checkmark$ Lower initial capex development $\overline{\mathbf{N}}$ $\checkmark$ Delivers accelerated production and scale-up leverage 2.4Mtpa EdiMz PHASE 2: DUAL TRAIN PLANT $\checkmark$ Brownfield expansion efficiencies $\checkmark$ Modular execution approach delivers low execution risk ← De-risked operating profile from Phase 1 commercialisation Further potential through optimisation

Pilot plant strategyEarly stage petalite market penetration

• DMS flowsheet delivers highest technical assurance
• Petalite samples to glass ceramic customers for product qualification
• Early stage de-risking of petalite market integration
• " Targeting maximisation of petalite sales into premiumly priced technical grade market
• Broader operating learnings to minimise scaling $\blacksquare$ issues experienced by almost all Li project ramp-ups
• Readiness test for project regulatory and fiscal regime (including the Special Economic Zone)

Construction progressOn track for first petalite shipment this quarter

• On schedule and on budget
• Approximately 70% complete on EPC scope (at 23 April):
  • 100% flowsheet, design and procurement complete
  • 90% non-process infrastructure complete
  • 75% of power supply complete
  • 50% earthworks and civils complete
• Crushing circuit and DMS module commissioning expected in coming weeks
• On track for first petalite shipment in current quarter

Optimised Feasibility StudySet for completion in 30 CY2021

Study Manager-External, Lycopodium

Further level of technical rigour and specificity above DFS

Delineates staged pathway and optimised capital / operating cost estimates

Incorporates Front End Engineering and Design (FEED)

In discussions with potential strategic partners for project finance

• Bulk petalite samples to be produced from pilot plant from June
• Spodumene samples being lab prepared and shipped in June

Arcadia: a highly strategic Li asset

Low cost, high purity lithium products with established offtake into Europe and Asia

Clear pathway to production with low-capital modular development strategy

Pilot plant production in 2Q CY2021 to deliver high-value petalite market integration 4

Optimised Feasibility Study in 3Q CY2021 and project financing initiatives in process 5

3

Contact

Nick Rathjen

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

Appendix AKey Feasibility Study outcomes

Mining and Production
Processing Plant Size	2.4Mtpa
Ore Reserve- Li 2 O grade (diluted)- Ta 2 O 5 grade (diluted)	37.4Mt1.22%121ppm
Life of Mine (years)	15.5
Average life of Mine strip ratio	3.2:1
Average Lithia Recovery	55.2%
$Ta_2O_5$ recoveries	27%
Average Life of Mine Production-Spodumene (t per annum)-Petalite Chemical (t per annum)- Petalite Technical (t per annum)-Tantalum (Ibs per annum)	173,00024,00098,000174,000
Spodumene concentrate grade	6%
Petalite concentrate grade	4%
Tantalite concentrate grade	25%

Cost Assumptions (US$/t) 97 Mining Processing (inclusive crushing) 136 General administration and selling costs 32 70 Transport and loading Cash operating costs (before tantalite credit and royalties and government 335 marketing costs) Less tantalum credit $(36)$ Total cash operating costs FOB (after tantalum credit, before royalties and 299 government marketing costs) Add royalties and government marketing costs 45 Total cash operating costs FOB 344

General and Economic
Discount rate (%, real)	10
LOM Low Iron Spodumene (6%) conc price (US$/t)	701
LOM Low Iron Petalite (4%) conc price (US$/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.

Capital cost (pre-production) (US$M)

Sustaining capital (LOM) (US$M)

rospect Resources

162 35

Appendix BPeer comparative sources

Company	Project	Operating cost(USS/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 WorldClass Deposit - Strategic Review Commenced
Core Lithium (ASX: CXO)	Finniss, Australia	300 (FOB)	Direct cash operating costs of production FOB, net of by-product credits, divided by theamount of payable spodumene concentrate. Direct cash operating costs include mining,processing, transport, treatment and refining costs. Excludes royalties and pre-strip minedevelopment costs.	CXO ASX release dated 17 April 2019, FinnisDefinitive Feasibility Study and Maiden OreReserve
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 andgovernment royalties	AVZ ASX release dated 21 April 2020, AVZDelivers Highly Positive Definitive FeasibilityStudy for Manono Lithium and Tin Project
Liontown Resources (ASX: LTR)	Kathleen Valley,Australia	377 (FOB)	Includes all mining, processing, transport, state and private royalties, freight to port, portcosts and site administration and overhead costs.	LTR ASX release dated 9 October 2020, KathleenValley PFS Presentation - October 2020
Galaxy Resources (ASX: GXY)	Mt Cattlin,Australia	384 (FOB)	Detail not disclosed.	GXY ASX release dated 19 April 2021, March2021 Quarterly Activities Report
Pilbara Minerals (ASX: PLS)	Pilgangoora,Australia	383 (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 tantalumby-product credits.	PLS ASX release dated 21 April 2021, March2021 Quarterly Activities Report
Mineral Resources (ASX: MIN)	Mt Marion,Australia	505 (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).	MIN ASX release dated 21 September 2020,Presentation to Bond Investors
European Lithium (ASX: EUR)	Wolfsberg,Austria	686 (FOB)	Detail not disclosed.	EUR ASX release dated 5 April 2018, EuropeanLithium Completes Positive PFS

Appendix CSpodumene concentrate opex (after petalite credit)

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	US$483.00
Cost per tonne	(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 \times 98,000 = US$42,728,000$
Contribution per tonne of spodumene US$246.98
Total cost per tonne	US$268.00
Less Petalite chemical Contribution	(US$7.63)
Less Petalite technical contribution	(US$246.98)
Total cost after credit	US$14

Appendix DCalculations to Lithium Carbonate Equivalent (LCE)

	Product	Lithium Contained	Conversion to LCE
	Lithium metal	100	5.319
	Lithium oxide (lithia)	46.4	2.468
Chemical	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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