PROSPECT RESOURCES LIMITED — Investor Presentation 2021

Jan 31, 2021

Corporate Presentation February 2021

African lithium developer, Prospect Resources Limited (ASX: PSC, FRA:5EB) is pleased to advice that Nicholas Rathjen, Head of Corporate Development, will be presenting at the 121 Africa Conference this week.

A copy of the presentation is attached.

This release was authorised by Mr 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 | Phone: +61 8 9217 3300

Suite 6, 245 Churchill Ave. Subiaco WA 6008 | Email: info@prospectresources.com.au

Page 1 of 1

121 Africa February 2021

==> picture [463 x 65] intentionally omitted <==

Disclaimer

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 implied) arising out of, contained in or derived from, or for any omissions from the presentation, except liability under statute that can not be 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.

==> picture [141 x 30] intentionally omitted <==

2

I

I

Corporate Overview Low cost, high quality lithium development

Top 10 largest hard rock lithium asset globally – with 1 DFS and fully permitted Offtake agreements secured with tier one partners 2 across Europe and Asia. Pilot plant to produce high purity petalite & spodumene 3 products in H1 CY2021.

4 Management is invested. Owning 6% of shares on issue

==> picture [141 x 30] intentionally omitted <==

Corporate Summary	Corporate Summary
Equity Listings	ASX: PSC FRA: 5E8
Shares Outstanding(29/01/2021) Shares (F/D)	332m 344m
Share Price(29/01/2021)	A$0.17
Market Capitalisation(29/01/2021)	A$56m
Cash(31/12/20)	A$5.5m
Top Shareholders %
Lord of the Seven Hills Holding FZE 9.75
Citicorp Nominees Pty Ltd 8.50
Sinomine International Exploration 6.27
HSBC Custody Nominees 5.01
J P Morgan Nominees Australia Pty Ltd 4.97
MBM Capital Partners 4.25

==> picture [282 x 169] intentionally omitted <==

----- Start of picture text -----

6%
6% Board & Management
Sinomine Resources
20% (Offtake Partner)
Instiutions & Family
Offices
68%
HNW & Retail
----- End of picture text -----

3

I

I

Board of Directors and Executives

Lithium, project development and African mining experience

The team comprises a matrix of expertise across technical, corporate, project development, offtake and mine operations Experience across major miners operations both in Africa and globally

==> picture [755 x 244] intentionally omitted <==

----- Start of picture text -----

Mark Dev Shetty Zed Rusike Gerry
Wheatley Non-Executive Director Non-Executive Director Fahey
Non-Executive Non-Executive
Chairman Director
Sam Hosack Harry Henian Chris
Managing Director Greaves Chen Hilbrands
Executive Director Non-Executive Chief Financial
Director Officer
----- End of picture text -----

==> picture [141 x 30] intentionally omitted <==

4

Arcadia Lithium Project

Direct access to all essential services and infrastructure

==> picture [507 x 348] intentionally omitted <==

• Operating in an established mining jurisdiction with over 100 years of mining history

• Zimbabwe has the 2nd largest platinum and chrome deposits in the world and is the 5th largest producer of lithium in the world.

• Caledonia Mining (NYSE: CMCL)

• • Implats (JSE: IMP)

• Zimplats (ASX: ZIM)

• Sibanye Stillwater (JSE: SSW)

• Anglo American (LSE: ALL)

• Close proximity to a skilled labour force and established infrastructure

• Secured a Special Economic Zone, providing financial and logistical advantages:

• Ability to bank offshore and in foreign currency

• Exemptions of withholding tax for dividends, remittances and royalties

• • Customs clearance at mine site

• Fully permitted to commence production

==> picture [141 x 30] intentionally omitted <==

5

I

I

Arcadia - Mining

Strong project economics validating a transition to development

Ore Reserve Nov 2019

Category	Tonnes (Mt)	Li2O (%)	Ta2O5 (ppm)	Li2O (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

==> picture [451 x 282] intentionally omitted <==

• Open pit, near surface mining

• Low strip ratio of 3.2:1 (waste:ore)

• Reduced risks associated with grade control and orebody knowledge, with 30% of Reserve in the proved category

• High grade vs peers

• Long life of mine 15.5 years

• Extensive metallurgical testwork completed providing viability testing

• Using conventional mining methods (Dense Media Separation & Flotation)

• Producing high purity petalite and spodumene lithium concentrate

==> picture [141 x 30] intentionally omitted <==

6

I

I

Arcadia - Definitive Feasibility Study Strong project economics validating a transition to development

Operating Parameters	Units	Value
Life of Mine Modelled (All Open Pit)	Years	15.5
Plant Throughput	Mtpa	2.4
Average Lithia Head Grade	%	1.22
Average Lithia Recovery	%	55.2
Average Life of Mine Spodumene Production	ktpa	173
Average Life of Mine Petalite Production	ktpa	122
-Average Life of Mine Chemical Grade Low Iron Petalite Production	ktpa	24
-Average Life of Mine Technical Grade Ultra-Low Iron Petalite Production	ktpa	98
Capital and Operating Costs	Units	Value
Life of Mine Cash Operating Cost (FOB)1	US$/t	344
Capital Costs (Pre-production)	US$M	162
Sustaining Capital	US$M	35
Life of Mine Low Iron Spodumene Concentrate Price	US$/t	701
Life of Mine Low Iron Petalite Chemical Concentrate Price	US$/t	483
Life of Mine Ultra-Low Iron Petalite Concentrate Price	US$/t	894
Financial Summary	Units	Value
Average first 5 years Annual Free Cash Flow from operations (post-tax)	US$M	145
Average first 10 years Annual Free Cash Flow from operations (post-tax)	US$M	116
Average Annual Free Cash Flow from Operations (post-tax)	US$M	101
Average Annual EBITDA	US$M	114
Pre-Tax NPV10	US$M	710
Pre-Tax IRR	%	71
Post Tax NPV10	US$M	645
Post Tax IRR	%	70
Operating Margin	%	43
Payback Period (From Commencement of Production)	Years	1.5

The financial outcomes of the DFS position Arcadia to become the first listed lithium producer in Africa

• 15.5 year life-of-mine@2.4Mtpa

• LOM cash operating cost US$344/t

▪ LOM revenue US$3.42 billion

• Average annual EBITDA US$114 million

• ▪ Pre-Tax NPV of US$710 million

• Pre-Tax IRR of 71%

• Project payback of ~1.5 years

==> picture [141 x 30] intentionally omitted <==

1 Total cash operating costs FOB (before tantalum credit, before royalties and government marketing costs) 2 Net Present Value (NPV) is presented on a nominal basis and with a discount rate of 10%

7

I

I

Competitive Advantage Arcadia Project Economics Competitive cost of production throughout lithium cycle

Spodumene hard rock total cost curve

Arcadia is positioned to be the lowest quartile spodumene producer:

• Upper quartile ore head grade

• Lowest quartile strip ratio, open cut

• Lowest quartile capital intensity

==> picture [630 x 323] intentionally omitted <==

----- Start of picture text -----

$800
$686
$700
$600
$505
$500
$450
$412
$400 $369 $371
$344
$300
$200
$100
$14
$-
PSC DFS incl PSC DFS AJM AVZ GXY PLS MER EUR
petalite credit
USD dmt
----- End of picture text -----

==> picture [141 x 30] intentionally omitted <==

Source: Company announcements

8

I

I

Arcadia DFS cash operating costs FOB - real and net of tantalum credit. https://www.prospectresources.com.au/sites/default/files/asx-announcements/6959486.pdf Arcadia DFS cash operating costs FOB including petalite credit – real, net of tantalum and petalite credit.

Arcadia Project Economics Strong cashflow, delivering rapid payback

==> picture [823 x 398] intentionally omitted <==

----- Start of picture text -----

36 Months
US$M Revenue and Net Cashflow (After Tax)
400 1600
36 Months
1400
300 18 Months
1200
200 1000
800
100
600
0 400
Production
Commence 200
-100
0
-200 Project -200
Payback
Cumulative net cashflow after tax Revenue (net of Ta credits) Net cashflow after tax
Cumulative Net Cashflow US$M
Annual Revenue & Net Cashflow US$M
----- End of picture text -----

==> picture [141 x 30] intentionally omitted <==

9

I

I

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

==> picture [408 x 386] intentionally omitted <==

Offtake Agreements in place:

• 7 year offtake agreement for:

==> picture [206 x 44] intentionally omitted <==

• 40,000tpa of 6% spodumene concentrate;

• 112,000tpa of 4% petalite concentrate; and

• US$10m pre-payment

• A$10m equity investment in Prospect Resources[1]

• 7 year term for up to 100,000tpa of 4% petalite concentrate[2]

• World’s largest known high purity petalite offtake agreement

==> picture [186 x 18] intentionally omitted <==

• +40 years experience with petalite in Europe

In discussions with strategic corporates and potential offtake partners for project finance

==> picture [141 x 30] intentionally omitted <==

ASX announcement titled “Completion of Placement and Sinomine Transaction” on 4 April 2018 ASX announcement titled “Prospect signs Petalite Offtake Agreement with Sibelco” on 17 August 2020

10

I

I

Attractive Upside Valuation compared to Peers Peer group comprises advanced greenfield hard rock lithium projects

==> picture [104 x 14] intentionally omitted <==

----- Start of picture text -----

EV / Att. Reserve [1]
----- End of picture text -----

EV / % of Att. NPV (after-tax)[1]

==> picture [423 x 278] intentionally omitted <==

----- Start of picture text -----

2,000
1,867
1,800
1,600
1,400
1,200
1,000
800
600
400
281
242
200
64
-
Prospect Resources AVZ Minerals Core Lithium Liontown
A$ / LCE
----- End of picture text -----

==> picture [470 x 279] intentionally omitted <==

----- Start of picture text -----

350%
316%
300%
250%
200%
150%
100% 88%
63% 61%
50%
8%
0%
Prospect Resources AVZ Minerals Core Lithium Piedmont Lithium Liontown
% of Att. NPV (after-tax)
----- End of picture text -----

==> picture [141 x 30] intentionally omitted <==

11

I

I

1 Further detail provided in Appendix 3

Lithium Market

EV Adoption accelerating

• China and Europe leading the way. Europe set to become the largest EV market for 2021

• UK sales have accelerated following emissions policy and EV subsidy. In order for the UK to meet their EV target, it needs:

• Half of the world’s 2020 lithium supply to meet future battery capacity challenge[1]

• Half of the worlds lithium produced in 2020 (49% of 315,000 tonnes LCE in 2020)

• More than the entire world’s supply of anode material in 2020[1]

• Strong growth in EV sales in H2 CY2020 are expected to continue in CY2021

• Supply chain feedback suggesting higher prices in 2021 across both the chemical and glass & ceramics markets

==> picture [413 x 202] intentionally omitted <==

==> picture [413 x 203] intentionally omitted <==

==> picture [141 x 30] intentionally omitted <==

12

I

I

1 Source: Benchmark’s Lithium Forecast Q3 2020

16%

16%

16%

Lithium Market

Without further investment, the market is in deficit in 2021

Shortage of long-term supply

• Existing operational supply only in place to meet demand to 2021

• For additional producers to meet the demands of the market in 2022, development would have had to commence in 2019[1]

• Therefore, without further investment in new projects there will be a supply shortage by 2022 where EV growth will accelerate as they reach cost parity with ICE vehicles

==> picture [141 x 30] intentionally omitted <==

==> picture [562 x 338] intentionally omitted <==

----- Start of picture text -----

Million LCE tonnes
4.0
EV achieves ICE cost parity [2]
3.5 Arcadia’s targeted commencement of operation
Demand
Necessary unplanned supply
3.0
Identified potential supply [3]
Secondary supply
2.5 Brownfield
Operational supply
2.0
1.5
1.0
0.5
0.0
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35
----- End of picture text -----

LCE = Lithium Carbonate Equivalent

• 1 Assuming development and ramp up phase of 24 months

2 Bernstein

==> picture [30 x 12] intentionally omitted <==

----- Start of picture text -----

52%
----- End of picture text -----

13

I

I

3 Identified potential supply is a collection of Benchmark Minerals Intelligence's highly probable, probable and possible supply categories

Clear pathway to production Staged development, producing of high purity products

PILOT PLANT H1 CY2021			✓ Production of high purity samples for customers ✓ Optimise flowsheet and design for FEED ✓ Supplying samples to strategic corporates and potential offtake partners for their continuing due diligence
Stage 1: SINGLE TRAIN PLANT Stage 2: DUAL TRAIN PLANT Further expansion potential CY2022 CY2023-25			✓ Low capex ✓ Produces sizeable volumes of high purity petalite and spodumene ✓ Opportunity to rapidly commence production and scale up plant ✓ Capex expansion as brownfield operation ✓ Increasing production further strengthening cashflow

==> picture [141 x 30] intentionally omitted <==

14

I

Summary

• DFS completed

Africa’s most advanced lithium project

• Fully permitted

• Offtake Partners

• Pathway to ramping up production

• • Top 10 Largest Global Hard Rock Lithium Asset

Tier 1, low cost deposit with a Long Life of Mine

• Mineral Resource 72.7Mt @1.11% Li2O and 119ppm Ta2O5

• Ore Reserve 37.4Mt @ 1.22% Li2O and 121ppm Ta2O5

• Operating cost in the lowest quartile at US$344/t

• 15.5 Year Life of Mine

• • Average Annual EBITDA (First 5 years) US$168M

Strong project economics

• CAPEX US$162M, including EPCM cost provision & 14% contingency[1]

• • Pre-tax IRR of 71% • Pre-tax NPV10 US$710M[2]

• The global demand for lithium is driven by EV growth

• Exposure to both high growth EV market & stable glass • Supply into the stable glass & ceramics and the ceramic market growing EV / battery market

==> picture [141 x 30] intentionally omitted <==

1 Contingency includes EAA (Estimate Accuracy Allowance) 2 Net Present Value (NPV) is presented on a nominal basis and with a discount rate of 10%.

15

I

I

CONTACT US

Nick Rathjen General Manager, Corporate Development Mobile: +61 405 730 041 Email: nrathjen@prospectresources.com.au

==> picture [65 x 65] intentionally omitted <==

==> picture [65 x 65] intentionally omitted <==

==> picture [64 x 65] intentionally omitted <==

www.prospectresources.com.au

==> picture [374 x 52] intentionally omitted <==

==> picture [172 x 25] intentionally omitted <==

APPENDIX

Appendix 1

Project parameters and assumptions

Mining and Production	Mining and Production
Processing Plant Size	2.4Mtpa
Ore Reserve - Li2O grade (diluted) - Ta2O5grade (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%
Ta2O5recoveries	27%
Average Life of Mine Production -Spodumene (t per annum) -Petalite Chemical (t per annum) - Petalite Technical (t per annum) -Tantalum (lbs per annum)	173,000 24,000 98,000 174,000
Spodumene concentrate grade	6%
Petalite concentrate grade	4%
Tantalite concentrate grade	25%

Cost Assumptions(US$/t)	Cost Assumptions(US$/t)
Mining	97
Processing (inclusive crushing)	136
~~* X % h~~ General administration and selling costs	32
~~x sorter~~ Transport and loading	70
Cash operating costs (before tantalite credit and royalties and government marketing costs)	335
* Xx% increase 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
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)	75

==> picture [141 x 30] intentionally omitted <==

18

I

I

Appendix 2

LoM Financials and Capital Expenditure

Life of Mine Financials	Life of Mine Financials
Average Annual Free Cash Flow from Operations (post-tax)	US$101M
Average first 5 years Annual Free Cashflow from operations (post-tax)	US$145M
Average first 10 years Annual Free Cashflow from operations (post tax)	US$116M
Life of Mine Revenue (excl. Ta Credits)	US$3.42B
Average Annual EBITDA	US$114M
Pre-Tax NPV10	US$710M
Pre-Tax IRR	71%
Post Tax NPV10	US$645M
Post Tax IRR	70%
Operating Margin	43%
Payback Period (From Commencement of Production)	18 Months

Capital Cost Summary(US$ Thousands)	Capital Cost Summary(US$ Thousands)
Mine Development Cost (Sub Total)		4 816
Process Plan (Sub Total)		117 715
Earthworks			5 047
Civil Works	*Xx % shorter		8 269
Mechanical Equipment incl. Modular plant			50 332
Structural Steel			4 098
Plate Work			3 382
Piping	* Xx% increase		3 862
Electrical, C&I			15 115
Spares & Consumables			1 411
Transport			3 016
Process Plant Installation			23 183
Tantalum Recovery			Incl. Above
Non-process Plant Costs		39 902
Mining & General Infrastructure			18 772
Engineering and Services			11 090
Mining Inventories on Hand at Commissioning			2 543
First Fill Spaces & Consumables			4 783
Non-Plant CAPEX			2 714
TOTAL (Direct and Indirect Costs incl. Contingency)		162 433

==> picture [141 x 30] intentionally omitted <==

19

I

I

Appendix 3 Valuation peer group

Company	Prospect Resources	AVZ Minerals	Core Lithium	Piedmont Lithium	Liontown
Ticker	PSC	AVZ	CXO	PLL	LTR
Exchange	ASX	ASX	ASX	ASX	ASX
Market Capitalisation(29/01/2021)	56	535	346	949	705
Cash (A$m)	5.5	8.3	4.5	95.9	16.4
EV(A$m)	50.5	526.7	341.5	878.1	688.6
Project Name	Arcadia	Manono	Finniss	Piedmont	Kathleen Valley
Country	Zimbabwe	DRC	Australia	USA	Australia
Ownership	70%	60%	100%	100%	100%
Reserve - Total (Mt LCE)	1.13	3.63	0.18	NA	2.45
EV/Att. Reserve (A$/LCE)	64	242	1,867	NA	281
Project NPV (US$ & after-tax)1	645	1,028	80	714	829
EV/% of Att. NPV	8%	63%	316%	88%	61%
DFS	Yes	Yes	Yes	No	No
Binding Offtake	Yes	Yes	Yes	Yes	No
Mining	Open Pit	Open Pit	Open Pit and U/G	Open Pit	Open Pit and U/G
Source:	ArcadiaDFS12 December 2019	ManonoDFS21 April 2020	FinnissDFS17 April 2019	PiedmontPFS26May2020	Kathleen ValleyPFS 9 October 2020

==> picture [141 x 30] intentionally omitted <==

Information sourced from ASX announcements lodged by ASX: AVZ, ASX: CXO, ASX:PLL and ASX:LTR, 1 Core Lithium NPV is on a pre-tax basis. All other NPV’s are post-tax. Piedmont Lithium NPV based on “merchant project” scenario Exchange rate of AUDUSD $0.74

I

20

I

Appendix 4

Mineral Resource Statement

Arcadia High Grade JORC Mineral Resource Statement- 1% Li2O Cut-off[1]

Category	Tonnes	Li2O %	Ta2O5 ppm	Li2O Tonnes	Ta2O5 Mlbs
Measured	10,200,000	1.45%	132	148,100	3.0
Indicated	27,200,000	1.39%	119	378,400	7.1
Inferred	5,800,000	1.45%	97	84,000	1.2
GRAND TOTAL	43,200,000	1.41%	119	610,500	11.3

Arcadia JORC Mineral Resources Statement- 0.2% Li2O Cut-off1	Arcadia JORC Mineral Resources Statement- 0.2% Li2O Cut-off1	Arcadia JORC Mineral Resources Statement- 0.2% Li2O Cut-off1	Arcadia JORC Mineral Resources Statement- 0.2% Li2O Cut-off1	Arcadia JORC Mineral Resources Statement- 0.2% Li2O Cut-off1	Arcadia JORC Mineral Resources Statement- 0.2% Li2O Cut-off1
Category	Tonnes	Li2O %	Ta2O5 ppm	Li2O Tonnes	Ta2O5 Mlbs
Measured	15,900,000	1.17%	121	184,900	4.2
Indicated	45,400,000	1.10%	121	501,500	12.1
Inferred	11,400,000	1.06%	111	121,400	2.8
GRAND TOTAL	72,700,000	1.11%	119	807,800	19.1

==> picture [141 x 30] intentionally omitted <==

21

1 Minerals Resource Statement as described in ASX announcement dated 25 October 2017

I

I