Zimpapers Logo

Golden Sibanda Senior Business Reporter
PROSPECT Resources, the Australia Stock Exchange (ASX) listed developer of the Arcadia Lithium Mine in Zimbabwe, says the price of its share vaulted 53 percent over a 30-day period on rising global sentiment on lithium as well as its operations. The ASX listed firm said this after putting out a statement about its intention to raise nearly a million Australian dollars for working capital requirements of the junior mining entity at the Arcadia project, 38 kilometres East of Harare.

Prospect has since managed to raise the targeted amount through a private placement and will issue out 4,4 million new shareholders, having decided to shelve plans for a right issue to avoid diluting existing shareholders.

There is rapidly growing interest in lithium across the world as the mineral, used in glass manufacturing, is also used in the manufacturing of electric car batteries, the future non-combustible energy source of the automobile industry.

Prospect’s technical grade and ultra-low iron petalite has already passed the second qualification stage with one of Europe’s largest glass manufacturers, which presents a huge lucrative opportunity for an off-take agreement.

Lithium has been classified as one of the key mineral expected to drive Zimbabwe’s quest to build a US$12 billion industry by 2023 and is anticipated by that time to generate US$500 million for the country annually.

The company said yesterday it had eventually settled for private placement after noting the rapid rise in the company’s share price, which would make it difficult for some shareholders to follow their rights, hence the risk of significant dilution.

Prospect’s stock price, the company said in a statement, had shot up by 53 percent inside a month on strong positive sentiment in lithium, confidence in the firm’s planned activities and expected continued revaluation.

Executive chairman, Hugh Warner, said “The March 2020 quarter has a number of key initiatives with a clear focus on advancing the Arcadia Lithium project through: one off-take discussions of the premium ultra-low iron petalite product for supply into Europe, Japan and Korea; two discussions with Uranium One Group; and three project finance discussions with Afreximbank.”

This has inspired investor interest in the firm’s stock, pushing up its value and so it was deemed that fixing a rights issue price now, may mean a significantly larger dilution to shareholders who are not able to participate in the rights issue due to financial reasons or their jurisdiction.

Prospect Resources Limited is an ASX listed lithium and electric vehicle battery minerals company based in Perth with operations in Zimbabwe, and exploration activities in Zimbabwe and the Democratic Republic of Congo.

Prospect’s flagship project is the Arcadia lithium project located on the outskirts of Harare in Zimbabwe.

The Arcadia project represents a globally significant hard rock lithium resource and is being rapidly developed by Prospect’s, focusing on near term production of petalite and spodumene concentrates.