Russian firm and global energy giant, Uranium One, is closing in on a potential, equity deal and 51 percent off-take agreement with Zimbabwe lithium mine, Arcadia, owner Prospect Resources.
The Australia Stock Exchange (ASX) listed junior mine said this week it had appointed Renaissance Capital as the exclusive financial advisor in relation to Arcadia Mine, 38km east of Harare.
Renaissance’s role pertains to the potential sale, directly or indirectly, of the junior miner “or other participation in, or the whole or part of the licence and or the assets of, Arcadia Lithium Mine or Prospect itself to Uranium One or its affiliates”.
Prospect said the discussions with Uranium One were incomplete and ongoing and there is no guarantee the memorandum of Understanding (MoU) with Uranium One will result in a binding agreement or proposal or as to the timing or terms on which any transaction may proceed. Renaissance Capital is a leading independent investment bank, providing access to over 50 markets globally with operations in Africa, central and Eastern Europe, North America, and the Middle East.
Zimbabwe has proven that it has abundant lithium resources. As an important mineral resource, Zimbabwe’s lithium mines are attracting more investors, which will change the development prospects of Zimbabwe’s mining industry.
Government has listed lithium as one of the key minerals expected to drive its grand vision of a US$12 billion mining industry, from about $3,6 billion currently, by year 2023 and transforming the country to an upper middle-income economy by 2030.
Prospect recently agreed to extend an earlier 90-day exclusivity period to conduct due diligence on the company and its Arcadia project on same terms of the MoU agreement, signed late last year, until August this year.
Subject to satisfactory due diligence, Uranium One would negotiate equity investment terms in Prospect or its subsidiaries; and off-take terms for at least 51 percent of the company’s future lithium production.
Uranium One is a global energy company and one of the world’s largest uranium producers, with a diverse portfolio of assets worldwide, including in Kazakhstan, US and Tanzania.
Zimbabwe is the world’s fifth largest producer of lithium, with only a single producing mine, Bikita Minerals, but could move higher the rankings once four other new developing projects, including Arcadia, come online.
Meanwhile, Prospect also recently signed an MoU with Belgian industrial minerals blue-chip firm Sibelco for the offtake of ultra-low iron petalite mineral from Arcadia Mine in Zimbabwe.
Demand for ultra-low iron lithium, also used in the ceramics industry, is anticipated to grow exponentially as electric vehicles become more common and affordable globally.
It is expected this will continue to drive growth in worldwide demand for electric vehicles, as the world shifts from internal combustion engines vehicles.