Prospect Resources walked away with a good deal when it sold Arcadia Mine to one of the world’s biggest battery metals companies, Huayou Cobalt. Now, the exploration company is looking to do it again.
For exploration companies, the game is to take a risk on a project and invest in determining a resource, hoping a larger investor will take notice.
By June last year, Prospect, listed on the Australian Stock Exchange, had spent US$25.7 million on exploration and evaluation at Arcadia. Then Huayou, the world’s number one cobalt company, came looking for lithium assets, and Prospect got US$378 million for its 87% stake. Huayou agreed to pay a 78% premium on Prospect’s 10-day average share price.
For Prospect, this was as good as it gets in the exploration business. Now Prospect is hoping for a new win.
The company has started exploring new assets. In Zimbabwe, the company is exploring the Step Aside Lithium Project, located 8km north of the Arcadia Lithium Project. Exploration drilling there has given “encouraging results”, according to a new update by the company. Prospect has also recently announced it is going into the region, signing an agreement to acquire up to 51% and potentially up to 85% interest in the Omaruru lithium project in Namibia.
Sam Hosack, Prospect’s MD and CEO, is heading back home to Zimbabwe from where he will lead the company’s next exploration campaign.
“I am pleased to report that our Managing Director and CEO, Sam Hosack, is relocating back to Harare before Christmas for an expected period of 18 to 24 months, where he can more easily lead and oversee the company’s growing number of project activities in Africa. This is a positive development for all shareholders,” chairman Mark Wheatley told shareholders on Wednesday.
“We were there 4 years ago when many thought it was a bad district…”
After Huayou Cobalt deal, Prospect Resources CFO Ian Goldberg speaks on Zim’s investment climate and future plans:
• Zim a better market than other peers
• Seeking new projects in Zim & region, but not SA pic.twitter.com/16YXHbYiah— newZWire (@newswireZW) April 28, 2022
The successful deal with Huayou had opened up new opportunities, Wheatley said.
“The success and publicity associated with the Arcadia transaction has resulted in a significant increase in opportunities being presented to Prospect. Our focus is on sub-Saharan regions where we have experience and local capability,” said Wheatly.
This would not be Prospect’s first exploration in the region. The company was in the DRC until 2019, when it decided to sell Prospect Cobalt, its exploration business there, to focus on the Zimbabwe project.
Apart from Hosack, other Zimbabweans in the Prospect leadership include Technical Manager John Maketo, CFO Ian Goldberg and non-executive director Zed Rusike.
Source: NewZwire
