Junior miner Prospect Resources in $55mln capital raise for Arcadia Lithium project

Junior miner Prospect Resources in $55mln capital raise for Arcadia Lithium project

HARARE, September 18 (The Source) – Australian-listed junior miner Prospect Resources says it is negotiating with potential investors to raise $55 million to construct a concentrate plant for its Arcadia lithium project in Harare. 

Prospect is a southern Africa focused lithium and gold mining and exploration company based in Perth, Australia, with operations in Zimbabwe. The company also operates Sally Gold Mine and Prestwood Gold Mine, located in Gwanda.

Its market capitalisation as at September 14 stood at $38,2 million.

Executive director, Henry Greaves told The Source on Monday that the company was in talks with both banks and offtake partners for the capital raise.

“We need to raise about $55 million for the first phase of the project, which covers construction of the concentrate plant, and we are still working on what will be required for phase 2,” said Greaves.

“We are negotiating with multiple potential partners which include banks and off-take partners. The funding can come from either debt or equity and we are discussing all options to find the best way to fund the project.”

Greaves said the mine would start production in 12 to 18 months once the funding is secured.

“This project will be a significant foreign currency earner for the country and we are working closely with the Reserve Bank of Zimbabwe on various requirements for the project,” he said.

The Arcadia project is expected to have a yearly plant throughput of 1,2 million tonnes, and a lifespan of 20 years.

Last month, the company said demand for its samples from the mine was high.

Arcadia would become Zimbabwe’s third lithium producer, after the Premier African Minerals-owned Zulu lithium project near Fort Rixon and Bikita Minerals in Masvingo.

Zimbabwe is already Africa’s largest lithium producer and fifth largest in the world after producing 900 tonnes in 2015. Bikita holds the world’s largest known lithium deposits, estimated at 11 million tonnes.