AUSTRALIA Stock Exchange (ASX)-listed resources firm halted trading on Tuesday amid reports the firm has lined up a capital raising deal.
The firm has been developing Arcadia lithium mine in Zimbabwe since 2018.
Tuesday’s development came a few weeks after Invictus Energy, which is also pursuing the development of a potentially lucrative oil and gas project in Muzarabani, about 300km northeast of Harare, briefly suspended trading at the same bourse.
Invitus announced afterwards that it had raised US$6 million to press ahead with the venture, one of the latest energy development projects being pursued by multinationals in southern Africa.
But hours after the ASX announced Prospect’s suspension, which will run until Friday, there were moves to inject fresh capital into Arcadia.
“The securities of Prospect Resources Limited (PSC) will be placed in trading halt at the request of PSC, pending it releasing an announcement,” ASX adviser for listings compliance in Perth, Belinda Giles, said.
“Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Friday, 16 April 2021 or when the announcement is released to the market,” Giles said.
Zimbabwe, which hopes to rebuild its flagging economy around a stronger mining industry, had been keenly following developments at the two assets in addition to several new mines under development in Zimbabwe.
Apart from unlocking employment opportunities, the mines are expected to help Harare achieve its ambition to build a mining sector that turns over US$12 billion per annum.
The sector currently generates about US$2 billion yearly.
A few weeks ago, Prospect said it had appointed Perth-based engineering consulting group, Lycopodium Ltd, to complete the feasibility study at the Arcadia project, 38km east of Harare.
That could explain why the firm had seen it fit to inject more capital at Arcadia.
Prospect said Lycopodium’s primary scope of work was the supervision of metallurgical test works and the design of its processing plant and related infrastructure.
This will include site power system and on-site water treatment and distribution facilities.
The company is already discussing with its existing offtake partners and institutional financiers with respect to financing pathways for the staged development of Arcadia.
It is also in the early stages of discussions with multiple strategic partners regarding joint development structures.
The firm said it believed that the use of a tier-one engineering firm for the optimised feasibility study should assist in the process of securing funding for the Arcadia project.
Prospect managing director Sam Hosack said the staged development plan would reduce the time required to kick-start production by leveraging on lower capital expenditure and funding requirements.
He said this would also enable the firm to map out a clear expansion plan in line with market growth.
“This development strategy allows project execution and market integration risks to be minimised while accelerating the pathway to first cash flow,” Hosack said. Prospect Resources’ share traded at 18,5 cents before trading was halted on Tuesday. Newsday