AUSTRALIA Stock Exchange (ASX)-listed mining firm, Prospect Resources is to sink a further US$5 million into Arcadia Mine following an overwhelming response to its fundraising initiative announced last week.
Arcadia is one of the most promising lithium projects in Zimbabwe, where at least four multinationals are at various stages of developing mines following a boom in demand on the international markets in the past six years.
Altogether, the mining houses are said to require about US$300 million to bring their operations to full capacity.
Arcadia has been under development for about three years.
The fresh capital, said by Prospect managing director Sam Hosack to be targeted at scaling up implementation of several ongoing projects, brought to about US$11 million in funding raised for Zimbabwean projects by Australia-based resources firms within one month.
A few weeks ago, Invictus Energy raised about US$6 million for its oil and gas exploration project in Muzarabani, about 300 kilometres north east of Harare.
Invictus has been exploring the oilfields since 2015.
Hosack said following last week’s cash call, Prospect received subscriptions for approximately 41,9 million new ordinary shares at A$0,155 (Australian dollars) per share to raise A$6,5 million (about US$5,05 million).
In a shareholder update released after the transaction, Hosack said Prospect was “pleased to have received such strong support from our largest shareholder and also welcome a number of new domestic and international institutional investors onto the Prospect register”.
“The funds raised will be used to complete the…acquisition of a further 17% interest in the Arcadia lithium project, as well as advance the development funding process following the optimised feasibility study and pilot plant operation,” he said.
Prospect halted trades on the Australian bourse on Tuesday last week amid speculative reports that it was on the market scouting for fresh funding for the Zimbabwean project.
For Harare, the exciting news would be the entry of new investors into Prospect, which demonstrates positive investor sentiment about the resource.
Zimbabwe, which hopes to rebuild its flagging economy around a stronger mining industry, had been keenly following developments at the two mining assets in addition to several new projects already underway.
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.
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 feasibility study should assist in the process of securing funding for the Arcadia project. Newsday