Prospect sets eyes on new lithium projects after shareholders approve US$378m Arcadia mine takeover

Lithium carbonate at Arcadia's pilot plant

Prospect Resources has begun planning for its next project after shareholders on Friday approved the sale of the company’s 87% stake in Arcadia lithium mine to China’s Huayou International.

Huayou, one of the world’s biggest companies in the battery metals business, announced in December that it would buy Prospect Minerals, the Arcadia developer, for a total of US$422 million. Prospect’s share of the deal is US$377.8 million.

Prospect now plans to use part of the proceeds of the sale to explore for fresh lithium projects in Zimbabwe and abroad, chairman Mark Wheatley told shareholders at a meeting Friday.

Shareholders approved the transaction after Huayou also received all the approvals it needs from Chinese regulators to go ahead with the deal. In Zimbabwe, Prospect will inform the Zimbabwe Investment Development Agency of changes to the ownership of the project, which has Special Economic Zone status.

“Prospect is pleased to advise that at the Company’s Extraordinary General Meeting held earlier today shareholders approved the Transaction by passing the resolution set out in the Notice of Meeting dated 25 January 2022 by way of a poll,” Prospect said.

Prospect says it expects the transaction to be done in late Q1 or Q2 2022.

In China, according to Prospect, all “regulatory approvals required under conditions precedent to the Transaction have been received and those conditions are now satisfied”.

Wheatly said Prospect is now looking to develop its next project.

“Prospect also plans to retain a cash balance to progress other battery and electrification metal projects in Zimbabwe, and evaluate, acquire and advance new battery and electrification metal projects globally. Prospect currently estimates it will retain between US$30 million and US$60 million,” Wheatly said.

“The team has already begun a project generation exercise focused on battery and electrification commodities, initially focused on Zimbabwe and other sub–Saharan African countries.”

In 2018, Prospect acquired Lipropeg, a set of claims near Bindura, where it has been exploring for lithium.

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