Prospect Resources raises $18m to develop Arcadia lithium project
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Funds raised will help bring the flagship Arcadia Lithium Project in Zimbabwe into development as quickly as possible.
Prospect Resources has raised A$18 million in new equity proceeds through a placement of 45 million shares at 40c per share.
Strongly supported by new Australian and international institutional investors, as well as Prospect Resources’ (ASX:PSC) largest shareholder Eagle Eye Asset Holdings, funds will be used to advance development at the Arcadia Lithium project through front end engineering and design (FEED), advance the strategic partnership process, and undertake regional exploration.
The company says the placement kick starts the process of funding the project to bring Arcadia into production as quickly as possible, while also strengthening the PSC’s balance sheet to assist in securing a strategic partner on the best possible terms.
PSC managing director Sam Hosack said: “We believe the size and depth of the interest received for this raising is a robust endorsement of prospect’s management team and development strategy for the Arcadia Project.
“We are working hard to complete the direct optimised feasibility study on the Arcadia Project during the current quarter.”
As previously flagged, Hosack said the direct development route to 2.4 Mtpa throughput is “the key focus of Prospect and the counterparties engaged” in the strategic partnership process.
“This placement provides us the flexibility to progress the project, select the best possible partner while also allowing us to pursue growth opportunities for REE and lithium resources, particularly if we were able to secure additional feedstock for Arcadia’s future,” he said.
The issue price of A$0.40 per share represents a 9.1% discount to the last close price on October 26, a 12.8% discount to the 5-day volume weighted average price (VWAP) at close on October 26, and an 11.6% discount to the 10-day VWAP at close on October 26.
Canaccord Genuity (Australia) and Foster Stockbroking acted as joint lead managers and bookrunners to the placement.
Settlement of the new shares issued under the placement is expected to occur on Thursday November 4, with quotation on the ASX expected to occur on Friday November 5.
This article was developed in collaboration with Prospect Resources a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.