Shareholders to cash in as Prospect sells 87% of Arcadia to Chinese lithium-ion battery giant, Zhejiang Huayou Cobalt Co
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The transaction marks the next step in the company’s trajectory to a developer of lithium, battery, and electrification projects.
Prospect Resources (ASX:PSC) has completed the sale of its 87% interest in the Arcadia Lithium Project, 38km east of Zimbabwe capital, Harare, to new energy giant Zhejiang Huayou Cobalt Co.
The US$377.8 million transaction followed the payment of US$26.8 million in Zimbabwean capital gains tax and US$8 million to Sinomine Resource Group – relating to the offtake agreement between Prospect and Sinomine.
Around US$342.9m was received on completion of the transaction.
PSC says it intends to distribute a substantial portion of the net proceeds from the transaction to its shareholders via a cash distribution, which will likely include a capital reduction component and an unfranked dividend component.
PSC managing director and CEO Sam Hosack said without the support of the Government of Zimbabwe the company would not have been able to complete the transaction, confirming that Zimbabwe is open for business as a premier jurisdiction for the burgeoning lithium industry.
“The transaction, being the culmination of years of effort progressing and developing the Arcadia Project to this point is a testament to the skills and expertise of the Prospect team,” he said.
“We are firmly focussed on the path ahead, to build the next iteration of Prospect, a developer of lithium and battery and electrification metals projects.”
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.