Prospect Resources’ shareholders share proceeds of Arcadia sale

PROSPECT Resources is set to distribute close to 95 percent of the net proceeds to shareholders from the sale of the Arcadia Lithium project in Goromonzi, Mashonaland East to Huayou International Mining.

In April this year, Prospect completed the sale of its 87 percent interest in the Arcadia Lithium project to Huayou.

In a statement, Prospect, which sold the lithium project for US$377,8 million, has converted the funds into Australian dollars, receiving A$465,6 million at an average AUSD: USD conversion rate of 0,7365.

The Prospect board has determined to distribute the vast majority of the Arcadia transaction proceeds to shareholders via A$0,96 per share distribution.

This planned distribution comprises an unfranked dividend component of A$0,79 per share (Special Dividend) and a capital reduction component of A$0,17 per share (Capital Reduction) that has become effective today.

Prospect managing director and chief executive officer Mr Sam Hosack, commented: “We are pleased to have completed the Arcadia transaction. The transaction realised a significant return for shareholders with net cash proceeds received by Prospect of A$466 million.

“After payment of transaction costs, Prospect is preparing to distribute almost 95 percent of the net proceeds from the transaction to its Shareholders, with approximately A$34 million to be retained for future activities.

“The quarter was one of agility, as the team swiftly transitioned from Arcadia to new project generation.”

He said the success and publicity associated with the Arcadia transaction has resulted in an increase in opportunities being presented to Prospect, which the business development and exploration teams were evaluating.

“It was also a period of volatility in equity markets, something which provides further opportunity for Prospect given its strong financial position and extensive development expertise.

“We are seeking to grow value in Prospect 2.0 through the process of identifying, assessing, investing and then advancing battery and electrification metals opportunities,” said Hosack.

Following capital reduction approval by shareholders, eligible shareholders will on Thursday receive the A$0,96 per share cash distribution (comprising the Special Dividend and Capital Reduction), which will be distributed on August 4, 2022.

Meanwhile, Prospect said its exploration team continues to develop a pipeline of prospective battery and electrification mineral targets.

“The success and publicity associated with the Arcadia transaction has resulted in an increase in opportunities being presented to Prospect.

“Project generation activities are advancing well, and the company is well capitalised to identify, assess, invest and advance projects that have the potential to meet scale and grade criteria.

“Business development activities during the quarter comprised evaluation of a number of projects, spanning various jurisdictions, commodities and stages of development.

“Although the projects assessed presented potential opportunities, they did not meet Prospect’s internal project assessment criteria,” said the mining group.

Presently, the mining group is involved in discussions with various parties and is focusing its resources on the highest potential and best value opportunities.

Prospect’s business strategy is to be a battery and electrification minerals focused explorer and developer.-ebusinessweekly