Join our daily newsletter At The Bell to receive exclusive market insights
- Lithium explorer Prospect Resources (PSC) has entered a two-day trading halt as it prepares to tap investors for some fresh capital
- The company is putting its shares on pause until Wednesday, October 14
- Prospect is yet to reveal the details of the raise, including how much it plans to raise and at what price
- The company is working hard to unlock the value of its flagship Arcadia Lithium Project in Zimbabwe
- Recently, the company locked in a major offtake deal with Belgian materials distributor Sibelco
- According to prospect, the 700,000-tonne, seven-year offtake deal is the largest ultra-low iron petalite offtake agreement in the world
- Shares in Prospect last traded for 19 cents each on Friday afternoon
Lithium explorer Prospect Resources (PSC) has entered a two-day trading halt as it prepares to tap investors for some fresh capital.
The details of the capital raise — including how much the company plans to raise and at what price — are yet to be announced, but Prospect is putting its shares on pause until Wednesday, October 14 as it irons out the details.
The company’s flagship operation is the Arcadia Lithium Project in Zimbabwe. Prospect has hit some major milestones for the project over the past several months, among which includes a major offtake deal with Belgium-based materials distributor Sibelco.
According to Prospect, the 700,000-tonne, seven-year offtake deal is the largest ultra-low iron petalite offtake agreement in the world.
On top of this, Prospect signed a memorandum of understanding (MoU) with Uranium One in December last year for a major potential purchase deal.
Depending on the outcome of the MoU, Uranium One plans to either invest in or acquire Prospect or its Arcadia project in order to lock in more the half of Arcadia’s spodumene offtake.
In late-September 2020, Prospect said these discussions with Uranium One are progressing well.
Taking a look at Prospect’s financial position, the company posted an annual loss after tax for the 2020 financial year of $4.6 million — roughly 19 per cent better than the 2019 financial year’s $5.7 million loss.
However, Prospect had around $3.2 million in assets at the end of June, of which $1.7 million was made up of cash and cash equivalents.
As such, the upcoming capital raise may come as no surprise to shareholders as Prospect works to unlock the value of Arcadia.
At the end of September, Prospect Managing Director Sam Hosack said the events of 2020 have delayed the development of Arcadia, but the company is still well-placed for success.
“While we remain vigilant about the short term market outlook, our long term view remains positive and we are well placed to meet demand for the lithium the world needs well into the future,” he said.
Shares in Prospect last traded for 19 cents each on Friday afternoon. The company has a $54.33 million market cap.
