eBusiness Weekly
Golden Sibanda
Australia Stock Exchange (ASX) listed Prospect Resources has reached a conditional agreement with Farvic Consolidated Mines to increase its (Prospect) stake in the Arcadia Lithium Mine by 17 percent to 87 percent.
Under the agreement, Farvic will transfer the shares it holds in Prospect Lithium Zimbabwe (holder of the Arcadia Lithium Mine) to Prospect Minerals, a wholly owned subsidiary of the company.
In consideration for the transfer of shares in Prospect Lithium Zimbabwe (PLZ), the company will issue 94 976 800 fully paid ordinary shares to Farvic, representing a dilution to existing Prospect shareholders of 4,6 percent, and pay Farvic A$1 187 210 in cash. Upon completion of the transaction, Prospect Resources’equity interest in PLZ will increase from 70 percent. Currently, Prospect ‘free carries’ the other shareholders in PLZ to production, meaning that Prospect funds 100 percent of the project.
The shares issued to Farvic will be subject to a voluntary escrow, with 25 percent of the shares being released every six months, subject to additional escrow imposed by ASX.
The transaction is however subject to conditions precedent, including approvals of the Reserve Bank of Zimbabwe and the ASX.
Following completion of a scoping study in late 2016, Prospect completed its pre-feasibility Study in June 2017 that included declaration of Maiden Ore Reserves.
Beyond developing the Arcadia project, prospect has built a battery lithium beneficiation plant in Kwekwe.
Zimbabwe, the first African country to successfully set up a lithium-ion battery carbonate plant, is poised for a major and prominent role in the electric vehicle batteries industry.
The plant awaits commissioning by President Mnangagwa soon.
Lithium enjoys widespread commercial use in grease, dryers, air conditioners, medicines and a fast-rising call from the battery and renewable energy sectors.
Deposits in Zimbabwe are mainly found at Kamativi Mine, Bikita Mine, Zulu Project, Arcadia Lithium Project.
Last week, Kamativi Tailing Company (KTC) said initial drilling results at its lithium project in Matabeleland North has indicated that it can be commercially viable.
KTC is a joint venture between Jimbata, operating as Zimbabwe Lithium (ZLC) and Kamativi Tin Mines (KTM), a subsidiary Zimbabwe Mining Development Co.
The Kamativi tailings storage facility is a man-made deposit that was created from dumps produced from processing of tin mineralisation at the KTM. The tailings were deposited between 1936 to 1994 and are derived from the mining and processing of the tin-bearing (spodumene-bearing lithium-caesium-tantalum pegmatites.
The spodumene is the predominant lithium.
Zimbabwe also has lithium deposits in Mberengwa, Mutoko and Harare, making it richest African country with known lithium deposits.
Zimbabwe is the fifth largest producer of Lithium on the planet (right after Australia, Chile, Argentina and China). Latest data available (2016) estimates production at the level of 900 tonnes (4,791 MT lithium carbonate equivalent).
