Prospect Resources Ltd (ASX:PSC) has received strong support from investors for its growing lithium portfolio in Zimbabwe.
The company has commitments to raise $14 million through the issue of 280 million shares at $0.05, subject to shareholder approval.
The extraordinary general meeting is to be held on 22nd July 2016.
Shareholders will also vote on the issue of up to 250 million shares to sophisticated investors at no less than $0.03.
Hugh Warner, chairman, commented:
“The strong demand from Chinese sophisticated investors, including those within the lithium battery production cycle, is a positive endorsement for PSC, its African based management team and directors and of course the quality of our project portfolio.
“We are looking forward to developing strong relationships with our future end users and to be able to fast track the development of our assets with a strong balance sheet.”
Zimbabwe lithium
Zimbabwe is well known for its lithium deposits, and history of production.
Prospect Resources is now funded to fast track drilling at the Arcadia Lithium deposit, located 35 kilometres from Harare.
The project hosts the Arcadia Lithium Deposit, which is a historically producing mine and has an initial exploration target of 15-18 million tonnes at 3-5% lithium.
The new funds raised will also be allocated to accelerate mine design, plant design and feasibility studies, while allowing the company to order long lead time items.
Adding further interest, Prospect Resources recently pounced on an option to acquire the God’s Gift Lithium deposit, also within Zimbabwe.
The God’s Gift Lithium claims have a long history with intermittent production.
They were first pegged for beryl in 1952. From this date until 1992, a total production of 315 tonnes of beryl, 2.8 tonnes of tantalite and 17 tonnes of cassiterite was declared.
Analysis
Today’s cash raising highlights the support investors are showing for Prospect Resources lithium strategy in Zimbabwe.
The company has focused on acquiring projects with a history of lithium production.
With the use of modern drilling techniques, the results from the upcoming program will be highly anticipated.
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