This product is classified as 'very high risk' in nature due to its location and geopolitical situation of the region. Finfeed advises that extra caution should be taken when deciding whether to engage in this product, however if you are not sure whether it is suitable for you we suggest you seek independent financial advice.
Prospect Resources Ltd (ASX:PSC) todayannounced that it has completed a share placement to Sinomine Resources,following shareholder approval. PSC received A$10,000,000 from Sinomine for166,666,667 PSC shares at 6c per share - a premium to the original placingprice of 5c per share.
PSC also announced that it has favourablyrenegotiated terms of a conditional offtake agreement between its Zimbabweansubsidiary, Examix Investments Limited and Sinomine Resources in respect of thespodumene and petalite pricing formula that increased the valuation (NPV) ofthe Arcadia Lithium Project by US$61m, from US$340m to US$401.5m.
The spodumene and petalite pricing formula,consistent with other industry contracts, is linked to the lithium carbonateprice.
As with all minerals exploration, success isnot guaranteed - consider your own personal circumstances before investing, andseek professional financial advice.
Further amendments to the offtake agreementinclude a requirement for Sinomine Resource to prepay US$10,000,000 with thesefunds being payable upon installation of the ball mill at the project.
Get the latest articles straight to your inboxkeep me postedPSC has also reduced the offtake volumes to besupplied to Sinomine Resource to approximately 70% of earlier agreed volumes.Offtake volumes are now classified as tonnes of spodumene, petalite and lithiaunits, giving PSC the flexibility to alter supply quantities of spodumene andpetalite, provided the total lithia units supplied are satisfied.
The surplus is expected to give PSC flexibilityto negotiate offtake terms with other lithium downstream customers and enable itto divert additional spodumene and petalite volumes to a proposed companyowned, lithium carbonate facility.
PSC also confirmed that it has cancelled thebuild and finance component of the original transaction. This enables thecompany to dictate the build timetable and process which will enable PSC tocommence construction of the mine and process facility sooner and potentiallybring forward revenues.
All necessary mining licences and environmentalapprovals are in place to commence construction of the mine, process facilityand tailings dam, while the company plans to enter into first engineeringcontracts and pioneer mine strip and tailings dam construction contracts sometimethis month.
Importantly, by taking control of the buildprocess, Prospect can ensure a greater local Zimbabwean input with respect tosuppliers and workers. We are committed to building Africa's largest lithiummine with, where possible, a Zimbabwe sourced workforce.
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