Published: 2 hours ago

Australian mining company, Prospect Resources Limited, has agreed to sell its Step Aside Lithium Project in Zimbabwe to Fatima Resources Pty Ltd for up to US$2.2 million. The decision to offload the project comes as Prospect shifts its focus towards advancing its copper assets in Zambia, particularly the Mumbezhi Copper Project.

The Step Aside Lithium Project, located 8km north of Prospect's previously owned Arcadia Lithium Mine, was acquired by the company in March 2022. The Arcadia mine, one of Zimbabwe's largest lithium projects, was sold to Chinese battery materials manufacturer Zhejiang Huayou Cobalt Co Ltd in 2022 for US$422 million, a deal that fully covered the acquisition cost and related liabilities, leaving Prospect with a net payment of US$378 million.

Despite the discovery of high-grade lithium deposits at Step Aside in May 2023, Prospect has decided to divest the project. The sale is part of a broader strategic shift by the company towards copper exploration and development in Zambia, where it sees significant growth potential.

In a statement issued by Prospect, the company confirmed it had executed a share sale and purchase agreement with Fatima Resources Pty Ltd, a private company familiar with operating in Zimbabwe. The deal involves the sale of Prospect's Singapore-registered subsidiary, Promin Resource Holdings Pte Ltd, which holds a 90% interest in the Step Aside Lithium Project.

Under the terms of the agreement, Prospect will receive an initial payment of US$850,000 upon completion of the transaction. An additional US$150,000 will be payable six months after the deal's completion. The agreement also includes a further payment of up to US$1.2 million within 24 months, contingent on Fatima Resources achieving certain milestones, such as entering into binding offtake agreements, upgrading the project's mineral resources, or securing a future sale where the project's value exceeds US$5 million.

"The future stewardship of Step Aside is in good hands, and we look forward to seeing how far the project can continue to grow," said Sam Hosack, Prospect's managing director and CEO. "Meanwhile, we are pleased to simplify our corporate structure and reduce ongoing overhead costs."

The Step Aside Lithium Project is located within the Archaean Harare Greenstone Belt, approximately 35km east of Harare, Zimbabwe's capital. The project spans approximately 100 hectares and is known for its coarse spodumene mineralisation, with minor petalite present. This mineralisation is hosted in pegmatite bodies within the Zimbabwe Craton, a key geological feature of the region.

Prospect Resources has enlisted Nurture Capital Zimbabwe, a respected financial services firm based in Harare, to manage the sale process. Nurture Capital offers asset management, private equity, and investment advisory services across Sub-Saharan Africa.

The proceeds from the sale of the Step Aside Lithium Project will be directed towards further developing Prospect's copper portfolio in Zambia, with a particular focus on the Mumbezhi Copper Project, located in the northwest of the country. Prospect is in the process of completing Phase 2 drilling at Mumbezhi, ahead of a planned update to the project's mineral resource estimates later this year.

"We remain focused on delivering further resource growth at Mumbezhi, and the sale of Step Aside will help support the expansion of our Zambian copper footprint," Hosack added.

With the sale of Step Aside, Prospect Resources will no longer have active projects in Zimbabwe, marking the end of its lithium ventures in the country. However, the company is optimistic about its future prospects in Zambia, where copper exploration and development remain a key part of its strategic growth plan.
- Newsday

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