Chronicle Editor
Oliver Kazunga, Senior Business Reporter
PROSPECT Resources has sold for US$377,8 million in upfront-cash consideration its 87 percent shareholding in Prospect Lithium Zimbabwe (Pvt) Limited (PLZ), which owns the Arcadia Lithium project near Harare.
The mining group announced yesterday that it executed a binding Share Sale Agreement (SSA) with a Chinese firm, Huayou International Mining for the sale of its shareholding in PLZ.
The transaction represents the culmination of the strategic partnership process undertaken by Prospect since August 2021.
“The company is pleased to advise that it has, through its 100 percent owned subsidiary Prospect Minerals Pte Ltd (PMPL), executed a binding SSA with Huayou International Mining (Hong Kong) Limited (Huayou), for the sale of its 87 percent shareholding in PLZ.
“Binding agreements executed for the sale of Prospect’s 87 percent interest in the Arcadia Lithium Project (Arcadia) to a subsidiary of new energy lithium-ion battery material producer, Zhejiang Huayou Cobalt Co., Limited (Huayou), for approximately US$377,8 million (A$528,4 million) in upfront cash consideration,” said the mining group.
Last month, Prospect received seven non-binding proposals for the advancement of Arcadia from a range of international parties.
Such proposals incorporated structures including development joint ventures, offtake prepayment debt funding and acquisition of Prospect’s interest in Arcadia.
Commenting on the transaction, Prospect managing director and chief executive officer, Mr Sam Hosack said his organisation was pleased with the latest development.
“The entire Prospect team is delighted with this outcome. It is the culmination of a process that gained global traction and generated inbound interest amongst potential partners for the world-class Arcadia Lithium Project,” he said.
“The Prospect board has undertaken a detailed evaluation of all proposals received through this competitive process.
“The conclusion of this evaluation is that the Huayou proposal offers a highly attractive risk-adjusted proposition for Prospect shareholders, particularly when considered against the timing and execution risks attached to development and operation of the Arcadia project either under Prospect’s ownership or in joint venture,” said Mr Hosack.
He commended Huayou for their professionalism throughout the process and in arriving at the latest commercial outcome.
“My sincere gratitude also to the Government of Zimbabwe, and all relevant ministries, departments and authorities, without whose strong support we could not have attracted a counterparty of Huayou’s standing and experience,” said Mr Hosack.
“Lastly, I would like to thank our financial and legal advisers for their hard work and diligence to-date.
“We look forward to working with Huayou and relevant stakeholders within the Government of Zimbabwe to satisfying the conditions precedent, with a view to closing the transaction in late in the first quarter or early in the second quarter of 2022,” he said. — @KazungaOliver
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