Prospect Resources (ASX:PSC) to acquire 51pc stake in Namibian lithium project

• Prospect Resources (PSC) secures an agreement with Osino Resources to acquire 51 per cent interest in the Omaruru lithium project, Namibia
• Under phase one, Prospect needs to spend US$1.56 million (A$2.4 million) to earn a 40 per cent and a further US$560,000 on exploration under phase two to earn the other 11 per cent
• The agreement is consistent with the company’s goal of becoming a leading battery and electrification metal-focused developer of near-term production opportunities
• Prospect will undertake around 3000 metres of drilling across two targets within the Omaruru project
• Shares in Prospect Resources are up 11.7 per cent, trading at 10.5 cents at 3:41 pm AEST

Prospect Resources (PSC) has secured an agreement with Osino Resources to acquire a 51 per cent interest in the Omaruru lithium project, Namibia.

The company said there is an option to potentially increase its interest up to 85 per cent.

The project is centred on the village of Wilhelmstal, east of Karibib in Namibia and covers 175 square kilometres with numerous lithium, tin and rubidium targets including 60 lithium-caesium-tantalum (LCT) pegmatite outcrops visible at surface.

Under the agreement, the company will earn-in an interest with a two-phase approach. To gain the initial 40 per cent, Prospect will need to invest US$1 million (A$1.54 million).

Under phase two, the company will need to spend US$560,000 on exploration at the Omaruru project for the other 11 per cent.

If Prospect chooses not to proceed after the first phase, or it doesn’t reach more than 50 per cent by the end of the agreement, Osino may repurchase its interest for an agreed sum.

The company believes Namibia, the fourth largest producer of non-fuel minerals in Africa, is underexplored for lithium and associated pegmatite mineralisation.

“Namibia is a tier-one jurisdiction in every respect – offering outstanding geological potential, high quality infrastructure, low operating costs, cheap and readily available power,” PSC Managing Director and CEO Sam Hosack said.

“The earn-in agreement with Osino Resources is consistent with the company’s broader strategic objective, which is to be a leading battery and electrification metal focused developer of near-term production opportunities.”

The first stage of exploration to be conducted by Prospect is planned to expand the reverse circulation (RC) drilling program commenced by Osino in 2020.

Prospect Resources will conduct a drilling program at Omaruru under the first stage. Around 3000 metres of drilling will be completed, mainly focused on the Karlsbrunn and Spirit targets.

Shares in Prospect Resources were up 11.7 per cent, trading at 10.5 cents at 3:41 pm AEST.