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If you want proof African lithium jurisdictions can compete with those of Western Australia and Canada, look no further than Prospect Resources (PSC).
Boasting three projects in Zimbabwe, Zambia and Namibia, Prospect is cashed up, disciplined, and bullish on lithium.
And, to quote Prospect Resources CEO Sam Hosack – the company is in deal mode.
The company this week kicked off Phase 2 drilling at its Namibian lithium project – but more on that shortly.
Who are Prospect Resources?
Prospect Resources PSC) is an Australian-based mineral exploration and development company focused on realising opportunities in the decarbonisation metals space.
That includes lithium for Electric Vehicle (EV) batteries, and REEs which everything from wind turbines to MRI machines require.
Copper’s also on the radar – and that certainly should be called an electrification metal.
“We are bullish on the investment thesis behind lithium,” Prospect Resources CEO Sam Hosack said.
“[We’re looking at] rare earths as well – we have some capacity there. But lithium is our wheelhouse.”
Investors seeking to verify Prospect’s business acumen should look no further than its sale of the Arcadia Mine in 2022.
Arcadia sale proves potential
From 2016, Prospect was focused on the exploration and development of its flagship Arcadia Project located in Zimbabwe.
Prospect progressed Arcadia from its initial discovery through resource definition, definitive feasibility study, offtake agreements, pilot plant operation and financing.
Prospect received a highly attractive offer from Zhejiang Huayou Cobalt to sell Arcadia, which was ultimately accepted.
The sale of Prospect’s 87% interest in Arcadia for approximately US$378 million cash took place in April 2022.
Clear smart move
All in all, Prospect developed that project for A$40 million, then sold it for US$378 million – a clear win.
At the time, that value proposition was too tempting – but Prospect Resources isn’t a project developer as a rule. It fully intends to be an owner-operator.
Prospect is now on the hunt for an advanced battery metals project to buy into – and Australia’s an option.
“We are looking for an advanced project to bring into our pipeline,” CEO Sam Hosack said, outlining his experience as a developer behind numerous projects.
“We are credible developers who just happen to be good explorers.”
The search begins
Prospect’s management team state the company holds an enviable cash position compared to many other junior exploration companies.
This is due to its retention of funds following the sale of the Arcadia Project in 2022.
As of mid-November, Prospect is sitting on A$24 million in cash.
The company has a clearly defined strategy to acquire and develop an advanced stage battery – or electrification commodity project – in the near term.
Prospect is seeking to add growth to its books, using the sales from Arcadia, to manufacture a strong tailwind through 2024.
Existing projects prove quality
Prospect has a portfolio of three quality exploration assets across Sub-Saharan Africa and is in the market for another, more advanced project.
The company is also keeping its eyes on an Australian onshore project, while plugging away at its existing projects.
In the meantime, the company continues to develop its existing projects.
Step Aside Project
In Zimbabwe, 8 kilometres north of the company’s former Arcadia Lithium Project, lies the company’s Step Aside project.
That project overlies some 100 hectares of the prospective Harare Greenstone Belt.
The key area of interest at the Step Aside Project? The new high grade lithium discovery and potential feeder zone at WinBin, and a swarm of mineralised pegmatites, geologically mapped to intrude the greenstone host rock sequences, which lie to the north of it.
The Company completed two phases of RC and diamond drilling programmes in the last 12 months, which generated high-grade lithium intersections and a refined understanding of the deposits.
This all led to an expanded Stage 3 drilling programme which commenced in July 2023.
Key intercepts to date from Step Aside include:
- 33m @ 1.18pc Li2O from 81m (WinBin)
- 23.1m @ 1.03 pc Li2O from 45m (WinBin)
- 7.4m @ 1.28pc Li2O from 43.6m (Pegmatite E)
- 6.1m @ 1.49pc Li2O from 82.2m (Pegmatite D)
- 9.0m @ 1.02pc Li2O from 38.0m (Pegmatite D)
- 8.0m @ 1.09pc Li2O from 53.9m (Pegmatite D)
- 5.62m @ 1.48pc Li2O from 69.4m (Pegmatite C)
- 6.68m @ 1.17pc Li2O from 37.1m (Pegmatite C)
Some 3,750m of drilling has been clocked with 1,250m left for the current Phase 3 exploration campaign.
There are two diamond drill rigs on site targeting extensions to the WinBin target area of interest and additional lithium mineralisation delineated to the north.
Prospect Resources eagerly awaits assays from the new drilling targeting the WinBin find, especially given visual confirmations of “great looking spodumene crystals,” as Hosack put it to The Market Herald.
Watch this space.
Omaruru Lithium Project
The Omaruru Lithium Project is located 20km east of the town of Karibib in Namibia.
Namibia is an interesting beast as far as common perceptions of Africa goes. One Prospect Resources executive told The Market Herald that its road system is better than Australia’s.
Developed by South Africa in the mid-to-late 20th Century, the roads in Namibia were built to European specifications – getting materials around the country is certainly no issue.
Namibia is also the fourth largest producer of non-fuel minerals in Africa and a leading development jurisdiction boasting political stability, security, a strong rule of law and an assertive development agenda.
The Omaruru project contains 60 visible outcropping pegmatites with potential further lithium-enriched deposits “blind” to the surface in this region.
Exploratory soil sample programmes completed by Prospect through 2023 outlined coherent anomalies of lithium pegmatite pathfinder elements that led targeted drilling to intersect thick and high-grade lithium hits.
Prospect Resources currently holds a 40 per cent interest in the project.
Based on strong lithium results, the company has now decided to move ahead to a 51 per cent earn-in, giving it a better shot once at majority control.
The objective of the Phase 2 exploration programme is to find extensions of existing or newly defined, lithium-enriched pegmatite deposits, focusing on targeting higher grades and potential delineable lithium mineral resources.
Once this is locked in – the company is targeting a maiden JORC resource for lithium at the project in 2024.
Kesya Rare Earths Project
That brings us to Zambia – home to Prospect’s REE project called Kesya.
In May 2023, Prospect entered into an option agreement with Antler Gold which allows Prospect to progressively acquire a 51 per cent interest in the project.
If results are promising, that could be beefed up further to 85 per cent.
Kesya is a highly prospective, intrusive carbonatite complex within a licence area of 1,053 hectares. Located near the town of Kafue in southern Zambia, the project area is approximately 90km south of Zambia’s modern capital city, Lusaka.
The rare earth element (REE) mineralisation defined at Kesya is contained within the minerals monazite and bastnaesite and is strongly enriched in the valuable elements neodymium and praseodymium (NdPr).
Neodymium and praseodymium are also high-value tech metals valued for their magnetic qualities – often carrying a premium at market.
Those two high-value metals average 29 per cent of the basket of rare earth oxides on-site from rock chips taken to date.
“High-value rare earth mineral resources are globally recognised as critical inputs into alloys for the manufacture of strong permanent magnets used in powerful motors,” CEO Sam Hosack said.
Results from the rock chip surface sampling returned consistent and highly anomalous rare earth values up to 0.66% total rare earth oxide content, along with low levels of uranium and thorium.
Low thorium levels are highly desirable, given radioactivity of the ore can complicate some shipping procedures.
Kesya offers outstanding prospectivity to deliver a significant new discovery for Prospect, expanding the battery minerals focus and footprint in Sub-Saharan Africa.
Quality assets, quality search
Prospect Resources has a busy year ahead of it.
Targeting a maiden JORC resource at Omaruru, and developing three projects across Africa, whilst seeking an additional, more advanced project will keep Prospect very busy during 2024.
And if the right offer comes along, Prospect Resources – listed on the ASX – could also move into Australia for the first time.
“We’re at the start of rebuilding our business after the sale of Arcadia, and with the Company’s credentialled team, reputation and experience, we are ready to make some serious headway next year,” CEO Sam Hosack surmised.
By selecting African jurisdictions with attractive mining codes for foreign investment and regional stability, Prospect Resources is proving that financial discipline and wise selection can make Africa a very desirable destination to undertake its business.
Prospect’s (PSC) share price last traded at 10c.
