Prospect Resources Ltd (ASX:PSC) has received strong investor demand in a heavily oversubscribed placement at $0.014 per share to raise $2.67 million.
Funds will be used to fast track drilling at the Arcadia Lithium project, which is located 35 kilometres from Harare in Zimbabwe.
Arcadia is both shallow and high grade with the pegmatite extending over a 1,500 metre strike length.
The project hosts the Arcadia Lithium Deposit, which is a historically producing mine and has an initial exploration target of 15-18 million tonnes at 3-5% lithium.
Drilling in 1969 and 1981 confirmed the pegmatite extends at least 1,500 metres along strike with grades of 3.5-5.5% lithium.
Zimbabwe is a proven jurisdiction for lithium production having been the 5th largest global producer at its peak.
Funds will also be allocated to accelerate gold production at the Gwanda East gold camp, south east of Bulawayo, and to supplement general working capital.
Hugh Warner, chairman, commented:
“The strong demand from this capital raising is an endorsement for PSC and the quality of its project portfolio.
"We are excited to commence the exploration program with a healthy balance sheet with a view to creating value for PSC and its shareholders."
Gwanda East gold project
The Gwanda East gold project in Zimbabwe produced its first gold recently and is PSC's most advanced gold project.
The project has a number of historically producing gold mines and ore from the Prestwood Main mine is currently being stockpiled ready for processing.
The short term production plan is for 3 shafts within the project to be extracting ore.
The cash flows generated from this production will help to propel growth in gold production and lithium exploration and development.
PSC recently acquired an option giving it a 63% interest on the Arcadia V lithium claims and applications covering the Arcadia Camp in Zimbabwe.
The composite grade of the Arcadia claim is estimated at 5% lithium.
PSC has 3 gold projects in Africa; the Gwanda East and Penhalonga Gold projects in Zimbabwe and the recently acquired Moba Gold Project in the Democratic Republic of Congo.
Prospect Resources has a dual lithium and gold focus, which investors have embraced, shown by the heavily oversubscribed placement.
Shares in the company have more than tripled since the start of April.
Expected news flow over the coming months:
- Updates on pre-drilling lithium exploration such as mapping and channel sampling;
- Updates on gold production at Gwanda East;
- Potential securing of additional lithium projects;
- Securing of tenements currently under application for the remainder of the Arcadia Camp; and
- Drilling at Arcadia scheduled for July.
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