Prospect Resources Ltd (ASX:PSC) has assayed samples of up to 4.37% lithium in its first phase of channel chip sampling at the Arcadia lithium project in Zimbabwe.
The company has also received commitments to raise an additional $2 million, increasing the recent placement raising to $16 million from $14 million.
Funds will be partly used to fast track the exploration and development of the recently acquired Arcadia project.
Result from the first phase of channel chip sampling completed since Prospect’s recent acquisition showed 102 of the 207 assayed samples yield lithium grades of over 2%.
The results of 168 samples and 4 drill holes are pending.
Channel chip sampling results
The first phase of channel chip sampling collected 207 samples grading up to 4.37% lithium from the weathered faces of the 1960s Arcadia pit.
Results were as follows:
- 6 samples returned over 4% lithium;
- 22 samples returned over 3% lithium; and
-74 samples returned over 2% lithium.
A total of 375 samples were collected with results of the final 168 samples still to be received.
The samples were collected from one to two metre intervals in continuous traverses on the central
eastern side of the historic Arcadia pit face.
Prospect recently secured commitments to raise $14 million through the issue of 280 million shares priced at $0.05.
The company has now received further commitments to issue an additional 40 million shares priced at $0.05 to raise an additional $2 million subject to shareholder approval.
Strong support was received from sophisticated and professional investors for Prospect’s growing lithium portfolio in Zimbabwe, especially from Chinese investors.
Use of funds
The $16 million in funds raised will be used to:
- Fast track drilling at the Arcadia Lithium deposit;
- Accelerate mine design, plant design and feasibility studies for the Arcadia Lithium deposit;
- Enable the company to order long lead time items of plant for the Arcadia Lithium deposit;
- Fast track exploration at the God’s Gift Lithium deposit;
- Accelerate gold production at the Gwanda East gold camp;
- Provide the company with capacity to make additional strategic acquisitions, particularly within the
lithium, graphite and cobalt sectors; and
- Supplement general working capital.
The channel chip sampling taken from faces at the Arcadia pit confirm the potential for high grade economic lithium mineralisation.
With four drill holes also now completed and assays pending, Prospect is highly leveraged to lithium exploration success.
These indicative sampling results continue to be in line with expectations from historical data at the previously mined lithium deposit.
The additional funding support, which raises the placement raising to $16 million exhibits Prospect’s investor support.
Having recently secured a second option to acquire the God’s Gift Lithium Deposit, which would grow the company’s lithium portfolio in Zimbabwe, the company now has a variety of exploration targets to produce news flow from.
Prospect's share price is up over 14 times year to date, currently trading at $0.071.
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