The new shares will be issued on Monday, January 20 with the proceeds of the placement to be spent towards working capital.
Arcadia Lithium Project advancement
Executive chairman Hugh Warner said, “The March 2020 quarter has a number of key initiatives with a clear focus on advancing the Arcadia Lithium Project through:
- Off-take discussions of the premium ultra-low iron petalite product for supply into Europe, Japan and South Korea;
- Discussions with Uranium One Group; and
- Project finance discussions with AFREXIM Bank.”
Shareholder rights issue
While the company previously advised of its intention to offer a rights issue to shareholders, it was determined that a small placement was a better-suited funding mechanism.
This is due to the rapid rise in Prospect’s share price over the last 30 days, which has seen an increase of 53% as well as the expected continued revaluation as a result of the positive global sentiment for lithium.
It was deemed that fixing a rights issue price now may mean a significantly larger dilution to shareholders who are not able to participate in the rights issue due to financial reasons or their jurisdiction.