Prospect Resources closes $378 million sale of Arcadia Lithium Project in Zimbabwe

ASX-listed battery minerals company Prospect Resources has closed the US$377.8 million sale of its 87% interest in the Arcadia Lithium Project in Zimbabwe to a subsidiary of China’s Zhejiang Huayou Cobalt.

Prospect has received $342.9 million in proceeds from the deal after the payment of $26.8 million in Zimbabwean capital gains taxes, and $8 million to Sinomine for the termination of an offtake agreement.

The deal was first agreed in December 2021, when Zhejiang agreed to purchase a 100% stake in the Arcadia from Prospect Lithium Zimbabwe. Arcadia is considered one of the world’s biggest hard rock lithium resources, with an estimated 37.4 million tonnes at 1.22% lithium carbonate equivalent.

Managing director and CEO Sam Hosack said: “Huayou’s pedigree as a leading electric vehicle battery precursor producer opens up opportunities in Zimbabwe and supports our strategy both in Zimbabwe and the broader sub-Saharan region.

“The transaction, being the culmination of years of effort progressing and developing the Arcadia project to this point is a testament to the skills and expertise of the Prospect team, who are now firmly focused on the path ahead, to build the next iteration of Prospect, a developer of lithium and battery and electrification metals projects.”

The firm said it plans to distribute a considerable portion of the proceeds raised from the stake sale to its shareholders. Prospect also revealed it will spend up to $29.7 million on battery and electrification metals projects, primarily in Zimbabwe but also across sub-Saharan Africa.