ZIMRA delays Prospect's bid to increase stake in Arcadia

Published: 17 October 2019
Prospect Resources says a Zimbabwe Revenue Authority (ZIMRA) clearance certificate is the only remaining consent required to complete the transaction of increasing its stake in Arcadia Lithium Project to 87%.

On completion, Prospect will increase its ownership in the Arcadia Lithium Project from 70% to 87% and increase its share of future revenues and profits from the Project's strong economics.

In June 2019, shareholders approved the acquisition of an additional 17% interest in the Arcadia Lithium Mine, subject to Zimbabwe regulatory approval. In July this year, the miner received the Reserve Bank of Zimbabwe approval to increase its stake in Arcadia to 87% as part of completing the transaction.

However, the company in a statement on Tuesday, said it has received all but one Zimbabwean regulatory approval – which it expects to receive in due course.

Accordingly, the company sought and was granted a waiver from ASX Listing Rule 14.7 so that it may delay the issue of the consideration shares until January 10, 2020.

The junior miner, has obtained a waiver from ASX Listing Rule 14.7 to permit the company to issue 9 479 680 fully paid ordinary shares to

Farvic later than one month after June 11, 2019, being the date shareholders approved the issue of the consolidated shares to Farvic at an extraordinary general meeting of shareholders.

Then the miner sought the waiver as it is unable to issue the consideration shares to Farvic within 1 month of the general meeting due to delays in receiving Zimbabwean regulatory approval for the underlying transaction to which the consideration shares relate.

"The reason for the delay is that transaction may only be completed with the approval of ZIMRA and the agreement was expressed to be subject to regulatory consent," it said.

"Farvic has made a submission to ZIMRA but it has not yet been granted the necessary clearances. The ZIMRA clearance certificate is the only remaining consent required to complete the transaction. The company is confident that ZIMRA will, in due course, issue the certificate.

Therefore the waiver has been granted by the ASX subject to which the consideration shares are issued no later than January 10,2020 and the terms of this waiver are released to the market immediately.

The development of miner's Arcadia Lithium Project which is located 38km outside Harare, is key to Prospect's future fortunes and will establish Zimbabwe among the top lithium producers in the world. The project is the largest lithium deposit in Africa comprising 808 000 tonnes of lithium oxide. Lithium is a soft silvery-white metal which is highly reactive and has the highest electrochemical potential of all metals, a key property in its role in lithium-ion batteries.

Prospect is progressing discussions with multiple potential financiers at a rapid pace to deliver Arcadia Lithium Project. The miner is now dual listing on ASE and Frankfurt Stock Exchange with a bid to broaden the company's exposure to European investors and potential customers.

To secure a future market for its lithium, Prospect signed an off-take arrangement with Shenzhen-listed Sinomine, who will buy 30% of Arcadia's annual production over seven years. Sinomine has already bought equity in Prospect for $10 million and is to pay a further $10 million in advance for Arcadia's lithium concentrates.

Previously Prospect Resources announced that it is selling its business in the Democratic Republic of Congo to focus on its Arcadia lithium project in Zimbabwe.
- finx
Tags: Zimra,


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