Gold project sell off to boost Prospect’s balance sheet

TINASHE MAKICHI 


Australia listed resources firm, Prospect Resources, says the disposal of its gold project in Penhalonga, Manicaland, will strengthen its balance sheet.

Prospect Resources is selling off its Penhalonga gold project to Luzich Partners LLC, a United States based investment firm, for US$1m.

The two parties have entered into a binding term sheet.

Apparently, Luzich has since paid US$200 000 non-refundable deposit and is undertaking due diligence on the asset.

Luzich is now expected to pay the balance of US$800 000 within 180 days of the date of the agreement.

However, payment of the US$800 000 is subject to results of the due diligence currently being undertaken.

If it’s satisfied with the investigations, Luzich will pay the balance.

“The funds received (the disposal of Penhalonga gold project will) strengthen the company’s balance sheet at a time when sentiment in the lithium market is improving and the opportunity for Prospect to become the next producer in the market is presenting itself,” Prospect’s managing director, Sam Hosack said.

Proceeds from Penhalonga gold deal, a project which is located in the Mutare Greenstone Belt which extend eastward into Mozambique and considered to be one of the richest gold greenbelts  in Zimbabwe, is expected to give fresh impetus to the development of  its flagship project in Zimbabwe, the Arcadia Lithium project, located 38 kilometres  east of the capital Harare.


The development is expected to maximise Prospect’s shareholder value.
It will also strengthen the lithium developer’s financial position.

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