AUSTRALIAN lithium developer, Prospect Resources Limited (PRL) has extended the closing date of its rights issue offer, announced earlier this month, by a week to May 11 due to the impact of COVID-19.
The rights issue offer is a non-renounceable entitlement issue of one share for every four shares held by shareholders at an issue price of AUD0.05 (3 US cents) per share. Based on the capital structure of the company as at the date of the offer, a maximum of 61 397 940 Shares would be issued to raise up to AUD3 069 897 (US$2 million) in capital.
“The company advises that it is aware that as a result of COVID-19, there may have been delays associated with postage, which has impacted the timely delivery of the prospectus and personalised entitlement acceptance form to eligible shareholders of the company,” said PRL, in a statement yesterday.
“Accordingly, the directors have resolved to extend the closing date of the offer by one week.”
On the date of the offer, PRL had 4 500 000 options on issue to be exercised prior to the record date of the offer in order to participate in the rights offer.
From the raised funds, AUD1,68 million (US$1 093 256,19) would go to project development and AUD560 000 (US$364 418,73) progression of due diligence with Afreximbank. The bank is arranging and managing the primary syndication of a US$143 million project finance debt facility for the Arcadia Lithium Project.
Of the remainder, AUD120 000 (US$78 070,26) towards progress of on-going off-take discussions, AUD54 575 (US$35 505,71) for expenses of the offer, and AUD655 322 (US$426 306,11) towards working capital.
On why it was issuing the rights offer in its statement at the beginning of the month, PRL said it needed working capital to enable it to navigate difficult market conditions brought about by the COVID-19 pandemic.
PRL is developing the Arcadia Mine
near Goromonzi, which it believes has lithium deposits widely used in electric car batteries. — BY TATIRA ZWINOIRA