BY MTHANDAZO NYONI
AUSTRALIA-LISTED mining concern, Prospect Resources says the success associated with the Arcadia transaction had resulted in more opportunities being presented to the company.
In April this year, Prospect completed the sale of its 87% interest in the Arcadia project to Huayou International Mining Limited for A$466 million (about US$377,8 million).
“We are pleased to have completed the Arcadia transaction. The transaction realised a significant return for shareholders with net cash proceeds received by Prospect of A$466 million,” Prospect managing director and chief executive Sam Hosack said in a quarterly activity report for the quarter ended June 30, 2022.
He said after payment of transaction costs, Prospect was preparing to distribute almost 95% of the net proceeds from the transaction to its shareholders, with approximately A$34 million (about US$23,68 million) to be retained for future activities.
“The quarter was one of agility, as the team swiftly transitioned from Arcadia to new project generation.
“The success and publicity associated with the Arcadia transaction has resulted in an increase in opportunities being presented to Prospect, which our business development and exploration teams are evaluating,” Prospect chief said.
“It was also a period of volatility in equity markets, something which provides further opportunity for Prospect given its strong financial position and extensive development expertise.
“We are seeking to grow value in Prospect 2,0 through the processing of identifying, assessing, investing and then advancing battery and electrification metals opportunities.”
The company said its exploration team continued to develop a pipeline of prospective battery and electrification mineral targets.
It said project generation activities were advancing well, and the company was well capitalised to identify, assess, invest and advance projects that had the potential to meet scale and grade criteria.
Business development activities during the quarter comprised evaluation of a number of projects, spanning various jurisdictions, commodities and stages of development.
“Although the projects assessed presented potential opportunities, they did not meet Prospect’s internal project assessment criteria. Prospect is in ongoing discussions with various parties and is focusing its resources on the highest potential and best value opportunities,” the company said.
The board believes, with approximately A$34 million of available cash, zero debt and continuity of the current management team, Prospect was well placed to deliver on this strategy.
The Prospect board has resolved to distribute the vast majority of the Arcadia transaction proceeds to shareholders via a A$0,96 (US$0,67) per share distribution.
This planned distribution comprises an unfranked dividend component of A$0,79 (US$0,55) per share (special dividend) and, subject to shareholder approval, a capital reduction component of A$0,17 (US$0,12) per share (capital reduction).
The company said should the capital reduction not be approved by shareholders, the cash distribution would only include the special dividend of A$0,79 per share, and the total amount of the capital reduction will be retained by the company.
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