Global copper miner First Quantum Minerals (TSX:FM) is making a strategic investment of $15.2 million in Prospect Resources (ASX:PSC), which will assist in exploration work at the Mumbezhi Copper Project in Zambia, Africa.
Under the placement, First Quantum will acquire 101.06 million shares at $0.15 per share, which represents a 36% premium to the last closing price of $0.11.
First Quantum will obtain a 15% stake in Prospect and will have the right to nominate an appointee to the company’s board.
Prospect has agreed to apply at least US$2.5 million ($3.95 million) of the amount raised towards agreed exploration work at Mumbezhi.
A phase two drilling program, beginning this quarter, will test further prospective regional targets at Nyungu North, Nyungu South and West Mwombezhi.
The program aims to target further growth in the recently reported resource estimate for Mumbezhi, which contains 107.2 million tonnes @ 0.5% copper for 514,600 tonnes of contained copper.
Prospect CEO Sam Hosack says the investment offers considerable funding, coupled with regional exploration expertise, to continue advancing the planned exploration at Mumbezhi.
“Bringing first Quantum into the fold as both a strategic cornerstone shareholder and technical partner offers exceptional value-accretive opportunities for both parties,” Hosack says.
“Mumbezhi is hosted in a similar regional geological setting to First Quantum’s existing Zambia operations at Sentinel, which is located proximal to the Mumbezhi Project.
“This investment strongly validates our conviction for scale at Mumbezhi, as well as 2024 works which recently culminated in the delivery of a significant maiden 515,000 tonnes contained copper mineral resource across just the Nyungu Central and Kabikupa deposits.”
Hosack adds that the investment also shows a robust belief in the growth potential on offer across the broader Mumbezhi tenure, which covers two granted mining leases.
In conjunction, Prospect has also executed a separate subscription agreement with privately held Eagle Eye Asset holdings to raise $2.8 million, subject to shareholder approval.
Through this investment, Eagle Eye will maintain its $15.3% stake in the company through the issue of 18.86 million shares at $0.15 per share.
Prospect says the funds through the investment will also be applied to ongoing activities at Mumbezhie and general working capital.
Prospect Resources is an Australian battery and electrification metals developer focused on advancing the Mumbezhi Copper Project in Zambia.
Write to Aaliyah Rogan at Mining.com.au
Images: Prospect Resources
