Prospect Resources' Equity Raising to Propel Mumbezhi Copper Project
PSC (PSC) Share Update August 2024 Thursday 1st
Prospect Resources Announces Equity Raising to Fund Mumbezhi Copper Project
Prospect Resources Ltd (ASX: PSC, FRA:5E8) has announced a successful equity raising, securing A$8 million to advance its Mumbezhi Copper Project in Zambia.
Instant Summary:
- A$8 million raised via placement of 80 million new shares at A$0.10 per share.
- Additional A$2 million targeted through a non-underwritten Share Purchase Plan (SPP).
- Funds to be used for exploration and development at the Mumbezhi Copper Project.
- Placement supported by new and existing institutional and sophisticated investors, including substantial shareholder Eagle Eye.
- Prospect Resources expects to have A$15.7 million cash on hand post-placement.
Equity Raising Details
Prospect Resources has successfully raised approximately A$8 million through a placement of 80 million new shares at an issue price of A$0.10 per share. This placement was well-supported by both new and existing institutional and sophisticated investors, including Eagle Eye, a long-term substantial shareholder.
In addition to the placement, the company plans to undertake a non-underwritten Share Purchase Plan (SPP) at the same issue price, targeting to raise an additional A$2 million. This provides an opportunity for all eligible Prospect shareholders to participate in the equity raising.
Use of Funds
The funds raised will primarily be used to advance exploration and development activities at the Mumbezhi Copper Project in Zambia, which Prospect Resources holds an 85% interest in. The focus will be on resource-focused drilling initiatives and regional exploration activities. Additionally, the company will review complementary exploration and development opportunities, particularly within Zambia.
On completion of the placement, Prospect Resources expects to have approximately A$15.7 million in cash on hand, excluding any proceeds raised from the SPP. The SPP is set to open on or around Monday, 12 August 2024, with directors intending to participate.
Market Context and Future Plans
Prospect's Managing Director and CEO, Sam Hosack, expressed confidence in the Mumbezhi Copper Project's potential, citing the strong interest received for the placement as a robust endorsement of their strategy. The company aims to systematically review and validate all available technical data following the recent purchase of Mumbezhi, highlighting the project's strong prospectivity.
Given the projected long-term global copper market undersupply, Prospect Resources is excited to progress their maiden drill program and other key site-based workstreams at Mumbezhi. The Phase 1 RC and diamond drilling will target prospective zones within and adjacent to the Nyungu deposits, with updates on exploration progress and results expected through the second half of 2024.
Share Purchase Plan (SPP) Details
The SPP will allow eligible existing shareholders with a registered address in Australia or New Zealand to apply for up to A$30,000 worth of new shares without incurring brokerage fees. The shares will be issued at A$0.10 per share, the same price as the placement, and will rank equally with existing ordinary shares of the company.
The SPP is not underwritten, and the company retains the right to accept oversubscriptions or to scale back applications at its absolute discretion. An SPP Booklet containing further information will be dispatched to eligible shareholders on or around Monday, 12 August 2024.
The successful equity raising is a positive development for Prospect Resources, providing the necessary funds to advance the Mumbezhi Copper Project. This move is likely to boost investor confidence in the company's growth prospects, particularly given the projected undersupply in the global copper market.
Investor Reaction:
Analysts are likely to view the equity raising favorably, as it demonstrates strong investor support and provides the financial resources needed to advance a promising project. The involvement of substantial shareholder Eagle Eye further underscores confidence in the company's strategy.
Conclusion:
Investors should monitor the progress of the Mumbezhi Copper Project and the results of the upcoming exploration activities. The successful equity raising positions Prospect Resources well for future growth, making it a company to watch in the copper sector.