Shares in West Perth-based junior Prospect Resources rose by 30 per cent early on Tuesday, following news of a $15.2 million investment from major copper player First Quantum Minerals.
Shares in West Perth-based junior Prospect Resources rose by 30 per cent early on Tuesday, following news of a $15.2 million investment from major copper player First Quantum Minerals.
As of 12.19pm AWST, Prospect shares were up 32 per cent, trading at 14.5 cents, their highest price since July 1 last year.
A major global miner with copper, gold and nickel interests, First Quantum will attain a 15 per cent stake in Prospect and, in the process, become a cornerstone investor.
First Quantum’s copper asset, Sentinel, is located 25 kilometres north-west of Mumbezhi in Zambia.
Under the transaction, the Sam Hosack-led junior will issue around 101.66 million new ordinary shares to First Quantum at an issue price of 15 cents per share; a price that represents a 36 per cent premium to Prospect’s final closing price of 11 cents prior to ducking into its trading halt.
Aside from being able to nominate a person to join the Prospect board, First Quantum will work alongside Prospect as a technical partner at the junior’s Mumbezhi copper project.
Around $US2.5 million from First Quantum’s investment will be used by Prospect towards pre-determined exploration activities.
Mr Hosack said the transaction would likely be a win-win for both parties.
“Bringing First Quantum into the fold as both a strategic cornerstone shareholder and technical partner offers exceptional value-accretive opportunities for both parties,” he said.
“Mumbezhi is hosted in a similar regional geological setting to First Quantum’s existing Zambian operations at Sentinel, which is located proximal to the Mumbezhi project.
“Gaining access to First Quantum’s breadth of regional expertise to complement our current multi-disciplinary exploration strategy, Prospect is well placed to continue identifying further regional prospects, make targeted new discoveries, and add potential new copper tonnage to the existing Mumbezhi mineral resource estimate at a far greater rate.
“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 515kt contained copper mineral resource across just the Nyungu Central and Kabikupa deposits.
“It also demonstrates a robust belief in the long-term growth potential on offer across the broader Mumbezhi tenure, which covers two granted mining licences.”
The junior confirmed its phase two drilling program will begin at Mumbezhi later in the second quarter of the 2025 calendar year.
In addition to First Quantum’s investment, Prospect told the market it had also filed documents for a $2.8 million transaction from existing shareholder, Eagle Eye Asset Holdings.
Following the issue of 18.86 million new ordinary shares, Eagle Eye will maintain its 15.3 per cent stake in Prospect.
