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ASX-listed Prospect Resources has agreed to sell its exploration business in the Democratic Republic of Congo to New Energy Metals.

New Energy Metals (NRG) is a private Perth-based company that is seeking to list on the ASX.

The sale will be effected by the transfer of Prospect’s wholly-owned subsidiary, Prospect Cobalt (PCP), along with its associated subsidiaries and assets.

The consideration for the sale is:

  • A$1,000 and the costs of transferring ownership of PCP to NRG;
  • A$50,000 of new shares in NRG’s proposed seed capital placing;
  • A$100,000 of new shares in NRG’s proposed IPO placing;
  • A$1,000,000 on delineation of a JORC Inferred Mineral Resource Estimate of greater than 5Mt at an average grade of greater than 2% copper or greater than 0.5% cobalt on existing or future projects generated by NRG and its subsidiaries in the DRC; and
  • A net smelter royalty (NSR) of 1% on any copper and cobalt products produced from existing or future projects generated by NRG and its subsidiaries in the DRC.

The transaction follows the decision by Prospect Resources to scale back exploration activities, and to focus on and further advance the Arcadia Lithium Project.

Sam Hosack, MD of Prospect Resources says, “The Arcadia Lithium Project in Zimbabwe is a top ten global hard rock lithium asset with strong project economics.

“It is shovel ready and we are currently sourcing funding to allow us to commence development. Therefore, Arcadia will be the primary driver of shareholder value in the near future, and by divesting the company’s explorational activities in the DRC, Prospect can re-allocate capital to improving Arcadia’s project economics and moving the Project into development.”