In a strategic move reflecting shifting market priorities, ASX-listed Prospect Resources Ltd (PSC) has announced the sale of its Step Aside Lithium Project in Goromonzi. The company entered into a share sale agreement valued at up to US$2.2 million, redirecting its focus and resources entirely toward the burgeoning Mumbezhi Copper Project in Zambia, Mining Zimbabwe can report.
By Rudairo Mapuranga
This decision continues a pattern for Prospect, which previously sold its flagship Arcadia Lithium Project to Chinese battery giant Huayou Cobalt for US$422 million in 2022.
The sale of the Step Aside project is a deliberate pivot by Prospect Resources to capitalise on strengthening copper fundamentals while navigating lithium market volatility.
Managing Director and CEO Sam Hosack stated that the transaction “offers us both upfront cash return and future upside to subsequent exploration success and value growth at Step Aside,” while allowing the company to simplify its corporate structure and reduce overhead costs.
The buyer, Fatima Resources Pty Ltd, brings extensive Zimbabwe operating experience, positioning the Step Aside Project for continued development under new ownership.
The US$2.2 million agreement is structured to provide immediate liquidity while preserving future upside for Prospect.
The milestone payments are contingent on the buyer achieving specific development targets, including entering into binding offtake agreements, upgrading the mineral resource, or completing a future sale transaction valuing the project above US$5.0 million.
The Step Aside Lithium Project, located just 8 km north of the Arcadia Lithium Mine, has demonstrated significant potential through a multi-phase drilling program conducted from 2022 to 2024.
Recent assays from Phase 4 diamond drilling yielded high-grade intercepts confirming substantial mineralisation:
- 13.0m @ 1.68% Li₂O from 75.5m (WinBin)
- 15.3m @ 1.25% Li₂O from 179.9m, including 11.0m @ 1.60% Li₂O from 182.0m (Pegmatite E)
- 5.0m @ 1.68% Li₂O from 149.0m (Pegmatite C)
The drilling successfully extended the high-grade mineralised zone at WinBin by at least 100 meters southwest and confirmed that the deposit remains open in multiple directions and at depth, indicating significant exploration upside. Hosack highlighted the identification of a “significant co-joined mineralised pegmatite system” as a key discovery.
The divestment of Step Aside mirrors Prospect’s successful monetisation of its flagship Arcadia Project just a few years prior.
In December 2021, Prospect signed a binding agreement to sell an 87% interest in the Arcadia Lithium Project to a subsidiary of Zhejiang Huayou Cobalt for an upfront cash consideration of approximately US$377.8 million. The total deal value was US$422 million, including minority shareholders.
The Arcadia Project was one of the world’s biggest hard-rock lithium resources, with proven and probable reserves estimated at 42.3 million tonnes grading 1.19% Li₂O. The sale represented a significant return on investment for Prospect, which had spent approximately US$25.7 million on exploration and evaluation at Arcadia.
Prospect’s strategic pivot centres on the Mumbezhi Copper Project in Zambia’s prolific Central African Copperbelt. The proceeds from the Step Aside sale will fund ongoing exploration at Mumbezhi, particularly the Phase 2 drilling program.
The company announced a maiden mineral resource estimate for Mumbezhi in March 2025 of 107.2 million tonnes at 0.5% copper for 514.6 kilotonnes of contained copper. Recent drilling has extended mineralisation at the flagship Nyungu Central deposit, with hole NCDD010 intercepting 60.5m at 0.53% copper from 296m, including 33.0m at 0.71% copper.
Hosack commented on the progress: “We are making excellent progress with the significant amount of Phase 2 exploration work currently underway. Our drilling at Nyungu Central continues to deliver promising extensional results and is helping us to better define the structure of this significant copper deposit.”
Prospect Resources’ decision to divest its lithium assets and pivot to copper reflects broader trends in the critical metals sector. The global copper market faces a projected supply deficit, driven by demand for electrification and renewable energy infrastructure. Electric vehicles, for example, use up to four times more copper than conventional internal combustion engine vehicles.
Meanwhile, the lithium market has experienced significant price volatility, making it challenging for junior explorers to maintain project economics. Prospect’s strategic shift allows it to reallocate capital from a non-core asset toward a copper project in a stable mining jurisdiction during a period of favourable market fundamentals.
As the company focuses on advancing Mumbezhi, the structured milestone payments from Step Aside provide additional upside exposure without ongoing operational commitments, creating a balanced approach to value creation in the evolving energy metals landscape.
