Arcadia offtaker to cash-in US$8 million after mine sale
The sale of the Arcadia Lithium Mine to Chinese new energy lithium-ion battery material producer, Zhejiang Huayou Cobalt will see offtaker Sinomine Resource (Hong Kong) International Trading Co. Limited getting US$8 million after Offtake Agreement termination.
Rudairo Mapuranga
Prospect Resources has executed a Deed of Termination and Release (Termination Deed) with Sinomine regarding the offtake and marketing arrangements between Prospect, Prospect Lithium Zimbabwe (Pvt) Limited (PLZ) and Sinomine (Offtake Agreement) that was signed in 2018.
The terms of the Termination Deed take effect upon completion of the binding Share Sale Agreement governing the Transaction. When the Offtake Agreement is terminated and Prospect, PLZ and Sinomine are released from their respective obligations, and Sinomine will receive an amount of US$8 million as required under the Termination Deed.
The terms of the Termination Deed only take effect in the event of completion of the Transaction. If the transaction is not completed, the terms of the Termination Deed do not take effect, and the status quo prevails.
Termination of the Offtake Agreement is a condition precedent to completion of the Transaction. The parties to the Transaction have confirmed that this condition precedent will have been satisfied once the Termination Deed takes effect, and Huayou has confirmed to Prospect that it will not rely on this condition precedent as a reason not to proceed to completion if all other conditions precedent have been satisfied or waived.
Sinomine remains a 4.86% shareholder in Prospect.