Prospect Resources Steps Back from Bikita and Step Aside
Australian Stock Exchange-listed mining and exploration junior, Prospect Resources, has put its Zimbabwean lithium projects at Bikita and Step Aside on hold, shifting its focus to a copper project in Zambia, Mining Zimbabwe reports.
By Rudairo Mapuranga
The company has also scaled back its exploration efforts in Namibia, reflecting a broader strategic shift due to softening lithium prices.
Two years ago, Prospect struck a lucrative deal, selling its 87% stake in the Arcadia lithium project in Goromonzi to Huayou Cobalt for US$378 million after an initial investment of US$25.7 million in exploration. Following this success, the company launched new lithium exploration initiatives at Bikita, Step Aside in Zimbabwe, and Omaruru in Namibia, hoping to replicate its earlier achievements. However, the global decline in lithium prices and lacklustre exploration results have led Prospect to pause these projects.
At Bikita, located on the Masvingo Greenstone Belt near Bikita Minerals, drilling results failed to yield the expected petalite-rich mineralization. After drilling 26 reverse circulation (RC) holes, the company concluded that the project was not economically viable.
“The program failed to define suitable economic volumes of petalite-rich mineralization near the surface, and the project works have now been discontinued. All technical data generated has been returned to the original vendors of the lithium asset,” the company said.
Similarly, the Step Aside project, located near the Arcadia lithium mine in Goromonzi, has also been put on hold.
“Exploration activities at Step Aside have now ceased, and expenditure has been pared back to minimum holding commitments,” according to a company update. Prospect added that it would “initiate a process to potentially monetize the lithium asset in early 2025.”
In Namibia, exploration at the Omaruru project has also been suspended, with the company stating that it is “now reassessing its priorities” while “exploration activities have now ceased with expenditure scaled back to minimum holding commitments.”
The global slowdown in lithium demand, coupled with an 80% decline in prices over the past year, has significantly affected the viability of new lithium projects. Despite Zimbabwe attracting over US$1 billion in lithium investments since 2021, the company said its recent efforts at Bikita and Step Aside were not yielding favourable results. Nearby, Bikita Minerals, another lithium producer, is also considering production cuts in response to low prices and rising operational costs.
Prospect Resources is now shifting focus to its copper project in Zambia, where it acquired the Mumbezhi operation in May, marking a strategic move to diversify its portfolio amid changing market conditions.