CBZ Bank Ltd has availed a US$10 million export finance facility to lithium miner Prospect Resources under a Reserve Bank of Zimbabwe (RBZ) arrangement.
The RBZ in 2017 rolled out a US$200 million revolving fund for exporters that is being disbursed by different banks.
The US$200 million is part of the many schemes that include the export finance, youth finance, retooling facility meant to boost the economy and ensure that the industry is export-ready.
Prospect said the facility carries an interest rate of 7,5% per annum and a capital repayment holiday of 12 months, after which monthly capital repayments are to be made for 24 months with the final due on May 31 2021. The funds drawn from the facility are expected to be used to meet local costs on the mine development, including the construction of the tailings facility, pre-strip of the mine site and building construction.
“Prospect Resources Ltd (ASX: PSC) is pleased to announce that its 70% owned Zimbabwe subsidiary, Prospect Lithium Zimbabwe (Pvt) Limited, has received a US$10,000,000 Export Finance Facility from the Reserve Bank of Zimbabwe (the Facility) through CBZ Bank Limited. The purpose of the Export Finance Facility is to foster the development of existing and new export focussed businesses in Zimbabwe,” noted prospect. Prospect sees this loan as another building block in the financing of the Arcadia Lithium Mine and tangible evidence of the government’s support for the project. The loan is secured by an unlimited guarantee given by Prospect Resources to the lender for all sums due under the financing agreement.
The lender (CBZ) is entitled to receive the proceeds of any and all sales of lithium produced by the borrower as long as any amount of the loan remains outstanding, but this shall not exceed the loan amount.
Prospect Resources is looking at exploring additional lithium resources in the region during the third quarter of 2018 with plans to mobilise US$55 million to finance construction of the first phase of a processing plant just outside the capital on course.
Its Arcadia plant is set to position the country as a significant player in the mineral processing value chain.