PROSPECT Resources Ltd has cancelled a US$10 million facility it secured last year as it is now valued at RTGS$3,3 million following the partial floating of the local currency in February 2019.
By Cloudine Matola
Last year, the lithium miner secured a US$10 million export finance facility from the Reserve Bank of Zimbabwe through CBZ Bank when the US dollar and bond note were pegged at 1:1.
The loan was meant to partially finance the Arcadia Lithium project.
In an update, the company said it had not commenced the drawdown on the facility which no longer serves the interests of the company and has decided to cancel the facility.
“The Company previously announced a US$/RTGS 10 million loan facility, which has not been drawn down. With the partial floating of the RTGS, the facility would have a face value of US$3,3millon. Accordingly, it is not in the interest of the company to use this facility and in light of separate and larger financing conversations, it has been cancelled,” the company said.
Funds drawn from the facility were supposed to be used to meet local costs on the mine development, including the construction of a tailings facility, pre-strip of the mine site and building construction.
A number of companies are still reeling from the aftermath of the February 20 monetary policy statement which introduced inter-bank forex trading.
Prospect Resources, which is a lithium and battery mining company, owns the Arcadia Lithium project in the country and has also ventured into oil and gas exploration.
The company said tests results show that there will be an overall increase in project lithium recovery.