LITHIUM miner Prospect Resources has undertaken a soil sampling process focusing on rare earth elements (REEs) at Chishanya in the south-east of Zimbabwe, with results expected to be received in the first half of this year, the company has announced.
Zimbabwe is reportedly sitting on 17 REEs, namely cerium, dysprosium, erbium, europium, gadolinium, holmium, lanthanum, lutetium, neodymium, praseodymium, promethium, samarium, scandium, terbium, thulium, ytterbium, and yttrium.
REEs are now widely used in automobiles, electronic equipment, military technology and other fields.
Although Zimbabwe has not carried out a comprehensive mineral survey, President Emmerson Mnangagwa in 2019 revealed that the country’s REEs are the second largest in the world after China’s.
In its half-year financial report for the period ended 31 December 2020, Prospect said the Chishanya Phosphate Project is one of five known phosphate-bearing carbonatites in Zimbabwe.
The deposit has been explored by a number of companies since the 1950s including Anglo American and Rhodesia Chrome Mines Ltd. The deposit is a series of un-exploited phosphate-bearing, apatite-magnetite lenses in carbonatite located near Birchenough Bridge, Manicaland.
The potential for REEs has also never previously been assessed, it said.
“Prospect Resources has undertaken a soil sampling process focused on Rare Earth Elements, with results expected to be received in the first half of CY2021. Prospect is strategically assessing how to maximise value from Chishanya, which includes assessment of a potential exploration program and securing surrounding tenements,” the report reads in part.
The project will be located at Dorowa in the Buhera district, south-east of the country and Prospect holds 10 claims forming just over 220 hectares, covering most of the carbonatite complex.
For the period under review, the company recorded a loss of US$1.19 million against the loss of US$2.7 million recorded in 2019.
It had net cash outflows from operating and investing activities of US$1.5 million.
As at reporting date, the firm had cash and cash equivalents of US$5.5 million.
These conditions indicate a material uncertainty that may cast significant doubt about the group’s and the company’s ability to continue as going concerns.
“The group’s principal objective is to develop the Arcadia Project and, as such, it does not presently have a source of operating income sufficient to fund its operations, rather it is reliant on equity raisings or funds from other external sources to fund its activities,” it said.
To support its activities, the company said it would be required to raise additional funds.
“The group has previously been successful in raising cash through equity raisings, as and when required.”
“The consolidated interim financial statements for the half-year ended 31 December 2020 have been prepared on a going concern basis, as in the opinion of Directors, the group will be in a position to meet its operating costs and pay its debts as and when they fall due for at least twelve months from the date of this report,” the report reads.
However, the directors acknowledged that material uncertainty remains over the group’s ability to meet its funding requirements, as future funding is uncertain until secured.
“If for any reason the group is unable to continue as a going concern, then this could impact the group’s ability to realise assets at their recognised values and to extinguish liabilities in the normal course of business at the amounts,” it said.