- Option to earn 51% in prospective REE project
- US$3.05 million to acquire & explore highly prospective asset
- Includes rock chip samples up to 6,599 ppm TREO
Prospect Resources Limited (ASX:PSC) announced today that it has executed an Option Agreement with Antler Exploration Zambia Limited, a subsidiary of Antler Gold Inc. (ANTL.TSXV), to earn 51% interest in the Kesya Rare Earths Project (Kesya or the Project) in southern Zambia. Under the agreement, Prospect Resources has up to two years to acquire 51% interest in the Project by making total payments of US$3.05 million to Antler Exploration, which includes upfront payments and expenditure on exploration.
Rare Earth Elements (REEs) are a group of 17 chemical elements with unique magnetic, optical, and catalytic properties. REEs are essential components of modern technology, including smartphones, electric vehicles, wind turbines, and defense equipment. They are also key components of batteries, including those used in electric vehicles and renewable energy storage systems. The demand for REEs has been growing globally, driven primarily by the increasing demand for electric vehicles and renewable energy.
The Kesya Project includes a large-scale exploration license where previous geological mapping and sampling has identified a large rare earth element (REE)-enriched carbonatite intrusion. Rock chip samples have indicated the presence of the high-value REEs neodymium and praseodymium, which are used to make strong permanent magnets. The samples have shown REE concentrations up to 6,599 ppm, indicating the Project’s potential to deliver a significant new REE discovery.
This Option Agreement is a major milestone for Prospect Resources in line with the company’s strategic objectives to extend its reach into the battery minerals sector in Africa. Zambia is a leading mining jurisdiction in sub-Saharan Africa with excellent infrastructure and government support. Major companies like Barrick Gold and First Quantum Minerals already operate in Zambia.
The Managing Director and CEO of Prospect Resources, Sam Hosack, said the Option Agreement is another significant milestone which extends the company’s focus on battery and electrification minerals in Africa. He said Kesya has the ingredients of a world-class REE system with significant values of neodymium and praseodymium over a large area. The Project offers potential for a new high-value REE discovery with defined drilling targets.
For Prospect Resources, the Option Agreement means expanding its presence in the battery minerals sector in Africa. For the industry, the Project could lead to new REE discoveries. For the Zambian economy, the development of the Project will generate revenues, employment and infrastructure development.
The agreement shows Prospect Resources’ ability to collaborate with reputable partners like Antler Gold to develop technically and commercially sound projects. For Antler Gold, the Option Agreement with Prospect Resources validates its ability to attract leading partners to develop its projects.
According to a report by Grand View Research, the global rare earth elements market size was valued at USD 4.8 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 10.8% from 2021 to 2028. The report also notes that the demand for REEs is expected to increase significantly in the next few years, especially in the Asia Pacific region.
Analysts have noted that the supply of REEs is currently dominated by China, which produces more than 80% of the world's REEs. This has led to concerns about the security of supply for other countries that rely heavily on REEs. The United States, for example, has identified REEs as critical minerals and has been working to develop its own domestic supply chain.
In this context, the announcement by Prospect Resources Limited that it has secured an option to earn a 51% interest in the Kesya Rare Earths Project in southern Zambia is significant. The Kesya Project includes a large-scale exploration license where previous geological mapping and sampling have identified a large REE-enriched carbonatite intrusion. The rock chip samples have indicated the presence of the high-value REEs neodymium and praseodymium, which are used to make strong permanent magnets.
According to the Option Agreement, Prospect Resources has up to two years to acquire 51% interest in the Project by making total payments of US$3.05 million to Antler Exploration, which includes upfront payments and expenditure on exploration. The Managing Director and CEO of Prospect Resources, Sam Hosack, said the Option Agreement is another significant milestone that extends the company's focus on battery and electrification minerals in Africa.
It is not clear how much of the global demand for REEs the Kesya Project could supply with its current production. However, the Project's potential to deliver a significant new REE discovery with defined drilling targets makes it an attractive prospect for Prospect Resources.
According to a report by the United States Geological Survey, the five major producers of rare earth elements in the world, in order of production volume, are China, the United States, Myanmar, Australia, and India.
-Equity Axis News