HARARE – Prospect Resources has disposed of its interest in the Penhalonga Gold project to Luzich Resources for a total consideration of US$1 million.
Last year, the lithium resource company entered into a binding term sheet with Luzich Resources (Africa) LLC, an affiliate of Luzich Partners LLC, whereby Luzich acquired an option to buy 100% of the Company’s Penhalonga Gold Project.
The project is located in the Mutare Greenstone Belt which extends eastward into Mozambique and is considerd to be one of the richest greenstone belts in Zimbabwe in terms of gold production per unit area at 122kg Au/km2. Historical production from the Penhalonga valley between 1897 and 1937 amounted to 1.3 Moz Au, 1.6 Moz Ag, 7,300t Pb and 5.2t Cu. The project is located opposite Metallon’s Redwing Gold Mine.
Historical mining focused on near surface oxide resources with approximately 750m of strike being tested to date, with the deeper sulphide resource extending at depths >1km
In a statement released today, Prospect said Luzich had executed the option agreement and had paid US$200 000 of the purchase price as an additional non-refundable instalment of the purchase price, and a further US$550,000 will be paid at completion of the sale and purchase agreement within 30 days.
A non-refundable US$200 000 had already been paid when the option agreement was signed and a further US$50 000 when it was extended.
The Penhalonga Gold Project is being sold on a debt free, cash free basis.
Prospect is focused on taking the Arcadia Lithium Project into production as soon as possible. The agreement allows Prospect to extract value from its non-core assets and further strengthen Prospect’s balance sheet. Proceeds from the sale of the Penhalonga Gold Project will be applied to this aim, said the group.
Several phases of exploration have been completed over the Penhalonga Project since the 1960’s. Rio Tinto Zimbabwe initially completed a series of deep drilling in 1962 that confirmed the strike extent as well that the Au bearing zones were continuous at depth. Follow up adit sampling by Casmyn /New Dawn Mining Corporation in 200 confirmed grades of >10g/t Au. This was followed by an airborne high resolution magnetic survey in 2009 (completed by ZMI) that identified a 100m wide shear zone with a strike length of at least 1.5km co incident with the current Au occurrences located along the Penhalonga Valley. ZMI followed up with 2400m of drilling that delineated a shallow resource of 0.5Mt grading 2.2g/t Au to 30m depth (Oxide to transition).