Prospect Resources delineates further high-grade lithium oxide at Arcadia
Following on from last week’s encouraging announcement regarding the completion of 16 diamond drill holes at the Arcadia high-grade lithium deposit located in Zimbabwe, Prospect Resources has released results on Monday morning from channel chip sampling.
Management noted that all chips were collected from the weathered exposures of the historical Arcadia pit as well as from regional geological traverses.
Of 316 samples the peak grade was 4.37% lithium oxide. Looking at the broad spectrum of returns ranging from more than 1% to more than 4% there was a significant proportion above 2% with 123 samples in a range between 2% and 4% inclusive.
As recently highlighted by management, drilling to date has covered approximately 8% of the exploration area and the next 15 holes will more than double this land area.
The key takeaway in terms of the Arcadia deposit is the relatively high grades delineated to date, consistent with those achieved by other explorers in that region. Furthermore, all drill holes intercepted pegmatites, hosting visible quantities of spodumene and petalite.
In terms of share price performance, Prospect Resources has retraced after a three-fold increase in July when it peaked at 7.1 cents. Monday’s opening price of 5.7 cents may be considered by some investors as a useful entry point now that there is further clarity around recent drilling results.
However, there is the potential for further positive news from Prospect. Having raised $16 million in late July, the company is well-placed to fast track drilling at Arcadia and should upcoming results continue to prove encouraging there is the potential to move relatively quickly to a feasibility study, which would enable the company to order long lead time items required for plant construction.
That said, Prospect Resources should continue to be viewed as a highly speculative company with exploration results to date not necessarily an indicator of what is to come. There is also sovereign risk involved given that the project is located in Zimbabwe, a region that is prone to political instability.