Prospect resources Ltd, a partner of Osino Resources Corp, has completed the phase one earn-in at its Omaruru Lithium Project in Namibia, and will proceed with the phase two earn-in.
Osino entered into an earn-in and shareholder agreement with Prospect in the fourth quarter of 2022, involving that Prospect had the right to earn a 40% interest in the project upon completion of phase one, and can earn a 51% interest upon completion of phase two.
According to a statement issued by Heye Daun, the president and chief executive officer of Osino, Prospect Resources can earn up to 85% interest on the project, with Osino carried until the completion of a definitive feasibility study.
Omaruru is located 20km south-east of Osino’s flagship Twin Hills gold project.
“We are encouraged by the results of the phase one programme on our Omaruru Lithium Project.
Prospect Resources recently completed a drilling programme and has expanded the known lithium mineralisation in the area and identified several drill targets that were previously under cover.
“The success of the phase one programme sets the stage for potential new discoveries during the phase two drilling campaign planned for Omaruru.
“We are looking forward to Prospect’s upcoming phase two exploration activities and results, as they become available into the next quarter,” he says, adding that Osino’s shareholders will continue to benefit from exploration success at Omaruru, while the company remains focused on fast-tracking its flagship Twin Hills Gold Project to production.
The Omaruru Lithium Project is centred on the village of Wilhelmstal, east of Karibib, and covers 175 square kilometres.
The tenement is located near several advanced mining projects, including Lepidico’s Karibib Lithium Project and Osino’s Twin Hills gold project.
Osino undertook an initial evaluation of the lithium potential of the project from 2019 to 2021.
This work included mapping, rock grab sampling, and a 16-hole (1 942m) reverse circulation drilling programme in 2020.
Prospect Resources has advanced the project since entering the agreement with Osino in 2022, recently announcing a new lithium discovery from phase one drilling results.
The project offers excellent potential to delineate a maiden lithium mineral resource and identify new deposits to build a project of sufficient
scale, as well as establishing a strategic position in Namibia, providing an attractive growth pipeline in the battery minerals sector and continued investment in a desirable jurisdiction of sub-Saharan Africa.
Prospect completed its follow-up phase one reverse circulation drilling programme at Omaruru in late June, with 27 holes completed for 1 839m, and all assay results from this drilling included in the statement.
Under the agreement, Prospect Resources has earned a 40% interest in the project, with a US$1-million investment in phase one, and can earn a further 11% interest through a US$560 000 investment in phase two, totalling a 51% ownership in the project.
Upon the completion of phase two and having earned 51%, development funds are to be contributed on a pro-rata basis.
According to the statement, if one party fails to contribute its pro-rata share, its shareholding will be diluted.
The minority shareholder will be diluted down to 15%, at which point its interest will be free carried until the completion of detailed feasibility studies.
During phase three of the agreement, if Prospect’s spending does not reach a minimum of US$500 000 within the 12-month period following phase two, both parties would have the option to purchase the other party’s interest for an agreed sum.
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