Prospect Resources secures $15.2m investment from First Quantum Minerals to advance Mumbezhi copper project

Prospect Resources (ASX: PSC) is set to receive a $15.2 million cornerstone investment from global copper miner First Quantum Minerals in return for a 15% shareholding.

Prospect expects the investment will help advance its Mumbezhi copper project in north-west Zambia, with the Canadian producer to act as a key technical partner alongside Prospect’s main exploration team.

Mumbezhi is located 25 kilometres from First Quantum’s wholly owned Sentinel copper mine within the world-class north-western Zambia copper belt and has an estimated resource of 107.2 million tonnes grading 0.5% copper for 514.6 kilotonnes of contained metal.

Share placement

Prospect will issue First Quantum with 101.06 million new Prospect shares priced at $0.15 each, representing a 36% premium to its last closing price of $0.11 and a 28% premium to the 20-day volume-weighted average price of $0.117.

On completion of the issue, First Quantum will have the right to nominate a representative to join the Prospect board of directors.

The nominee will remain in place as long as First Quantum maintains at least 10% equity in Prospect.

‘Funding runway’

Prospect managing director Sam Hosack welcomed First Quantum to the share register.

“Bringing First Quantum into the fold as a strategic cornerstone shareholder and technical partner offers us considerable funding runway to continue advancing our planned exploration of Mumbezhi,” he said.

“Having access to First Quantum’s breadth of regional expertise will position us to continue identifying new regional prospects and adding potential new copper tonnages to the existing Mumbezhi resource estimate at a far greater rate [than on our own].”

Eagle Eye investment

Prospect has also entered into a placement agreement with long-term shareholder Eagle Eye for 18.86 million new shares at $0.15 each to raise approximately $2.8m.

The investment will maintain Eagle Eye’s 15.3% shareholding in Prospect.

The total First Quantum and Eagle Eye investment of $18.5m will leave Prospect well funded to further accelerate exploration and advancement of the Mumbezhi project.

The company will commence a Phase 2 drilling campaign at Mumbezhi in the coming weeks to test prospectivity at the Nyungu North, Nyungu South and West Mwombezhi targets.

Explorer and producer

First Quantum is a long-established copper explorer and producer in Zambia, with its wholly owned Sentinel and Kansanshi mining and processing operations producing a total of 402,000t of copper-in-concentrate during 2024.

The company is ramping up its smelting capacity as part of the Kansanshi S3 expansion project.

This will see it transition from a high-grade, medium-scale operation to a medium-grade, larger-scale operation more suited to a higher proportion of primary, lower-grade sulphide ores at depth.