Lithium and Zimbabwe: a heady brew
In 1980 The Times of London reported from the newly independent Zimbabwe (it had once been the British colony of Southern Rhodesia) on the country’s mineral resources. It said the state contained “the world’s largest lithium resource”, located in southern Zimbabwe at the Bikita tin field. At one stage the country was the fifth largest producer of lithium and exported to Europe, North America and Asia.
The country is back in the news — at least as far as Australian investors are concerned. On Thursday an obscure exploration company Prospect Resources (ASX: PSC) announced it had taken an option over the Arcadia lithium deposit in Zimbabwe. On Wednesday Prospect had a market capitalisation of just A$2 million. Now it’s worth A$6 million, representing the 200% share price increase on the day, the stock moving from A$0.005 to A$0.018. Investors (they traded 173 million Prospect shares on Thursday) clearly shrugged off the political risk associated with Zimbabwe.
Lithium frenzy is still running high. In fact, two other companies announced lithium acquisitions on the same day. Quantam Resources (ASX: QUR) is now looking for lithium in Manitoba, and soon after the announcement hit the Australian Securities Exchange its stock was up by 53.5%; then Argosy Minerals (ASX: AGY) reported it was buying two brine projects in Argentina, sending its stock up 76.2% — although QUR and AGY came back a little as the trading session wore on, they still recorded significant gains.
The Bikita mine began operating in 1911, then just as a tin mine but has since diversified into tantalum, beryllium and lithium production, and is still operating.
There has been talking of boosting the Zimbabwe’s lithium output, and in 2014 the government announced it was looking at building a lithium processing plant at Bulawayo. No doubt the politicians in Harare are watching as other countries are in the lithium spotlight.
Prospect Resources is, it must be stressed, not venturing into Zimbabwe for the first time. The company has been working on gold projects there for four years, so presumably the management knows how deal with any problems there.
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Prospect has an initial exploration target of between 15 million and 18 million tonnes at between 3% and 5% Li20.
I won’t go into too much detail about this company. My point in telling InvestorIntel readers about this development is to bring to their attention the lithium potential of Zimbabwe, something that has not been widely discussed during the recent lithium bonanza.
But some detail about the mine might be instructive. Arcadia between 1954 and 1972 (production was intermittent) produced more than 15,000 tonnes of mixed lithium ore. Two rounds of historical drilling in 1969 and in 1981 confirmed that the pegmatite extends at least 1,500 metres along strike at a high grade.
The prospect is 35km northeast of Harare. In fact, the camp now under option by Prospect Resources has seen five mining operations. Arcadia itself variously produced eucryptite, petalite, mixed lithium ore and feldspar. Three others — Arc, Bing and Green Mamba — in the period from 1953 to 1972 produced small quantities of the mineral beryl, while Winston in the 1950s and 1960s mined lepidolite from a predominately broad lithium-rich pegmatite.
All this may be a sign that Zimbabwe may regain its status in the lithium industry. After all, it is one of a small number of countries (Australia, Russia, the United States and Canada being the other leading ones) that have large hard rock lithium mineralisation.
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