PROSPECT RESOURCES LIMITED — Capital/Financing Update 2019

Oct 13, 2019

14 October 2019

UPDATE ON PURCHASE OF ADDITIONAL 17% INTEREST IN THE ARCADIA LITHIUM MINE

Prospect Resources Limited ( “Prospect” or “the Company” ) is pleased to provide an update on the acquisition of an additional interest in the Arcadia Lithium Mine.

On 11 June 2019, shareholders approved the acquisition of an additional 17% interest in the Arcadia Lithium Mine, subject to Zimbabwe regulatory approval.

The Company has received all but one Zimbabwean regulatory approval – which it expects to receive in due course.

Accordingly, the Company sought and was granted a waiver from ASX Listing Rule 14.7 so that it may delay the issue of the consideration shares until 10 January 2020.

Further details are provided below

The Company has obtained a waiver from ASX Listing Rule 14.7 to permit the Company to issue 9,479,680 fully paid ordinary shares (post 10 for 1 share consolidation)(“Consideration Shares”) to Farvic Consolidated Mines Pvt Limited (“Farvic”) later than one month after 11 June 2019, being the date shareholders approved the issue of the Consolidated Shares to Farvic at an Extraordinary General Meeting of Shareholders (“General Meeting”).

Prospect sought the waiver as it is unable to issue the Consideration Shares to Farvic within 1 month of the General Meeting due to delays in receiving Zimbabwean regulatory approval for the underlying transaction to which the Consideration Shares relate.

The reason for the delay is that transaction may only be completed with the approval of Zimbabwe Revenue Authority (ZIMRA) and the agreement was expressed to be subject to regulatory consent. Farvic has made a submission to ZIMRA but it has not yet been granted the necessary clearances. The ZIMRA clearance certificate is the only remaining consent required to complete the transaction. The Company is confident that ZIMRA will, in due course, issue the certificate.

The waiver has been granted by the ASX subject to the following conditions:

• The Consideration Shares are issued no later than 10 January 2020.

• The terms of this waiver are released to the market immediately.

Prospect Resources Limited | ACN 124 354 329 | W: prospectresources.com.au | Phone: +61 8 9217 3300

Suite 6, 245 Churchill Ave. Subiaco WA 6008 | Email: info@prospectresources.com.au

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14 October 2019

The ASX has considered Listing Rule 14.7 only and makes no statement as to the Company’s compliance with other listing rules.

ENDS

For further information, please contact:

Nicholas Rathjen General Manager, Corporate Affairs nrathjen@prospectresources.com.au

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Africa’s leading Well positioned Strong Project Path forward to Offtake Agreement battery mineral Lithium Resource Economics Financing, in place and company in regard to both demonstrated in Development and positioned to Scale and Grade DFS Production capitalise on Market Demand

About Prospect Resources Limited (ASX: PSC)

Prospect Resources Limited (ASX:PSC) is an ASX listed lithium company based in Perth with operations in Zimbabwe. Prospect’s flagship project is the Arcadia Lithium Project located on the outskirts of Harare in Zimbabwe. The Arcadia Lithium Project represents a globally significant hard rock lithium resource and is being rapidly developed by Prospect’s experienced team, focusing on near term production of petalite and spodumene concentrates.

About Lithium

Lithium is a soft silvery-white metal which is highly reactive and does not occur in nature in its elemental form. In nature it occurs as compounds within hard rock deposits (such as Arcadia) and salt brines. Lithium and its chemical compounds have a wide range of industrial applications resulting in numerous chemical and technical uses. Lithium has the highest electrochemical potential of all metals, a key property in its role in lithium-ion batteries.

Caution Regarding Forward-Looking Information

This announcement may contain some references to forecasts, estimates, assumptions and other forward-looking statements. Although the Company believes that its expectations, estimates and forecast outcomes are based on reasonable assumptions, it can give no assurance that they will be achieved. They may be affected by a variety of variables and changes in underlying assumptions that are subject to risk factors associated with the nature of the business, which could cause actual results to differ materially from those expressed herein. All references to dollars ($) and cents in this announcement are in United States currency, unless otherwise stated.

Investors should make and rely upon their own enquiries before deciding to acquire or deal in the Company’s securities.

Prospect Resources Limited | ACN 124 354 329 | W: prospectresources.com.au | Phone: +61 8 9217 3300

Suite 6, 245 Churchill Ave. Subiaco WA 6008 | Email: info@prospectresources.com.au

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