Prospect Resources : Chairman's EGM Address and EGM Presentation

ASX.PSC FRA.5E8

ASX ANNOUNCEMENT

22 July 2022

For personal use only

Extraordinary General Meeting - Chairman's

Address and EGM Presentation

Prospect Resources Limited (ASX: PSC, FRA:5E8) (Prospect or the Company) attaches the following documents to be presented at its Extraordinary General Meeting being held today at 10.30am (Perth time):

• Chairman's Address; and
• EGM Presentation.

This release was authorised by Sam Hosack, Managing Director.

-ends-

For further information, please contact:

Sam Hosack	Nicholas Rathjen
Managing Director	Head of Corporate Development
[e-mail]	[e-mail]

Prospect Resources Limited ACN 124 354 329 Level 2, 33 Richardson Street. West Perth WA 6005 E: [e-mail] W: prospectresources.com.au

For personal use only

About Prospect Resources Limited (ASX: PSC, FRA:5E8)

Prospect Resources Limited (ASX: PSC, FRA:5E8) is an ASX listed lithium company based in Perth with operations in Zimbabwe. Prospect's flagship asset is the Arcadia Lithium Project located on the outskirts of Harare. Arcadia represents a globally significant hard rock lithium resource and is being rapidly advanced by Prospect's experienced team. It represents one of the most advanced lithium projects globally, with an Optimised Definitive Feasibility Study completed and offtake agreements executed.

About Zhejiang Huayou Cobalt Co., Ltd

Huayou is a leading Chinese new energy materials producer with three major business segments

1. research, development and production of cathode materials, (2) research, development and production of battery precursor, and (3) development of battery metals resources. Huayou is listed on the Shanghai Stock Exchange with a market capitalisation of approximately US$22 billion. Huayou continues to execute on its proactive business development strategy to build a new energy materials business division, which includes the provision of significant investments in the lithium resources sector. Huayou has been operating two copper and cobalt mines in the Democratic Republic of Congo since 2007 and is investing in four nickel and cobalt projects in Indonesia with an expected annual production of 255kt of nickel and 20kt of cobalt contained in products by 2024.

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.

Page 2 of 2

ASX.PSC FRA.5E8

ASX ANNOUNCEMENT

22 July 2022

For personal use only

Chairman's EGM Address

Dear Fellow Shareholders

I wanted to take this opportunity to thank you all for attending today's Extraordinary General Meeting and for your ongoing support of the Company during this exciting period in its evolution. Along this journey we have welcomed many new Shareholders to the register and are pleased to have achieved a number of significant milestones in the face of volatile market conditions, all of which have been in pursuit of the generation and delivery of value to you, our Shareholders.

These milestones have included the construction and operation of our Arcadia pilot plant and completion of two comprehensive Optimised Feasibility Studies demonstrating multiple pathways to development, further reducing the project's technical and commercial risks, positioning Arcadia for development. The year concluded with the execution of a competitive tendering process for funding of Arcadia that drew interest from a range of international parties - which as you know, culminated in the sale of our 87% interest in Arcadia to Huayou.

The transaction realised a significant return for Shareholders with net cash proceeds received by Prospect of A$466 million. After payment of transaction costs, Prospect is preparing to distribute almost 95% of the net proceeds from the transaction to its Shareholders, with approximately A$34 million to be retained for future activities.

The Board has determined the distribution will be A$0.96 per share, comprising an unfranked dividend component of A$0.79 per share ("Special Dividend") and, subject to shareholder approval, a capital reduction component of A$0.17 per share ("Capital Reduction").

Based on consultation with the ATO, the Company can now advise that the capital reduction amount for tax purpose will be A$0.17 per Share and that we expect the ATO Class Ruling to be finalised on this basis.

Your Board unanimously recommends that Shareholders vote in favour of the Resolution to approve the $0.17 Capital Reduction, which requires a simple majority of 50% or more of votes cast at the general meeting in favour to be passed. For effective delivery of the $0.96 Cash Distribution (if the Capital Return is approved), it is important that Shareholders ensure that their banking details are up to date with Prospect's share registry, Automic.

The Company's future strategy is to be a battery and electrification minerals focused explorer and developer. With the Arcadia transaction now complete, business development and new project generation are our top priorities. The Board believes that, with approximately A$34 million of available cash and continuation of the current management team, that the Company is appropriately resourced to deliver on this strategy.

The Board would like to thank all Shareholders for their support through this transition and we look forward to providing updates on the opportunities ahead.

Prospect Resources Limited ACN 124 354 329 Level 2, 33 Richardson Street. West Perth WA 6005 E: [e-mail] W: prospectresources.com.au

Yours faithfully,

For personal use only

Mark Wheatley

Non-Executive Chairman

This release was authorised by Mark Wheatley, Non-Executive Chairman

For further information, please contact:

Sam Hosack	Nicholas Rathjen
Managing Director	Head of Corporate Development
[e-mail]	[e-mail]

About Prospect Resources Limited (ASX: PSC, FRA:5E8)

Prospect Resources Limited (ASX: PSC, FRA:5E8) is an ASX listed lithium company based in Perth with operations in Zimbabwe. Prospect's flagship asset is the Arcadia Lithium Project located on the outskirts of Harare. Arcadia possesses a world-class hard rock lithium resource and is one of the most advanced lithium projects globally.

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 Australian currency, unless otherwise stated.

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

Page 2 of 2

ersonal use only