Leading the way as the worst performer on the Australian share market on Wednesday has been the Prospect Resources Ltd (ASX: PSC) share price.
In afternoon trade, the ASX mining share is down a massive 92% to 7.7 cents.
Why is the Prospect Resources share price crashing?
The good news for shareholders is that the Prospect Resources share price crash is for a good reason and not because of a bad update.
Earlier this month, shareholders were asked to vote on a capital return following the completion of the sale of the company's 87% interest in the Arcadia Project for net proceeds of US$342.9 million.
Shareholders unsurprisingly overwhelmingly approved the plan to distribute most of these proceeds by way of a 96 cents per share distribution.
This distribution comprises an unfranked dividend component of 79 cents per share and a capital reduction component of 17 cents per share.
This morning Prospect Resources shares traded ex-capital return. This means that the rights to the impending capital return will remain with owners of its shares at yesterday's market close and not transfer to anyone buying shares from today onwards. As a result, its shares have fallen to reflect this.
When is payday?
Eligible shareholders can now look forward to a big pay day early in August.
According to the mining company's timetable, it is intending to pay both components of the capital return to shareholders next week on Thursday 4 August.
What's next?
This isn't the end of Prospect Resources. It recently laid out its future plans following the Arcadia Project sale. It said:
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.
