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Senior Business Reporter

PREMIER Africa Minerals has received a  major financial boost after Canmax Technologies Co Limited, a producer of lithium electric materials and other related products got a key Chinese regulatory approval for its subscription under which Premier is raising a further £5 million before expenses.

Subscription of shares to be admitted to trading on AIM and admission is now expected to take place on or around 15 September 2023.

Recently, Premier African Minerals Limited and Chinese investor — Canmax whose initial deal was on the verge of collapse entered into a conditional subscription agreement under which Canmax conditionally agreed to subscribe £5 million before expenses for 1 428 571 428 new ordinary shares at an issue price of 0,35 pence.

Canmax, a Chinese firm, is a producer of lithium electric materials and other related products.

On completion of the subscription, Canmax will be interested in 17,4 percent in the enlarged issued share capital of Premier.

Premier intends to use the proceeds of the subscription principally to provide funding to support the ongoing optimisation of the plant at Zulu and general working capital.

In particular, Premier anticipates using the proceeds of the subscription, together with the proceeds of the placing announced on 25 August 2023, to meet the costs associated with the interim mill installation that is expected to see production at 1 000 tonnes per month of spodumene from November this year and the installation of a thickener and larger ball mill that is expected to see the plant achieve design throughput from the first quarter of 2024.

In a trading update, Premier confirmed Canmex received funding approval.

“Premier African Minerals Limited is pleased to announce that Canmax Technologies Co Ltd  has confirmed it has now received Chinese Regulatory Approval for its subscription under which Premier has raised a further £5 million before expenses at an issue price of 0,35 pence per new ordinary share for the ongoing Zulu Lithium and Tantalum Project Optimisation as announced on 30 August 2023,” read the update.

it is revealed in the update that Subscription of shares had been arranged within the Company’s existing share authorities and the 1,428,571,428 new ordinary shares will when issued, rank pari passu in all respects with the existing ordinary shares.

“Application has been made for the Subscription Shares to be admitted to trading on AIM and admission is now expected to take place on or around Friday, 15 September 2023.”

Canmax is listed on the Shenzhen Stock Exchange with a market capitalisation of ¥22,9 Billion (£2,1billion) and has a track record of providing substantial shareholder support.

Recently, Premier Africa Minerals and Canmax managed to mend a contractual disagreement that was threatening the implementation of the Fort Rixon lithium project.

Last year, Canmax provided US$35 million in pre-funding to enable the construction and commissioning of a large-scale pilot plant.

After missing production timelines in June, Premier Africa Minerals issued a force majeure notice to China’s Canmax Technologies citing unforeseen operational hurdles encountered at its Zulu Lithium plant.

This meant that it could not supply spodumene concentrate to Canmax as per the set timelines stipulated in the offtake agreement.

Force majeure is a clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance is beyond the control of the parties.

The plant was said not to be able to produce sufficient spodumene to meet the quantities of the off-take agreement with Canmax.

Canmax wanted to terminate the agreement, a development that could have negatively affected the Zulu Lithium project.

In one of the off-take and Prepayment Agreement updates, Mr Roach said the challenges faced are “beyond the control of Premier” and could not have been foreseen by the investor.

After extensive talks, both firms mended relations.

The Zulu project is generally regarded as potentially the largest undeveloped lithium bearing pegmatite in Zimbabwe, covering a surface of about 3,5 square kilometres, which are prospectively for lithium and tantalum mineralisation.

It produces a rare high-value spodumene, a rock that has a very high mineralisation of lithium.