Zimpapers Logo

Nqobile Bhebhe, [email protected]

PREMIER African Minerals is in the market to raise £2,4 million (about US$3,15 million ) on before expenses at an issue price of 0,275 pence per new ordinary share to fund immediate operations as negotiations with Zimbabwe-based lenders for working capital facilities are progressing.

The subscription was issued last Thursday.

The lithium firm is confident that it will start commercial production in late February with first shipments expected in March.

Funds raised will be used specifically for direct operating expenses at Zulu that include final payments related to the thickener purchase and installation, final payments related to the ball mill and associated hydrosizers, transport and installation, plant operating spares and reagents, mining costs, and day to day operating expenses including diesel.

In addition, Premier African Minerals said that the new ball mill at the site is installed and going through a test run.

Chief executive officer, Mr George Roach said “This placement assures Zulu of plant startup, subject only to suppliers meeting their obligations and undertakings.

“This has and remains Premier’s single most important objective at this stage. That is targeted for next week (this week) and remains on target at this time.”

He said early indications are that subsequent working capital finance will be available from commercial lenders at  Zulu when production is underway as Zulu must begin to fund its operations without the assistance of Premier once commercial production has commenced.

According to Premier, on January 18, the firm elected to make a significant expansion in the mining operations to facilitate delivery of ore with less country waste to ensure against any residual issues with the sorters (which continue to be optimised) when plant production recommences at Zulu.

And while the mill has now been delivered and installed at Zulu, there was a delay with the delivery which further constrained Premier’s cash resources.

“Premier continues to engage with Zimbabwean-based lenders for working capital facilities at Zulu — these potential lenders need to see production from Zulu and while Premier strongly believes that Zulu will be able to source a working capital facility, this is now largely dependent on Zulu being in production.”

Premier is of the view that securing funding through the latest subscription is the best immediate solution to securing further project funding in order to see the commencement of production this month.

“Once production has commenced, Premier believes that it should see one or more of the alternatives to equity-based funding materialise. On this basis, Premier’s current expectation is that it is now fully funded for the first production at Zulu.”

On the latest subscription, CMC Markets UK Plc trading as CMC CapX, acted as the Company’s placing agent in respect of the placing.

Application will be made for the Subscription Shares to be admitted to trading on AIM and admission is expected to take place on or around February 21.

In recent weeks, the mining entity with operations at Fort Rixon lithium mine in Matabeleland South Province has been taking delivery of an assortment of strategic plant components and upscaling instalment.

The mining entity has set a monthly production target of up to 1 000 tonnes of spodumene.

00

Spodumene is a battery-grade product, which is key for the future of electric cars.

In 2022, Last year, Canmax Technologies Co Ltd provided US$35 million in pre-funding to enable the construction and commissioning of a large-scale pilot plant.

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

After missing production time lines 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. After extensive talks, both firms mended relations.