Premier African Minerals Ltd on Tuesday reached an agreement with Canmax Technologies Co Ltd for offtake and prepayment of the Zulu Lithium and Tantalum Project.
The British Virgin Island-registered mining company said it had revised its contract with Canmax, a Suzhou, China-based technology company focused on lithium battery research and development.
Premier African’s Zulu Lithium and Tantalum project, located in Zimbabwe, saw inconsistent recovery of the mineral spodumene in October, and has suffered delays while the company installs alternative flotation cells.
Canmax, the project’s principal investor and funding partner, previously agreed to offtake terms back in August 2023. Premier African has adjusted Canmax’s settlement options for any amounts outstanding as of April 1.
‘In the event that Premier African has not delivered the required product or provided cash settlement to settle the prepayment amount plus interest, then Canmax will be entitled to receive, as settlement of the outstanding prepayment amount plus interest, a direct interest in Zulu Lithium based on a project valuation of $100 million which more accurately reflects the capital investment in Zulu to date’, Premier African said.
Alternatively, Canmax can accept new shares in Premier African issued at a 20-day volume-weighted average price.
Premier African said it will also extend Canmax’s existing security with a fixed charge over Zulu Lithium shares, in acknowledgement of the project’s delays.
The mining company added that Canmax is currently interested in more than 10% of Premier African capital. After consulting with shareholders and obtaining director approval, Premier African has granted Canmax the right to maintain interest in Premier African of around 13% by capitalising the interest Canmax is currently owed.
‘Our focus will be centred on making Zulu deliver’, Premier African Chief Executive Officer George Roach said. He added that the company expects to ‘deliver spodumene at grade and meet recovery targets’.
Premier African Minerals shares closed up 2.1% at £0.054 each on Tuesday afternoon in London.
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