Investors flock to Premier for Zulu off take

ZIMBABWE-FOCUSED miner Premier African Minerals says it has been approached by a number of other mining firms in the country to talk about its future plans for Zulu lithium for either direct equity investment or future offtake.

Premier owns the RHA Tungsten, Zulu lithium and tantalite projects in Zimbabwe.

The mining firms that have contacted the company are already well-established in Zimbabwe, according to Premier chief executive George Roach, who recently provided an update to shareholders.

"Premier has received a number of requests from other mining companies already well-established in Zimbabwe to discuss our intentions in regard to the future of Zulu for either future offtake and/or direct equity investment into Zulu," Roach said.

"At the same time, Premier is in discussions intended to see a quick increase in production and a broadening of the product base as the focus of production at the Zulu plant has only been on the production of spodumene. This is likely to take the form of fully funded extensions and modifications to the existing plant.

"In that regard, I remind shareholders that the existing plant will only process approximately 60% of the ore feed through to the floatation circuits and the first upgrades will be targeted at increasing floatation capacity to increase concentrate production."

The company also revealed that it had finished building a lithium processing plant at its Zulu mine and was expected to start production of spodumene concentrate later last week.

Spodumene is a lithium ore with high concentration of lithium, a key component in the production of electric vehicle batteries.

Premier built the plant, which has capacity to produce nearly 50 000 tonnes of spodumene concentrate annually, as part of a US$35 million offtake deal signed last year with China's CanMax Technologies (formerly Suzhou TA&A).

"We expect to produce spodumene, a lepidolite mica rich concentrate and a tantalum rich concentrate late this week provided that final formal outstanding approvals from certain Zimbabwean authorities are received," he said.

The Premier chief said an error on the part of the plant designers led to a late change in reagent dosing and reagent requirements.

This, and a combination of late delivery of certain components of the floatation system of the plant, a severe wet season in the country and the continued issues of slow import clearance of essential plant at Beitbridge, have all combined to cause Premier's self-imposed internal commissioning target of February 14, 2023 to be missed, he said.

"I expect to be in a position to provide guidance on operating projections in the coming weeks," he said.

Roach said Premier was adequately funded to that projected date and remained in funds at this time. He said it may be necessary to either increase the prepayment amount under current Marketing and Pre-Payment Agreement or accept a short-term loan facility secured against spodumene to be produced to meet operating costs at Zulu in the coming weeks.

Should that arise, it will be announced at that time, he said.

In accordance with the agreement entered between Premier and CanMax Technologies, Premier was required to supply the product by March 31, 2023. CanMax Technologies will begin charging interest at the rate 3,5% per annum on the prepayment amount of US$35 million from April 1, 2023.

Premier must start supplying CanMax Technologies with the product in line with the agreement by May 30, 2023.

In the event that this is not done, CanMax Technologies will have the right to terminate the contract by giving written notification to Premier, and Premier will be required to pay the prepayment amount in full, plus interest, within 90 days of receiving such notice of termination.