TIDMPREM
RNS Number : 5866G
Premier African Minerals Limited
20 July 2023
20 July 2023
Premier African Minerals Limited
Offtake and Prepayment Agreement Update
Zulu Update
Premier African Minerals Limited ("Premier" or the "Company"),
provides a further update on both the progress at the Zulu Lithium
and Tantalum Project ("Zulu") and the Offtake and Prepayment
Agreement ("Agreement") entered into between Premier and Canmax
Technologies Co., Ltd ("Canmax") as announced on 6 June 2023.
Offtake and Prepayment Agreement
On 28 June 2023, the Company received a purported notice of
termination of the Agreement from Canmax (following service of a
Force Majeure Notice on Canmax on the 25 June 2023) which demanded
the Company settle the prepayment amount of US$34.7m within 90
days. The Company has disputed the appropriateness of the notice of
termination based on legal advice.
Subsequently, the Company has received, and acknowledged, a
further written notice from Canmax on 17 July 2023 that there is a
dispute under the Agreement and notes that both parties are now
required to seek to resolve the dispute in good faith by "friendly
negotiation". To the extent that the parties are unable to resolve
the dispute in 10 days, then either party may then refer the
dispute to arbitration in Singapore. These discussions remain
ongoing and nothing has been agreed at this time.
Zulu plant modification update
In regard to plant modification progress at Zulu, the past three
weeks have now seen the installation of the UV sorters, a new frame
to the EDS mill and the Hydro Sizer (collectively the "Upgrades").
The commissioning of the Upgrades remains ongoing with the UV
Sorters expected to increase feed grade with resultant efficiency
enhancements to recovery and production; furthermore, the Hydro
Sizer is expected to improve efficiency in recovery of correctly
sized milled ore.
Whilst the above Upgrades may improve throughput of the plant at
Zulu, it is unlikely to resolve the formal state of Force Majeure
as announced on the 26 June 2023, that is still expected to endure
for approximately 14 weeks.
The Zulu design, procurement, installation, and commissioning
contractor, Stark International Projects Limited ("Stark"), have
confirmed that they intend to produce spodumene from the plant at
Zulu over the course of July 2023. At this stage and unless Premier
is advised otherwise by Stark, the Stark production projections
included in the announcement dated 25 May 2023 remain achievable
apart from the month of June 2023 as advised on 26 June 2023.
Shareholders are reminded that Premier is working under the
guidance of Stark on the ongoing optimisation and modification of
the plant and that Premier will formally communicate when sign -off
of the plant including operational control of the plant has moved
onto Premier.
Funding update and Special General Meeting
Based on current Spodumene prices and costs estimates there has
been no change to the Board's expectation that Zulu, when fully
operational, will operate profitably. Zulu is and remains debt free
and currently unencumbered by the provisions of the Agreement.
In particular, whilst the Company is actively involved in
alternative funding negotiations to facilitate ongoing development
at Zulu and the substitution of the Agreement with Canmax who have
made it clear that they seek repayment and cancellation following
the remedy of the Force Majeure, there is no certainty at this time
that these alternative funding arrangements will be concluded.
Premiers' cash reserves remain constrained, and this has been
exacerbated following rejection of the special resolution proposed
to shareholders at the Company's Annual General Meeting ("AGM") to
disapply pre-emption rights, as announced on 26 June 2023. The
Board noted the limited number of proxy votes cast at the AGM, and
in particular, the Board believes that substantially more
shareholders would have voted at the AGM in light of recent
developments. Accordingly, the Board intends to call a special
general meeting to be held on or around the 12 August 2023 in
London where shareholders are strongly encouraged to vote in either
person or through the proxy of the Chairman of the meeting. A
further announcement will be made in due course.
The Company is also exploring potential options to secure
interim short-term funding from certain members of the Board.
MAR (Market Abuse Regulation)
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK Domestic Law by virtue of the European Union (Withdrawal) Act
2018.
The person who arranged the release of this announcement on
behalf of the Company was George Roach.
Enquiries:
George Roach Premier African Minerals Tel: +27 (0) 100
Limited 201 281
Michael Cornish Beaumont Cornish Limited Tel: +44 (0) 20
/ Roland Cornish (Nominated Adviser) 7628 3396
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Douglas Crippen CMC Markets UK Plc Tel: +44 (0) 20
3003 8632
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John More/Toby Shore Capital Stockbrokers Tel: +44 (0) 20
Gibbs Limited 7408 4090
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Notes to Editors:
Premier African Minerals Limited (AIM: PREM) is a
multi-commodity mining and natural resource development company
focused on Southern Africa with its RHA Tungsten and Zulu Lithium
projects in Zimbabwe.
The Company has a diverse portfolio of projects, which include
tungsten, rare earth elements, lithium and tantalum in Zimbabwe and
lithium and gold in Mozambique, encompassing brownfield projects
with near-term production potential to grass-roots exploration. The
Company has a ccepted a share offer by Vortex Limited ("Vortex")
for the exchange of Premier's entire 4.8% interest in Circum
Minerals Limited ("Circum"), the owners of the Danakil Potash
Project in Ethiopia, for a 13.1% interest in the enlarged share
capital of Vortex. Vortex has an interest of 36.7% in Circum .
In addition, the Company holds a 19% interest in MN Holdings
Limited, the operator of the Otjozondu Manganese Mining Project in
Namibia.
Ends
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END
MSCEAAXNFASDEAA
(END) Dow Jones Newswires
July 20, 2023 02:00 ET (06:00 GMT)
Premier African Minerals (AQSE:PREM.GB)
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