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Oliver Kazunga, Harare Bureau
UNITED Kingdom-listed developer of the Zulu lithium project in Insiza, Premier African Minerals and its Chinese partner, Canmax Technologies, have agreed on amendments to their offtake and prepayment deal signed in August last year.
In 2022, Canmax provided US$34,7 million in prefunding for the construction of a large-scale pilot plant at Zulu and expected to receive lithium concentrate from the local operation by March this year.
However, the Alternative Investment Market-listed group has not been able to fulfil its obligations citing unforeseen operational challenges encountered along the way.
Under the new arrangement, Canmax will now receive direct shares in Zulu or a stake in Premier if the product is not delivered by April 1 this year.
Premier said together with Canmax, they had reached agreement on certain amendments to the restated offtake and prepayment agreement, which the parties had previously agreed in August 2023 in respect of the Zulu project.
The latest development, Premier said in a statement, resets its strategic relationship with Canmax.
“Premier and Canmax have agreed that in respect of any prepayment amount plus interest, which remains outstanding on April 1, 2025 and in the event that Premier has not delivered the required product or provided cash 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 US$100 million, which more accurately reflects the capital investment in Zulu to date.”
Alternatively, it said Canmax can elect to accept settlement in new Premier ordinary shares to be issued at the 20-day volume-weighted average of the group’s ordinary share price prior to the settlement date.
Once fully operational, the lithium processing facility is expected to produce 4 000 tonnes of lithium concentrate per month.
Premier chief executive officer, Mr George Roach commented: “The support the company has received from our shareholders will allow completion of the spodumene float commissioning and the installation of an alternative set of floatation cells, which we expect will meet our objective to produce and deliver spodumene at grade and meet recovery targets.
“Our focus will be centred on making Zulu deliver.”
Lithium has become a globally sought after mineral because of its growing widespread use in the production of lithium batteries for electric cars.
Several Chinese firms have stampeded to invest in Zimbabwe’s lithium sector to take strategic positions for the supply of lithium new energy mineral as the world transitions to clean energy sources.
Some of the Chinese companies with lithium operations in the country include Zhejiang Huayou Cobalt, Sinomine Resource Group, Chengxin Lithium Group and Yahua Group.
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