mbulelo smpofu
Nqobile Bhebhe, nqobile.bhebhe@chronicle.co.zw
Premier African Minerals Limited has raised £1,2 million through the issuance of new ordinary shares to fund the final commissioning and optimisation of the Primary Flotation Plant, as well as the purchase of the Secondary Flotation Plant in Zimbabwe.
According to the company, part of the proceeds will be used to settle immediate creditor obligations and pay essential staff salaries before operations resume.
The company has faced challenges with the commissioning of the lithium flotation circuit at its Zulu plant in Insiza District, Matabeleland South, which has been inactive since July 2024. A successful three-to-five-day test run of the plant, scheduled for late January or early February 2025, is critical to restarting production.
The Zulu plant’s prolonged inactivity and the need for additional funding have raised concerns.
However, the company’s trade creditors have remained supportive, awaiting the completion of remedial work. Premier has indicated ongoing negotiations with certain creditors of the company and Zulu, exploring the possibility of settling liabilities through the issuance of new shares. The company expects to reach agreements with some of these parties soon.
Premier stated that the net funds raised will also be used to support the completion of the three-to-five-day test run of the flotation plant and the acquisition and commissioning of the Secondary Flotation Plant.
“The estimated cost is US$800 000, inclusive of the purchase of the spodumene flotation plant, part payment to the Government of Zimbabwe for deferred VAT and other statutory requirements of US$250 000, part payment of salary and wage arrears totalling US$400 000 and part payment to specific suppliers for plant spares and maintenance of US$180 000. Any remaining balance will be allocated towards part payments to contractors and other creditors to ensure ongoing commercial operations.”
Last week, Premier African Minerals Limited announced a fundraising initiative on Thursday, involving the issuance of up to 8,263 million new ordinary shares of no par value each at an issue price of 0,0275 pence per share to raise gross proceeds (before fees and expenses) of up to £2,3 million.
In addition to the Retail Offer, the company conducted a placing of new ordinary shares, raising gross proceeds of £1,2 million. The issue price represented a discount of approximately 30%.
“As part of the fundraising, the company is launching a separate Retail Offer to raise the remaining balance of up to £2,3 million at the issue price.
“The board values its retail shareholder base, which has continued to support the company alongside various institutional investors,” the company said.
“Given the strong support of our retail shareholders, the company believes it is appropriate to provide retail shareholders with the opportunity to participate in the Retail Offer. For the avoidance of doubt, the Retail Offer is not part of the Placing. The results of the Retail Offer are expected to be announced on January 21, 2025.”
In December 2024, Premier amended its Offtake and Prepayment Agreement with Canmax Technologies Co., Ltd concerning the Zulu Lithium and Tantalum Project.
The updated agreement, originally established in August 2023, modifies settlement options for Canmax and extends security provisions due to production delays.
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Under the revised terms, if any prepayment and interest remain outstanding as of 1 April 2025, Canmax will be entitled to a direct interest in Zulu, valued at US$100 million, or new Premier shares at a price based on the prior 20-day average.
The amendment reflects the capital investment in Zulu to date and provides an alternative settlement to cash or product delivery. Additionally, Premier has agreed to extend Canmax’s security by offering a fixed charge over the shares of Zulu Lithium, without affecting Premier’s other assets.
Canmax also retains the discretionary right to convert interest owed into new Premier shares, maintaining a 13.38% stake in the company post-funding.
Canmax, which holds over 10 percent of Premier’s issued share capital, is listed on the Shenzhen Stock Exchange under the ticker 300390. The company has a market capitalisation of approximately US$2,6 billion and has historically provided substantial support to Premier.
Siphakeme .Mnindwa
