eBusiness Weekly
Oliver Kazunga
THE offtake and prepayment agreement previously entered into between Premier African Minerals and a Chinese company, Canmax hangs in the balance if an addendum to the original deal is not signed before June 25 this year.
Canmax formerly Suzhou TA& A Ultra Clean Technology last year signed an offtake deal with Premier where the latter was expected to start shipping spodumene concentrate from its Zulu lithium and tantalum project in Insiza district, Matabeleland South province by March 30 this year.
Premier missed its first quarter early production deadline at Zulu due to delays in the final approval from Zimbabwean authorities, and the late delivery of outstanding reagent.
The reagent was short-ordered due to an error on the part of the Zulu plant supplier.
Premier, which commenced mining operations at Zulu recently, has since begun commercial production.
“Canmax have confirmed that their intention is to continue supporting Premier and not to terminate the agreement providing that an addendum between the parties is entered into on or before 25 June 2023.
Canmax now have the right to terminate the agreement by notice in writing to Premier and Premier will need to enact repayment of the prepayment amount plus interest in full within 90 days of such termination notice,” said the United Kingdom-headquartered company.
Moreso, Premier has been accruing interest at 3,5 percent per annum – subject to adjustment from time to time in accordance with the loan prime rate as published by the People’s Bank of China — which will also be owed to Canmax. Premier said on June 6, however, that it is in advanced discussions with Canmax pertaining to an addendum to the agreement.
Canmax and Premier are in advanced discussions pertaining to an addendum to the agreement to allow for the adjustment in the pricing mechanism whereby both parties would equally share in the gross revenue from the sale of lithium hydroxide produced from spodumene supplied by Premier after deduction of the production costs of both companies.
The addendum will also allow further pre-purchase of spodumene by Canmax from Zulu to assist with the ongoing operational costs associated with the revised timelines and expected production figures announced towards the end of last month.
Premier chief executive officer George Roach was quoted as saying, “I am deeply appreciative for the constructive discussion, further assistance, and confirmation of our relationship with Canmax.”
