eBusiness Weekly
Business Writer
Zimbabwe lithium miner, Premier African Minerals (Premier)’s shares took a nosedive on Monday, falling 40 percent, following the release of an update on their offtake and prepayment agreement with Canmax Technologies Company (Canmax).
Canmax is a producer of lithium electric materials and other related products.
Premier African Minerals are reported to have missed certain production deadlines and are now in the hands of Canmax, who now possesses the ability to terminate the agreement and request funds be returned.
According to a force majeure notice issued by Premier on Monday, Premier highlighted two suggestions proposed by Canmax, the first one being converting the prepayment amount into convertible debt or issuing equity in their Zulu Lithium project, and the sale of all offtake to Canmax at fixed price.
According to online reports these amendments would severely erode shareholder value.
Premier African Minerals is an emerging tungsten producer from the RHA Tungsten Mine approximately 80km from Bulawayo and is advancing the sizable Zulu Lithium and Tantalum Project (“Zulu Project”) in Zimbabwe.
In addition, the company has an interest in MN Holdings Limited, the owner and operator of the Otjozondu Manganese Mining Project in Namibia.
George Roach, Premier African Minerals CEO commented saying the issues at Zulu have been acknowledged by the plant contractor and could have not been foreseen by Premier.
“The issues at Zulu have been acknowledged by the plant contractor to be beyond the control of Premier, and could not have been foreseen by Premier.
“Whilst I am deeply upset and committed to finding an equitable way forward with Canmax, that solution should strive to be fair and reasonable and in the best interests of all Premier shareholders as whole,” said Roach, Premier African Minerals CEO.
“Whilst my focus is squarely on resolution of the plant issues during this period of FM and production at Zulu, I will diligently strive to resolve the issues with Canmax and will actively pursue alternative strategies,” he added.
However, Premier also said both parties continue to express their intention to reach an agreement and to proceed with the conclusion of a suitable amendment to the agreement and no amendment has been signed to date, nor will an amendment containing certain of the terms now currently proposed by Canmax, be acceptable to Premier.
“Premier remains committed to an equitable solution and will continue to engage with Canmax to the extent to which Canmax is so prepared.
“As previously announced, Canmax previously confirmed that their intention was to continue to support Premier and not to terminate the agreement providing that an addendum between the parties is entered into on or before 25 June 2023,” reads part of the statement.
Earlier in June, Premier had informed the market that the parties were “close to agreement” over a new deal that could have seen larger offtake and revenue sharing.
