Premier African Minerals Crashes 27.6% on Dilution Fears

Premier African Minerals (LON: PREM), the AIM-listed junior miner developing the Zulu Lithium and Tantalum Project in Zimbabwe, saw its shares crash 27.6% on Friday after it revealed it needs shareholder approval to issue tens of billions of new shares to plug a funding gap.

The stock fell from Thursday’s close of 0.0127p to 0.0092p, having earlier touched an intraday low of 0.007p, below the prior 52-week low of 0.0125p and far off its 52-week high of 0.31p. Volume topped 3.26bn shares.

Premier has called a general meeting for 23 September to seek authority to issue up to 58.63bn new ordinary shares to support funding at Zulu, where the plant only recently began producing spodumene concentrate, a lithium-bearing mineral used to make battery-grade lithium chemicals. A further 5.40bn shares could settle creditor obligations, including roughly $880,000 owed to J R Goddard Contracting and $289,064 owed to China Zenith Capital, while a separate resolution would allow up to 8.57bn shares for Canmax Technologies under existing conversion rights.

Premier’s financial forecast points to a funding requirement of approximately $19.1m through to the end of 2027, a far bigger gap than the roughly £1m raises completed in April and May, both already flagged as heavily dilutive. The initial share authority is intended to raise around $12.7m, based on an assumed price of 0.016p. Combined, the new shares proposed across all three resolutions exceed Premier’s entire existing share count of 46.07bn. Shareholders will also vote on a further 10-for-one share consolidation aimed at reducing the more than 50bn shares now in issue.

Proactive Investors reported that the scale of prospective dilution drove the sell-off, as holders weigh a much larger dilutive raise on top of losses already suffered over the past year.

Premier itself warned in the general meeting notice that its funds are limited and that failure to secure the additional financing could materially affect both the Zulu project and the group’s financial position.