The Premier African Minerals Ltd (LON: PREM) share price plunged 50.7% after the company confirmed that it had yet to sign a revised offtake and prepayment agreement with Canmax Technologies Co., Ltd within the provided timeline that expired on 25 June 2023.
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The lithium mining company noted that Canmax had made unacceptable proposals, including converting the pre-payment amount into either a convertible debt instrument or a proportionate equity in Zulu if the company cannot meet its delivery obligations.
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Canmax also wants Premier African Minerals to sell all the concentrate produced at Zulu, not only that from the Pilot Plant, at fixed prices with limited ability for Premier to accommodate cost variations that may occur due to factors beyond it, such as high inflation levels.
PREM also issued an update on the ongoing modification of the Zulu lithium plant. Stark International Projects has confirmed that the civil works associated with installing the UV sorters and hydro zier have been completed, and the installation will start this week.
While Premier will miss the initial shipment scheduled for June 2023, Stark believes all subsequent shipments should occur with minimal hitches. Premier has also issued a Force Majeure notice about the Agreement signed with Canmax due to the failure to meet production targets.
The company has established that the plant cannot meet its concentrate production targets due to unforeseeable circumstances. It has issued the FM notice to Canmax, which was served on 25 June 2023.
George Roach, Premier African Minerals CEO, commented: “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 a whole. 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.”
*This is not investment advice.
Premier African Minerals (PREM) share price.
The Premier African Minerals (PREM) shares fell 50.72% to trade at 0.34p, from Friday’s closing price of 0.69p.
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