Premier African Minerals Limited has set a $13.4 million interim budget for the six months to July 2026 to sustain critical operations at its Zulu lithium project near Bulawayo, as the company seeks to steady its finances after production setbacks and mounting debt strained its balance sheet, Mining Zimbabwe reports.
By Ryan Chigoche
The London-listed miner is operating from what it describes as a highly precarious financial position, marked by significant borrowings, pauses in operations, and continued reliance on shareholder, creditor, and partner support to remain a going concern. Management is pursuing a combination of equity fundraising, debt restructuring, and technical modifications to its processing plant in an effort to stabilise output and restore investor confidence.
The company’s largest liability, approximately $46 million, is owed to Canmax Technologies under a 2023 prepayment agreement that financed the construction and commissioning of the Zulu Lithium and Tantalum Project.
Premier failed to meet minimum production targets of 1,000 tonnes of lithium spodumene per month in November and December 2023, triggering a breach of its offtake agreement. Following the default, Canmax exercised its rights to increase the interest rate on the outstanding balance to 12% per annum.
Subsequent amendments to the agreement allow Canmax to receive between 25% and 50% of gross proceeds from lithium shipments, while accrued interest has been converted into equity, leaving the Chinese group with an approximately 13.38% stake in Premier.
In January 2026, the parties agreed to extend the long-stop date under the restated offtake and prepayment agreement to the earlier of June 30, 2026, or the signing of a binding sales agreement with a buyer acceptable to Canmax, alongside arrangements to settle or manage the prepayment and accrued interest.
Canmax also secured the right to participate in future fundraisings to maintain its 13.38% holding on a fully diluted basis. At its discretion, part of the interest owed may be repaid through the issuance of new shares, ensuring its ownership percentage is preserved following any capital raise.
Against this backdrop, Premier’s near-term funding requirement totals about $13.4 million, allocated to plant completion, commissioning, and optimisation ($0.8 million); operational suppliers and critical services ($4.4 million); staff costs and statutory obligations ($3.3 million); and legacy payables of roughly $4.9 million.
The budget assumes no operating revenue during the commissioning and optimisation phase and incorporates a test-run period, while certain supplier arrangements do not require immediate settlement of all outstanding amounts.
With limited cash resources, the company will seek shareholder approval at an upcoming annual general meeting to issue up to 35 billion ordinary shares and authorise directors to grant rights to subscribe for or convert securities into shares.
Conditional on that approval, Premier will also request authority to issue up to a further 5 billion shares, including those required to satisfy Canmax’s previously notified conversion rights.
The board cautioned that failure to pass the resolutions could compel the company to pursue alternative financing, potentially including a discounted open offer, though it said less dilutive options would be prioritised where feasible.
Operationally, Premier’s immediate focus is on installing and commissioning a new spodumene flotation circuit using equipment and process design from Xinhai Technology Processing, replacing reliance on the existing primary flotation configuration.
The company has entered into a procurement, installation, and commissioning contract with Thriving Engineering Private Limited, a wholly owned subsidiary of Xinhai, covering delivery of flotation equipment by the end of February 2026, on-site engineering support, and a process performance guarantee tied to achieving targeted concentrate grades and recoveries at a design throughput of 15 to 20 tonnes per hour, subject to feed material meeting agreed specifications.
Subject to logistics and site readiness, Premier expects the upgraded flotation circuit to be installed, commissioned, and producing spodumene concentrate in the second quarter of 2026. Managing Director Graham Hill said the contractual framework links elements of payment to defined performance criteria, aligning contractor incentives with the processing outcomes required and keeping the work programme within the extended long-stop timeline.
The Zulu project forms part of Zimbabwe’s broader push to strengthen its position in the electric vehicle battery supply chain. Mining remains the country’s largest foreign currency earner, contributing between 12% and 15% of gross domestic product, while lithium exports have positioned Zimbabwe as Africa’s top producer and a top-10 global supplier.
Beyond Zulu, Premier’s portfolio includes tungsten, rare earth elements, lithium, and tantalum assets in Zimbabwe, as well as lithium and gold projects in Mozambique, spanning brownfield developments with near-term production potential to early-stage exploration.
