Premier African Minerals shares plunge 40%
Shares in Premier African Minerals plunged 40% on Monday after the company declared force majeure at its Zimbabwe lithium mine, citing a defect at its processing plant.
A Premier statement said the plant could not produce sufficient spodumene concentrate to meet the conditions of its offtake agreement with China’s Canmax Technologies.
Chinese lithium battery company Canmax last year provided $35 million for the construction of a pilot plant at Premier’s Zulu lithium project in exchange for the annual supply of up to 50,000 metric tons of spodumene concentrate.
Premier said it issued a force majeure notice to Canmax on June 25 because milling problems at its recently completed plant had affected production plans. The plant contractor was working to resolve the problem, it added.
“The company is unable to deliver product within the stipulated dates as set out in the agreement,” Premier said.
Triggering a force majeure clause in contracts allows certain terms of an otherwise legally binding agreement to be ignored because of unavoidable circumstances.
The two parties are negotiating possible changes to the current agreement, Premier said, adding that Canmax has proposed to convert its $35 million cash injection into debt or shares. Canmax is also a 13.38% shareholder in Premier.
A Canmax representative was not immediately available for comment.
Hinting at a growing rift between the companies, Premier said it was reconsidering its exclusive relationship with Canmax, having received approaches from competing lithium processors in China and Europe.
“To date, Premier has resisted serious review of any of these approaches in the light of the agreement with Canmax. However, in the context of the current stage of discussions with Canmax in respect of the amended agreement, Premier will now engage with these other interested parties,” it said.
Premier African Minerals Limited
Premier African Minerals Limited is currently developing a portfolio of strategic metals and mineral projects located across Africa.
Premier is an emerging tungsten producer from the RHA Tungsten Mine and is advancing the sizeable Zulu Lithium and Tantalum 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.
The Company has accepted a share offer by Vortex Limited (“Vortex”) for the exchange of Premier’s entire 4.8% interest in Circum Minerals Limited (“Circum”), the owners of the Danakil Potash Project in Ethiopia, for a 13.1% interest in the enlarged share capital of Vortex. Vortex has an interest of 36.7% in Circum.
Premier has a long history of project discovery, acquisition and development across Africa and the Company is managed by a dedicated team of professionals which have a strong track record is project development and value creation.