Premier African Minerals Limited has issued a further 591 million new shares after its strategic partner, Canmax Technologies Co., Ltd, elected to convert accrued interest into equity under the Zulu Lithium and Tantalum Project offtake and prepayment arrangements, Mining Zimbabwe can report.
By Rudairo Mapuranga
The conversion, announced this week, relates to £177,329 (approximately US$242,949) in accrued interest owed to Canmax under the Restated and Amended Offtake and Prepayment Agreement. The amount has been settled through the issuance of new ordinary shares at an issue price of 0.03 pence per share, consistent with Premier’s most recent fundraising.
The interest conversion forms part of the addendum to the offtake and prepayment agreement announced in December 2024, which allows Canmax to convert outstanding interest into equity rather than receive cash repayment. Premier stated that the newly issued shares will rank pari passu with existing ordinary shares and are expected to be admitted to trading on AIM around 11 February 2026. Following the issuance, Premier’s total number of ordinary shares in issue has risen to approximately 13.9 billion, continuing a sharp expansion of the company’s share capital over the past two years.
The Canmax arrangement dates back to August 2023, when Premier secured a prepayment facility linked to a long-term offtake agreement for spodumene concentrate from the Zulu Lithium Project. The facility was intended to accelerate Zulu’s transition into production. However, ongoing operational challenges at the processing plant, including lower-than-expected recoveries and repeated optimisation efforts, have delayed meaningful cash flow from Zulu. As a result, Premier has increasingly relied on equity-based solutions to manage liabilities tied to the project.
Since late 2024, Premier has repeatedly amended the Canmax agreement to extend long-stop dates, allowed accrued interest to capitalise rather than be settled in cash, raised equity at progressively lower issue prices, and used shares to settle suppliers, contractors, and former directors. The interest conversion announced this week follows a £1 million equity raise in January 2026, also priced at 0.03 pence per share, which itself involved the issuance of more than 3.8 billion new shares.
Premier’s issued share capital has expanded rapidly as funding pressures persist. At the time of the original Canmax agreement in 2023, the company had a substantially smaller share base. Today, with nearly 14 billion shares in issue, each new equity settlement further dilutes existing shareholders. While Premier has consistently described these arrangements as necessary to preserve cash and maintain operational continuity at Zulu, the cumulative impact has been a material reduction in shareholder value on a per-share basis.
For Canmax, the conversion of interest into equity strengthens its position within Premier while avoiding near-term repayment risk. For Premier, the move reduces immediate cash obligations but reinforces the company’s dependence on equity issuance to manage project financing. The company maintains that Zulu’s fundamentals remain intact and that recent funding will support the installation of a new flotation plant aimed at improving recoveries and throughput. Whether this translates into sustained production—and a shift away from dilution-driven funding—remains a key question for investors.
Premier has not indicated that the Canmax conversion is the final equity settlement under the agreement. With long-stop dates extended into mid-2026 and interest continuing to accrue, further conversions remain a possibility if operational cash flow does not materialise. For shareholders, the latest announcement serves as another reminder that Zulu’s development has come at a high equity cost—and that execution at the project level will be critical in determining whether dilution slows or continues.
