Premier Africa Minerals Limited is exploring corporate rescue and asset liquidation options for its Zulu lithium project amid significant financial challenges.
By Ryan Chigoche
Corporate rescue, also known as business restructuring, is a legal framework in Zimbabwe designed to help distressed companies restore solvency and resume operations.
The process aims to balance the interests of creditors, shareholders, employees, and other stakeholders while safeguarding the company’s economic value.
In this regard, Premier is in ongoing discussions with all stakeholders, particularly Zulu’s prepayment and offtake partner, to find a viable solution.
With liabilities surpassing assets by $47.8 million, the company has shifted its strategy to address the financial strain and ensure the project’s survival.
The Zulu plant has been inactive since July 2024, and as of February 28, 2025, Premier’s total unaudited liabilities had reached $64.3 million.
This includes $46.4 million owed to Canmax Technologies Co. Ltd under the Offtake and Prepayment Agreement, along with unsettled interest of $11.7 million.
Additionally, around $17 million is owed to trade creditors, including unpaid salaries. In light of these financial pressures, Premier urgently requires funding to maintain critical operations at both the Premier and Zulu sites.
The company has continued to receive support from its principal trade creditors, who are awaiting confirmation that the necessary remedial work on the flotation plant will be completed and that Zulu’s operations will be promptly recommissioned.
Last year, Premier considered selling the Zulu plant or bringing in an investment partner via a partial sale or joint venture. However, a recent corporate update indicated a shift in focus, with the company now actively pursuing funding solutions for the Zulu project. This includes the possibility of initiating a corporate rescue process.
“While this remains our preferred solution, Premier is also engaged with other new potential investors. In the absence of a financing solution, Premier may need to consider alternative options for Zulu in the interests of its creditors and shareholders, which may include raising financing at the subsidiary level, a sale of Zulu while keeping it in a state of care and maintenance, the liquidation of the assets of Zulu, or other options available under Zimbabwean laws, including a corporate rescue of Zulu,” the company said in a statement.
This shift in strategy comes after a previous announcement on January 21, 2025, in which Premier revealed that a proposed £3.5 million fundraising initiative had not been successfully closed.
The funds were intended to support the final commissioning and optimization of the Primary Spodumene Flotation Plant and the purchase of a Secondary Spodumene Flotation Plant—key steps necessary for the full recommencement of operations at Zulu.
Premier remains focused on addressing the immediate financial needs to restart operations.
The company views these steps as vital not only for Zulu’s recommencement but also for resolving trade creditor claims, which are critical to facilitating a short-term test run of 3 to 5 days.
The company, a UK-based mining and exploration firm, has faced difficulties in commissioning the lithium flotation circuit at its Zulu plant, resulting in missed delivery deadlines.
At one point, Premier issued a force majeure notice to China’s Canmax Technologies, citing operational hurdles at the Fort Rixon facility. The plant struggled to produce sufficient spodumene to meet the required quantities stipulated in the off-take agreement with Canmax, prompting the latter to consider terminating the agreement—a move that could have severely impacted the Zulu Lithium project.
However, after extensive discussions, the companies managed to restore their partnership, offering hope for the project’s future despite the ongoing challenges.
As Premier Africa Minerals navigates through its financial difficulties, the company is focusing on finding viable solutions to secure the future of its Zulu lithium project.
While the road ahead remains challenging, ongoing discussions with stakeholders and potential investors could provide the necessary support to restart operations.
The Zulu plant has the potential to be a valuable asset, especially with the rising global demand for lithium.
