Zulu lithium plant ready to run
AIM stock exchange-listed mining and exploration company Premier African Minerals has announced that the Zulu lithium processing plant is scheduled to start operating soon after having run with the primary ore feed.
According to Premier African Minerals CEO George Roach, the plant has now run with the primary ore feed, and the optimization of the new components continues. Roach said over the coming days, plant operations are expected to stabilize as a range of minor issues is resolved by the plant operator and contractor. He said Premier expects the plant to operate continuously, as previously announced, before the end of February 2024.
“Premier is both encouraged and simultaneously frustrated, as much by the fact that the newly installed mill exceeds expectations and by a number of system and control issues that are interrupting operations right now. Premier expects to provide a further update before the end of February 2024,” Roach said.
Premier is under pressure to ensure the plant is running due to the terms of its offtake agreement with Canmax Technologies Co., Ltd, where Canmax purchased in advance US$34,644,385 worth of lithium spodumene concentrate to be sold by Premier (“Advance Purchase Amount”) with the proceeds used to construct and commission the plant at Zulu. The parties agreed to supply the Product for the Advance Purchase Amount plus accrued interest by Canmax following the breach of a first contract agreement by Premier.
Recently, Premier received a notice of election under the Agreement from Canmax Technologies Co., Ltd., following its failure to deliver at least 1,000 tonnes of lithium spodumene per month for the months of November 2023 and December 2023, to have the current outstanding balance owed to Canmax of US$3 million (US$1.5 million per month) of the monthly payment carried forward.
According to Premier CEO George Roach, in accordance with the Agreement, the interest rate for the outstanding balance of the prepayment amount will be increased to 12% per annum with effect from 1 December 2023.