Premier African Minerals shares sink after Zulu update and Q&A session

Premier African Minerals shares sank in early trade on Tuesday as investors dumped their stock after a Zulu update and media appearance yesterday.

The Zimbabwe-focused miner issued an update on their Zulu lithium project yesterday before holding a Q&A session for investors. Neither have appeared to impress investors.

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Premier African Minerals shares were trading down over 6% in early trading on Tuesday.

The company issued a statement yesterday outlining plans for further testing and optimisation at the Zulu plant. However, it requires production to be halted and operations are being suspended.

The statement effectively confirmed the company will not meet a number of upcoming production deadlines and will face penalty payments under their offtake agreement with offtake partner Canmax.

In addition, the statement did little to reassure investors the project had the capability to produce the required amount of lithium offtake at the required grade.

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Premier said the plant had produced the required grade when the ore was processed to remove contaminants, but it requires further optimisation to do this at scale. This could take many months to achieve and lead to many more penalty payments.

Efforts by Premier African Minerals to reassure investors through a Q&A session yesterday evening appear to have failed to reinvigorate the bulls.

Management suggested the company needed to bring in more competent personnel in the future and went to great lengths to emphasise they hadn’t misled investors.

These are not the messages investors want to hear in the midst of a global race to establish lithium production to feed the burgeoning electric vehicle revolution.

We have written before explaining the deep value in Premier African Minerals’ resources may not be transferred to shareholder value as a result of poor management decisions.

Yesterday’s instalments did little to counter this view.

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