Premier African Minerals shares were trading water at the time of writing on Tuesday as investors attempted to make sense of an announcement released yesterday that raised questions about the company’s Zulu lithium project.
The lithium miner announced a brief and bizarre update on their Zulu project yesterday, which cast doubt over whether the company would meet production targets in February. Given the plant is not yet fully operational, it seems unlikely targets will be met.
The Premier African Minerals saga has unfolded over many months and the end of February lithium production target has been eagerly anticipated.
“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,” said George Roach, CEO.
“Premier expects the plant to operate continuously, as previously announced, before the end of February 2024.”
Premier African Minerals shares were down 2.5% at the time of writing but had been positive earlier in the session.
Under the terms of an offtake agreement with partners Canmax, Premier is required to produce 1,000t of 6% lithium offtake per month.
This target is yet to be met and the agreement stipulates penalty payments to Canmax, and even the issue of equity in the Zulu project, should Premier not meet the targets.
Canmax has so far been supportive. Whether they continue to be so remains to be seen.
Premier said they will release another update before the end of February which could be explosive.