Premier African Minerals has made another critical step forward in developing their Zulu lithium project by securing an additional £5m in funding from their offtake partner, Canmax.
After renegotiating the terms of their offtake agreement, the latest round of investment signifies Canmax’s commitment to both Premier African Minerals and the Zulu project.
George Roach, CEO commented:
“Our interests are aligned, our intentions are clear. Zulu must produce now, and we must look to expand the capacity. We deeply appreciate this Subscription, that is as positive a statement of support and alignment as we could ever have asked for.”
Canmax made their commitment to Premier African Minerals by way of a £5m placing at 0.35p. Canmax now has a 17.4% stake in Premier African Minerals.
The placing has been taken well by the market, with Premier African Minerals shares trading down just 2% to 0.45p at the time of writing.
Such is the dilutive nature of placings; one could have expected shares to tank on the news. However, the market reaction today suggests the placing was already priced in and investors are confident in the longer-term prospects for the company.
Zulu progress
Premier plans to use the proceeds from its recent share subscription primarily to fund optimizations at its Zulu lithium processing plant and for working capital.
Specifically, the company expects to allocate the funds, along with proceeds from the share placing announced on August 25, to cover costs related to an interim mill installation scheduled to begin 1,000-ton-per-month spodumene production in November 2023.
Additionally, Premier anticipates using the capital to install a thickener and larger ball mill, upgrades projected to enable the Zulu plant to achieve full design capacity starting in Q1 2024.