Premier African Minerals has been very quiet when it comes to the grades of lithium at their Zulu project in Zimbabwe. Under the terms of the offtake agreement with their Chinese partner Canmax, Premier African Minerals is required to supply lithium with a grade close to 6%.

Throughout the Canmax saga, attention was focused entirely on contract negotiations and whether Premier African Minerals would be forced to repay the prepayment amount.

Canmax proved to be supportive of Premier African Minerals and was forthcoming with renegotiating their offtake agreement. The terms, however, leave Premier African Minerals little room for error.

The company must achieve 1,000-tonne production per month by the end of November or face penalties including cash payments – and even the transfer of an interest in the Zulu project to Canmax.

While the focus has been on the production figures, we are yet to hear anything material on the grade of the offtake since operations recommenced at Zulu.

Earlier in 2023, Premier African Minerals said they were unable to produce the required lithium grades above 6% at Zulu without the use of reagents.

Premier must produce lithium with grades close to 6% under the terms of their offtake agreement. Failure to do so at the specified quantity will trigger penalties.

Grades can be released alongside shipment announcements and any upcoming announcement will be crucial for Premier African Minerals shares.

For example, Core Lithium announced its first lithium shipment from the Finnis project had a 5.6% grade shortly before the shipment was made in May this year. Core Lithium shares reacted positively in the immediate period.

Sayona Mining enjoyed a pop after announcing the production of 30,000 tonnes of saleable lithium concentrate at 5.5% before shipments commenced over the summer.

Premier African Minerals shares have been stuck in a tight range since the new agreement was inked with Canmax. The announcement of lithium grades will likely be a catalyst for PREM shares to break out of this range.

Expect a sharp decline in PREM shares if the Zulu grades are less than 5%. However, if this is the case, it is unlikely Premier African Minerals will reveal the exact grades.

Premier African Minerals shares are down 52% over the past six months.

On Friday, British American Tobacco (BAT) shares dropped more than 2 % in light of the US Food and Drug Administration (FDA) banning the sales of six Vuse Alto vape flavours in the U.S.

BATS shares are down 3.5% and are worth 2,448p at the time of writing.

On Thursday, the FDA stated that it has issued a ban on three menthol and three mixed-berry vape flavours in the U.S. These Vuse Alto products are being sold by BAT´s subsidiary, R.J. Raynolds.

Now, BAT is not allowed to market or sell these flavours within the U.S. According to the FDA statement issued on Thursday, these vapes did not meet the FDA Protection of the Public Health standards.

More specifically, the FDA stated that these six flavours should be banned as they do not seem to be helpful in either reducing the amount of cigarettes consumed by adults who already smoke or in making these adults switch from cigarettes to vaping.

Vuse Alto is the main vaping product sold by BAT in the US. The newly banned menthol flavour alone accounts for up to 75% of all of BAT´s US sales, said Jefferies analyst Owen Bennett in a comment to Reuters.

“Vaping and e-cigarettes—so-called ‘next-generation products’—were  the industry and British American Tobacco’s answer to increasingly tight restrictions on the sale of cigarettes,” said Russ Mould, AJ Bell Investment Director, in a comment for UK Investor Magazine.

“If regulators start clamping down hard in these new areas too, it will raise questions about the sustainability of the business in the decades to come,”, he continued.

The FTSE 100 fell on rates concern on Friday with housebuilders, banks and consumer discretionary stocks among the most heavily hit.

Another day and another shift in sentiment driven by interest rate expectations. On Friday, the concerns were centred on UK interest rates and comments from the Bank of England’s chief economist.

“The higher-for-longer interest rate narrative just became louder. The Bank of England’s chief economist, Huw Pill, has said the bank won’t be quick to cut rates – even if a moderation of inflation occurs,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“Simply put, inflation needs to be closer to the 2% target before anyone can get their hopes up that the cost of living and borrowing is about to sweep down to more palatable levels.”

Housebuilders Taylor Wimpey and Barratt Developments struggled with the prospect of higher mortgage rates for an extended period as the two fell more than 1%.

UK banks were also weaker as investors weighed how higher borrowing costs would impact the ability of their customers to repay debt.

Consumer discretionary constituents Kingfisher and JD Sports were down 2.1% and 2.7% respectively.

St James’s Place was the biggest faller following media reports the wealth manager was facing increased scrutiny from the regulator regarding charges.