Zulu Lithium Additional Funding

Premier African Minerals Limited

30 August 2023

 

30 August 2023 

Premier African Minerals Limited

Zulu Lithium Additional Funding

Premier African Minerals Limited ("Premier" or the "Company"), is pleased to announce a conditional subscription for new ordinary shares by Canmax Technologies Co., Ltd ("Canmax") to raise £5 million before expenses at an issue price of 0.35 pence per new ordinary share for the ongoing Zulu Lithium and Tantalum Project ("Zulu") Pilot Optimisation where the Company is targeting revenue generating production by November 2023 ("Subscription").

Highlights:

Ø	The Subscription, together with the Placing funds (as announced on 25 August 2023) funds remaining expected operational expenditure and any shortfall in remedial expenses not met by the plant supplier for first revenue forecast for November 2023.
Ø	Subscription further not only confirms the commitment of Canmax, Premier largest shareholder, to the ultimate successful of Zulu, but is intended to facilitate increases in production capability.

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."

Subscription Agreement

On 28 August 2023, Premier and Canmax entered into a conditional subscription agreement ("Subscription Agreement") under which Canmax has conditionally agreed to subscribe £5 million before expenses for 1,428,571,428 new ordinary shares ("Subscription Shares") at an issue price of 0.35 pence within 15 business days following the entering into of the Subscription Agreement. On completion of the Subscription Canmax will be interested in 17.4 per cent in the enlarged issued share capital of Premier.

Conditions Precedent

Completion of the Subscription is conditional on the following:

i.      Within 15 Business Days of the date of the Subscription, written confirmation that Canmax has received all applicable outbound direct investment approvals and/or registrations from and/or with competent Chinese administrative authorities with respect to the Subscription; and

ii.     Each of the standard warranties for a transaction of this type as set out in the Subscription agreement being true and accurate as at the payment date.

The Placing has been arranged within the Company's existing share authorities. Premier intends to use the proceeds of the Subscription principally to provide funding to support the ongoing optimisation of the plant at Zulu and general working capital. In particular, Premier anticipates using the proceeds of the Subscription, together with the proceeds of the Placing announced on 25 August 2023, to meet the costs associated both with the interim mill installation that is expected to see production at 1,000 ton per month of spodumene from November 2023, the installation of a thickener and larger ball mill that is expected to see the plant achieve design throughput from Q1 2024.

Admission

The Subscription has been arranged within the Company's existing share authorities and the Subscription Shares will, when issued, rank pari passu in all respects with the existing ordinary shares. Application will be made for the Subscription Shares be admitted to trading on AIM and admission is expected to take place on or around 19 September 2022.

Related Party

Canmax is currently interested in more than 10 per cent. of the issued ordinary share capital of the Company, and the Subscription is a related party transaction for the purposes of Rule 13 of the AIM Rules. As previously announced, Dr Luo Wei was nominated by Canmax as a director of the Company and he is not independent for the purposes of the AIM Rules and the Subscription has therefore been considered by the Independent Directors (being the Board other than Dr Luo Wei). The Independent Directors of the Company consider, having consulted with the Company's nominated adviser, Beaumont Cornish, that the terms of the Subscription are fair and reasonable insofar as Shareholders are concerned. 

The Independent Directors have in particular taken into account that the Subscription is at the same issue price as the Placing announced on 25 August 2023, and provides additional funding to ensure that all anticipated cost associated with Zulu reaching commercial production in November are achievable. In addition, the Subscription provides additional contingency funding to cover any cash payment due in November in the event of any unforeseen delay of delivery of Spodumene in accordance with the amended agreement with Canmax as announced on 15 August 2023.

The Board also notes that Canmax, which is expected to maintain its interest in the Company, is listed on the Shenzhen Stock Exchange under the ticker 300390 with a market capitalisation of ¥22.9 Billion (£2.1billion) and has a track record of providing substantial shareholder support.

Market Abuse Regulation

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018.

The person who arranged the release of this announcement on behalf of the Company was George Roach.

A copy of this announcement is available at the Company's website, www.premierafricanminerals.com.

Enquiries

George Roach	Premier African Minerals Limited	Tel: [phone]
Michael Cornish / Roland Cornish	Beaumont Cornish Limited (Nominated Adviser)	Tel: [phone]
Douglas Crippen	CMC Markets UK Plc	Tel: [phone]
Toby Gibbs/Rachel Goldstein	Shore Capital Stockbrokers Limited	Tel: [phone]
Jerry Keen	Fox-Davies Capital Limited	Tel: [phone]

Beaumont Cornish Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as nominated adviser to the Company in relation to the matters referred herein. Beaumont Cornish Limited is acting exclusively for the Company and for no one else in relation to the matters described in this announcement and is not advising any other person and accordingly will not be responsible to anyone other than the Company for providing the protections afforded to clients of Beaumont Cornish Limited, or for providing advice in relation to the contents of this announcement or any matter referred to in it.

Forward Looking Statements

Certain statements in this announcement are or may be deemed to be forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'' ''could'' "should" ''envisage'' ''estimate'' ''intend'' ''may'' ''plan'' ''will'' or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth results of operations performance future capital and other expenditures (including the amount. Nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward looking statements.

Notes to Editors

Premier African Minerals Limited (AIM: PREM) is a multi-commodity mining and natural resource development company focused on Southern Africa with its RHA Tungsten and Zulu Lithium projects in Zimbabwe.

The Company has a diverse portfolio of projects, which include tungsten, rare earth elements, lithium and tantalum in Zimbabwe and lithium and gold in Mozambique, encompassing brownfield projects with near-term production potential to grass-roots exploration. The Company has accepted a share offer by Vortex Limited ("Vortex") for the exchange of Premier's entire 4.8 per cent interest in Circum Minerals Limited ("Circum"), the owners of the Danakil Potash Project in Ethiopia, for a 13.1 per cent interest in the enlarged share capital of Vortex. Vortex has an interest of 36.7 per cent in Circum.

In addition, the Company holds a 19 per cent interest in MN Holdings Limited, the operator of the Otjozondu Manganese Mining Project in Namibia.

Ends

 

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