Chinese pour US$35 million for Zim’s Zulu lithium pilot plant
SHENZHEN Stock Exchange-listed Suzhou TA&A Ultra Clean Technology company, which bought shares worth about US$15,7 million from Premier African Minerals, has agreed to provide a pre-funding amount of US$34,6 million for the construction of a large-scale pilot plant at the Zulu project.
In a note to shareholders on Saturday, Premier, which is developing one of Zimbabwe’s most promising lithium operations, said it had entered into a marketing and prepayment agreement in the form of a binding heads of terms with the Chinese firm.
“The net effect of the agreement is the immediate commencement of construction activities at the Zulu project intended to see first shipments before March 31, 2023 and a steady build up in production,” said Premier chief executive officer George Roach.
“It is important to note that this is a pilot plant facility. Three by-product streams will be stock-piled and will go to inventory, pending completion of additional test-work and additional plant. That this may be immediately saleable remains a possibility,” he said.
The prepayment is expected to fully fund the construction phase and is interest free provided first shipment occurs by March 31, 2023.
US$3,5 million was paid immediately to Premier upon signing the agreement.
The remaining balance would be paid in one lump sum following completion of transaction documents.
Premier and Suzhou TA&A have agreed to complete transaction documents within one month of the agreement.
Should the deal fail, Premier would be required to immediately refund the US$3,5 million to Suzhou TA&A.
Zulu Lithium Private Limited and Zulu Lithium Mauritius Limited will provide Suzhou TA&A with security over all existing assets including all the mining claims, and all other assets, company shares and inventory.
To the extent that above security fails to cover any outstanding amounts under the prepayment amount, Premier has agreed to cover this shortfall by way of a cross company guarantee.
Premier said the pilot plant to be commissioned will utilise state of the art sensor-based ore sorting technologies that will facilitate the separation of run of mine material into components and in so doing, likely increase available capacity in the flotation recovery circuits, where lithium minerals are recovered.
Under the agreement, Suzhou TA&A will have the right to acquire the first three years of production, or until such time as the prepayment amount has been repaid in full.
The statement said sales would be priced at a discount conditional on the approval of the Minerals Marketing Corporation of Zimbabwe on the first 50 000 tonne shipped or until the prepayment amount has been fully liquidated.
Following completion of first delivery, the parties will agree to negotiate a discount based upon market conditions for the remaining term.
The purchase price will be subject to a floor price until such time as either the pre-payment amount has been fully repaid or December 31, 2023.-newsday
