Chinese company evaluates lithium claims in Zimbabwe

A Chinese mining company is assessing Premier African Minerals’ lithium claims in the eastern part of the country with the aim of preparing a formal offer for acquisition.

The claims are situated in the eastern region of the country. Premier African Minerals maintains a 50 percent ownership stake in the Mutare Lithium Project, while Li3 Lithium holds the remaining 50 percent.

The lithium firm which has mining operations at Fort Rixon lithium mine in Matabeleland South Province revealed its intention to explore alternative options for unlocking the value and potential of the Turwi Gold Project.

The acquisition of the Turwi Gold Project involved an earn-in of US$250,000 for operational control and a 50 percent interest in the gold exploration project in Southeast Zimbabwe.

The potential acquisition of Premier African Minerals’ lithium claims by a Chinese mining firm has generated significant interest within the industry.

The partnership between Premier African Minerals and Li3 Lithium in the Mutare Lithium Project represents a strategic alliance focused on maximising the project’s potential.

The company’s commitment to pursuing various opportunities, including the Turwi Gold Project, underscores its dedication to realising value and capitalizing on growth prospects in the mineral-rich landscape of the region.

In its Annual Report for the year ended 31 December 2023, Chief Executive Officer, Mr George Roach said an unnamed major Chinese firm is evaluating the claims.

“We have previously referred to our claims in the eastern part of Zimbabwe and we are pleased to advise that these claims are presently under evaluation by a major Chinese miner who have indicated their intention to formulate a formal offer to acquire these properties,” said Mr Roach under the strategic report.

On the gold mine, he said: “Premier had acquired operational control and 50 percent of this gold exploration project in Southeast Zimbabwe. However, at this time, the focus of Premier will be that of Zulu. Premier will explore other alternative opportunities to releasing the potential value and opportunity of the Turwi Gold Project.”

Mr Roach said during the current year, the primary focus will be to optimise and stabilise profitable operations at Zulu progress resource development within the Zulu EPO and secure a Mining lease over prospective areas, expand production at Zulu and identify and secure high value exploration targets in other jurisdictions.

Premier has engaged Zimbabwean banks to facilitate the funding of Zulu’s short-term needs as they may arise.

“The Board also believes that it has a valuable asset in Zulu, with an estimated fair value in accordance with the prepayment and offtake agreement is US$200 million. And, in the event that it elected to stop all group funding of Zulu, the group has sufficient share authorities to sustain its reduced holding costs for the period to 31 December 2025.

“After careful consideration of those matters set out above, the Directors are of the opinion that the Group will be able to obtain adequate resources to enable it to undertake its planned activities for the period to 31 December 2025 either from production or from additional fund raising and have prepared these consolidated financial statements on the going concern basis.”

If Premier is not able to meet the above consideration, Mr Roach said a material uncertainty exists which may cast significant doubt on the ability of the Group to continue as a going concern and therefore be unable to realise its assets and settle its liabilities in the normal course of business.

During the period under review, the mining entity issued 4,216,446,124 shares at an average price of 0,4455p per share raising a total of US$18,786 million. The money was used to continue with the commission and development work at Zulu mine.

Mr Roach noted that the firm has obtained support from its offtake and prepayment partner allowing Premier to pursue alternative funding avenues.

Meanwhile, the Group reported a loss before and after tax of US$20.813 million for the year ended 31 December 2023 (2022: loss US$5,803 million).

The loss before and after tax includes gross trading loss before depreciation and amortisation is US$3,805 million.

Administration expenses amounting to US$10.645 million from US$4,622 million in 2022 and finance costs reached US$5,818 million.

The total comprehensive loss for the year amounted to US$21,312 million.

During the 2023 financial year, net funds of US$17,542 million were raised through direct subscriptions from the issue of new ordinary shares.

Lithium is a base metal used in the production of batteries and its demand in recent years rose sharply owing to the global demand in electric vehicles, particularly in developed countries that are leading in phasing out fossil fuels such as petrol and diesel in the coming years.

Generally, the Zulu project is regarded as potentially the largest undeveloped lithium bearing pegmatite in Zimbabwe, covering a surface of about 3,5 kilometres that are prospectively of lithium and tantalum mineralisation.chronicle