Premier, Canmax deal back on track

MINING and natural resource development company, Premier African Minerals and Chinese investor —Technologies Co Limited deal that was on the verge of collapse is back on track as new terms have been agreed on.
Canmax is a producer of lithium electric materials and other related products.

It has a 13,38 percent stake in Zimbabwe-focused explorer Premier African, which also said it will draw down on the entire £2 million amended loan facility provided by executive chairman Mr George Roach.

The mining resource firm held a special General Meeting on 12 August and shareholders passed a key resolution.

“The Company has also agreed the terms of an amended Offtake and Prepayment Agreement with Canmax Technologies Co Ltd and a further announcement will be made shortly.

“As Canmax is interested in 13,38 percent of the issued share capital of the Company, the amendment to the Offtake and Prepayment Agreement is a related party transaction for the purposes of Rule 13 of the AIM Rules and will be dealt with accordingly,” reads part of the update.

Premier African Minerals

Additionally, the mining house said it now draws down on the entire £2 million Amended Facility entered into with Mr Roach immediately on announcement of the full terms of the amended Offtake and Prepayment Agreement with Canmax.

Recently, Premier African Minerals entered into an unsecured £1,7 million loan facility agreement to fund some operations with the firm saying it is “exploring potential options to secure interim short-term funding from certain members of the board.”

However, Mr Roach later extended his loan facility to the mining entity to £2 million and waived any interest on a repayment by Premier.

The loan will bankroll unfunded general working capital purposes including ongoing operational expenses at Zulu Lithium and Tantalum Project in Fort Rixon.

Premier Africa Minerals and Canmax have been in recent weeks engaged in talks over a contractual disagreement that was threatening the implementation of the Fort Rixon lithium project.

Last year, Canmax provided US$35 million in pre-funding to enable the construction and commissioning of a large-scale pilot plant.

Its chairman Mr Pei Zenzhue visited the site last year.

After missing production timelines in June, Premier Africa Minerals issued a force majeure notice to China’s Canmax Technologies citing unforeseen operational hurdles encountered at its Zulu Lithium plant. This meant that it could not supply spodumene concentrate to Canmax as per the set timelines stipulated in the offtake agreement.

Force majeure is a clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance is beyond the control of the parties.

The plant was said not to be able to produce sufficient spodumene to meet the quantities of the off-take agreement with Canmax.

Canmax wanted to terminate the agreement, a development that could have negatively affected the Zulu Lithium project.
In one of the off-take and Prepayment Agreement updates, Mr Roach said challenges faced are “beyond the control of Premier” and could not have been foreseen by the investor.

He disputed the appropriateness of the notice of termination based on legal advice.

Subsequently, Premier Africa indicated that it received further written notice from Canmax on 17 July 2023 stating that there is a dispute under the Agreement and notes that both parties are now required to seek to resolve the dispute in good faith by “friendly negotiation”.

Spodumene is a battery-grade product, which is key for the future of electric cars.

Premier African Minerals

Due to the emerging electric motor vehicle industry, there is increased international demand for the lithium mineral known as “white oil”, which is used for manufacturing batteries.

Zimbabwe has the largest lithium reserves in Africa and the fifth-largest worldwide.

The Zulu project is generally regarded as potentially the largest undeveloped lithium bearing pegmatite in Zimbabwe, covering a surface of about 3,5 square kilometres, which are prospectively for lithium and tantalum mineralisation.

It produces a rare high value spodumene, a rock that has very high mineralisation of lithium. Spodumene is a battery grade product, which is key for the future of electric cars.-chronicle