Premier minerals explores corporate rescue options. . . Zulu Lithium project faces financial challenges

PREMIER Africa Minerals Limited is considering corporate rescue and asset liquidation options for its Zulu lithium project among various strategic approaches, as the group’s current liabilities surpass current assets by $47,815 million.

The Zulu plant has been inactive since July 2024.
As of 28 February 2025, unaudited total group liabilities, including $46,353 million owed to Canmax Technologies Co. Ltd under the Offtake and Prepayment Agreement, with unsettled interest of $11,7 million, amounted to $64,327 million.

Of this, group trade creditors, including unpaid salaries, accounted for approximately $17 million.
The company requires immediate funding to maintain essential operations at both Premier and Zulu. Principal trade creditors have remained supportive, pending the completion of remedial work on the flotation plant and reassurances from Premier that Zulu’s operations will be recommissioned promptly to enable full settlement.

Premier operates the Zulu lithium plant in Fort Rixon, Matabeleland South Province. Last year, the company considered selling the plant or bringing in an investment partner through a partial sale or joint venture.

However, a corporate update released yesterday indicated a shift in strategy, with Premier now actively pursuing funding solutions for the Zulu project, including the possibility of a corporate rescue.

Premier Africa Minerals (PAM) chief executive officer, Mr George Roach (second from left) chats with Mr Zhenhua Pie (right) during a tour of the high impact lithium project site in Fort Rixon Matabeleland South Province yesterday. Looking on are Premier Africa Minerals General Manager Mr Jabulani Chirashe (left) and Zhou Xiaole.

Corporate rescue, also known as business rescue or restructuring, is a legal framework in Zimbabwe designed to help financially distressed companies restore solvency and continue operations.

The process aims to balance the interests of creditors, shareholders, employees, and other stakeholders while preserving the company’s economic value.

Premier is engaging with all stakeholders, particularly Zulu’s prepayment and offtake partner, with whom detailed discussions are ongoing.

“While this remains our preferred solution, Premier is also engaged with other new potential investors. In the absence of a financing solution, Premier may need to consider alternative options for Zulu in the interests of its creditors and shareholders, which may include raising financing at the subsidiary level, a sale of Zulu whilst keeping it in a state of care and maintenance, the liquidation of the assets of Zulu, or other options available under Zimbabwean laws including a corporate rescue of Zulu,” said the firm.

Chief Executive Officer, Mr George Roach, expressed confidence in the plant’s future performance. Based on extensive test work and design reviews conducted in the third quarter of 2024, including the purchase of a secondary spodumene float plant,

Mr Roach believes that once operations resume, the plant will achieve improved recoveries and concentrate grade. Spodumene, a lithium ore with a high lithium concentration, is critical for battery production in electric vehicles.

Lithium

“In my opinion, to have attended to the issues associated with the comminution circuit and be able to supply the required tonnage to the float sections, we have dealt with the major and potentially most costly components of the plant and to not complete the final commissioning and optimisation of the float section now would not make any sense,” said Mr Roach.

“It should be noted that we are in discussions with interested parties regarding our Mutare Li3 claims and RHA Tungsten with a view to a possible restart of this mine.”

The update followed a previous announcement on 21 January 2025, when Premier disclosed that a proposed £3,5 million fundraising had not closed. The funds were intended to support the final commissioning and optimisation of the Primary Spodumene Flotation Plant and the purchase of the Secondary Spodumene Flotation Plant.

Premier is of the view that these steps are crucial for the full recommencement of operations at Zulu and to address trade creditors requiring immediate settlement to facilitate an initial 3-to-5-day test run.

Mr George Roach

Premier, a UK-based mining and exploration company, has faced challenges with commissioning the lithium flotation circuit at its Zulu plant. It has missed several delivery deadlines and, at one point, issued a force majeure notice to China’s Canmax Technologies, citing unforeseen operational hurdles encountered at the lithium plant in Fort Rixon.

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

The plant was reported to be unable to produce sufficient spodumene to meet the quantities required by the off-take agreement with Canmax. The latter had wanted to terminate the agreement, a development that could have negatively affected the Zulu Lithium project.

However, after extensive discussions, the companies managed to restore their partnership.-chroncile