PREMIER African Resources has prepared approximately US$13,4 million six-month interim budget covering February to July 2026 to fund critical operations at its Zulu Lithium project near Bulawayo.
This comes as the company is in a highly precarious financial position, characterised by significant debt, operational pauses and a reliance on shareholder, creditor and partner support to continue as a going concern.
Premier is addressing this through extensive, ongoing equity fundraising, debt restructuring and technical, operational changes to the processing plant.
The London-listed firm contracted its most significant debt, about US$46 million, to Canmax Technologies (Canmax) primarily following a prepayment agreement in 2023 designed to fund the construction and commissioning of the Zulu Lithium and Tantalum project in Zimbabwe.
Premier failed to meet its production targets, specifically failing to deliver a minimum of 1 000 tonnes of lithium spodumene per month in November and December 2023. This constituted a breach of the offtake agreement.
Following the default, Canmax invoked rights that increased the interest rate on the outstanding balance to 12 percent per annum.
To manage this debt, the companies amended the agreement, allowing Canmax to receive 25 percent to 50 percent of gross sale proceeds from lithium shipments.
The parties also agreed to convert accrued interest into equity (shares) in Premier, which has resulted in Canmax becoming a major shareholder (approximately 13,38 percent stake.
The Zulu lithium and tantalum project aligns with Zimbabwe’s efforts to become a major player in the global electric vehicle battery supply chain.
Zimbabwe’s lithium exports are highly significant, positioning the country as Africa’s top producer and a top-10 global supplier, with major investments from China boosting output.
Mining is the largest foreign currency earner for the southern African nation and accounts for 12-15 percent of gross domestic product.
Premier’s near-term funding requirements are focused on plant completion, commissioning and optimisation (US$0,8 million), operational suppliers and critical services (US$4,4 million), staff costs and statutory obligations (US$3,3 million), and legacy and long-standing payables of approximately US$4,9 million.
“These categories represent an aggregate near-term funding requirement of approximately US$13,4 million, based on current estimates and subject to refinement as commissioning progresses and operational conditions evolve.
“The proposed application of funds includes provision for a test-run period. The budget does not assume that there will be any operating revenues during the commissioning and optimisation phase and certain supplier payment arrangements do not require immediate settlement of all outstanding amounts,” the firm said in a statement to shareholders.
Premier is developing the Zulu Lithium project, potentially the largest undeveloped lithium-bearing pegmatite (igneous) in Zimbabwe, at a time when the country is positioning itself as a key global lithium supplier driven by demand for electric vehicles and renewable energy storage solutions.
Premier will seek shareholder approval at a forthcoming annual general meeting to issue up to thirty-five billion ordinary shares and to authorise the directors of the company to issue, or grant any right to subscribe for or convert any security into, shares in accordance with the provisions of this resolution.
Conditional on the approval of the first resolution, Premier will also seek approval to issue or grant the right to subscribe for or convert any security into a further five billion ordinary shares and to authorise the directors to issue such number of shares in favour of Canmax in accordance with their conversion rights as notified on December 24, 2024.
On January 5, 2026, Premier and Canmax Technologies Co, entered into a further amendment to the restated Offtake and Prepayment Agreement in respect of the Zulu Lithium and Tantalum Project, pursuant to which the Long Stop Date was conditionally extended to the earlier of (i) June 30, 2026 or (ii) the date on which a reputable buyer, acceptable to Canmax, executes a binding agreement for the purchase of spodumene concentrate and the settlement and/or management of Canmax’s prepayment amount together with accrued interest, on terms to be agreed with Canmax.
The addendum to the offtake and prepayment agreement allowed Canmax the right to participate in Premier fund raisings to enable them to maintain their original investment percentage in the Company of 13,38 percent.
To this extent, Canmax, at its absolute discretion, will have the right to receive partial repayment of interest owed by the issuance of new ordinary shares from this resolution in the company, such that Canmax would hold 13,38 percent of the shares in issue of the Company on a fully diluted basis immediately following a funding.
Premier said it has limited funds and must put in place additional funding arrangements to meet its payment commitments and obligations as they fall due.
“Shareholders should be aware that if Resolutions 2 and 3 are not passed at the AGM, the company would need to pursue alternative funding arrangements, which may include a discounted open offer to Shareholders.”
The board said the share authorities being sought at the upcoming AGM would be used carefully and only where necessary in line with the company’s operational strategy, with alternative, less dilutive funding options to be considered.
“To the extent that such alternative funding can be secured on acceptable terms and within required timeframes, the board intends to prioritise those funding sources in preference to issuing new ordinary shares,” the company said.
Premier said its current operational strategy is centred on the installation, commissioning and optimisation of a new spodumene flotation circuit utilising Xinhai Technology Processing equipment and process design, rather than relying on the existing primary flotation plant configuration.
It noted that Xinhai flotation technology is well established and proven in comparable operations within Zimbabwe, and the board believes its deployment at Zulu provides the company with a materially higher level of confidence in achieving the required concentrate grade and throughput necessary to progress towards concluding a binding offtake agreement.
“In order to deliver the operational milestones required to stabilise and optimise processing performance at Zulu, the company must demonstrate that Zulu is capable of producing saleable spodumene concentrate at the required grade and in commercial quantities.
“To this end, the company has concluded a procurement, installation and commissioning contract with Thriving Engineering Private Limited, a wholly owned subsidiary of Xinhai Technology Processing, for the provision of a spodumene flotation plant at Zulu.
“The contractual framework provides for delivery of flotation equipment by the end of February 2026, on-site engineering support for installation and commissioning, and a process performance guarantee linked to the achievement of targeted concentrate grades and recoveries at a design throughput of 15–20 tonnes per hour which is subject to feed material meeting agreed specifications.”
Subject to logistics and site readiness, the company expects the upgraded flotation circuit to be installed, commissioned, optimised and producing spodumene concentrate during the second quarter of 2026.
Managing Director Mr Graham Hill said the focus at Zulu is firmly on improving the stability and consistency of overall processing performance.
“Whilst the concluding of this agreement with the contractor has taken a little longer than planned, the intervening period has provided opportunity for a combination of detailed technical discussions and the need to ensure that the appropriate contractual protections, including performance-related provisions, were properly aligned with our operational requirements and validation of funding.
“Importantly, the contractual framework now in place provides for commissioning to be undertaken against defined performance criteria, with elements of payment linked to the achievement of those outcomes.
“We believe that this structure appropriately aligns contractor incentives with delivery of the processing performance we require and represents a further step in the Company’s ongoing focus on stabilising and optimising processing performance at the Project.
“The agreement allows for completion of all works, commissioning and optimisation within the time frame of the Long Stop Date as announced on the 5th January 2026,” he said.
Premier African Minerals Limited 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.-herald
