PREMIER African Minerals Limited (Premier) managing director Graham Hill says the key to unlocking Zulu’s full production capacity lies in ongoing discussions over a revised offtake agreement and the securing of a complementary funding package.
The offtake agreement is a contract under which Premier commits to deliver a set volume of spodumene concentrate from its Zulu lithium project to Canmax Technologies Co Ltd (Canmax) in advance, with Canmax providing prepayment financing to support the project.
However, after Premier fell behind on performance, the company began negotiating a revised offtake and funding arrangement to unlock the plant’s full capacity, restructure debt and ensure adequate cash flow for operations.
The original offtake and prepayment agreement between Premier and Canmax was first signed in 2023.
Premier is a British-based miner.
“The key to unlocking Zulu’s full production capacity lies in the current discussions on a revised offtake agreement and securing the complementary funding package,” Hill said in a letter to shareholders.
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“Our constructive engagement with the major trading house referenced in previous announcements is ongoing with the shared desire to see this through to final agreement both with Premier and particularly with Canmax.
“Further site visits to Zulu are expected in the coming weeks, and we look forward to updating shareholders. Simultaneously, the multi-option approach discussed in the 2024 annual financial statements continues to be advanced as part of the company strategy for Zulu.
“Active negotiations around our other projects underline our belief that we hold not only a flagship operation in Zulu but also a portfolio with meaningful value to unlock.”
He said, in summary, Zulu had the resource, the infrastructure and the market access needed for long-term success.
“Optimisation is progressing, commercial discussions are advancing, and the board and I believe that Premier is taking the necessary steps to restore value for shareholders,” Hill said.
“The period has been extensively reported within post-financial-year-end events in our annual financial statements that were released just a few months ago.”
The group incurred an operating loss of US$7,68 million for the six months ended June 30, 2025.
The loss was principally due to the ongoing overhead and administration costs associated with the construction, installation and optimisation of the Zulu lithium mine in Zimbabwe.
Consequently, cash at hand as of June was US$0,029 million.
Premier received continued financial support from its shareholders throughout the period.
“At the reporting date of June 30, 2025, the group’s total assets exceeded the total liabilities by US$5,881 million and its current liabilities exceeded its current assets by US$54,423 million. The major component of the current liability excess is the US$46,067 million received from the group’s offtake partner as an advance receipt,” Premier said.
“This advance receipt will be settled from proceeds from the sale of SC6 (spodumene concentrate) to the offtake partner from production at Zulu Lithium and Tantalum Project (Zulu) or alternatively through the issue of shares into Zulu based on market valuation of US$100 million if not repaid by December 31, 2025.”
Premier’s board continues to believe that it has a valuable asset in Zulu, with an estimated fair value in accordance with the prepayment and offtake agreement is US$100 million.
“In the event that none of the investments conclude or Premier doesn’t receive the required support from it next general meeting of shareholders and if the company is unable to obtain additional finance for the group’s working capital and capital expenditure requirements, a material uncertainty may exist which could 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,” the firm added.
Premier’s Zulu Lithium and Tantalum Project, situated about 80 kilometres from Bulawayo, is considered one of Zimbabwe’s largest undeveloped lithium-bearing pegmatite deposits.
The project covers 14 mineral claims spanning roughly 3,5 square kilometres, with strong prospects for both lithium and tantalum mineralisation.