Premier African Minerals shares crash amid constrained cash warning and lithium offtake dispute

Premier African Minerals shares sank in early trade on Thursday after announcing its cash position was becoming ‘constrained’ amid an ongoing dispute with their lithium offtake partner.

The Premier African Minerals share price was down around 30% in very early trade on Thursday before rebounding.

Premier African Minerals received a termination notice from their Chinese offtake partner Canmax Technologies in June after failing to meet production targets at the Zulu Lithium project. Premier African Minerals claims Force Majeure due to the fault of production failings lying with their mine construction contractor.

Canmax wrote to Premier African Minerals on the 17th July, formalising a dispute noting both parties are required to engage in “friendly negotiation”. Should an agreement not be reached within 10 days, the matter will be taken to arbitration in Singapore.

Canmax made a $34.6m prepayment for lithium offtake to Premier African Minerals, which is required to be returned after Premier African Minerals missed production deadlines. Premier is claiming a state of Force Majeure which they feel suspends the requirement to return the prepayment.

Work is continuing at Zulu with the installation of UV sorters, a new frame for the EDS mill and the Hydro Sizer. The works are expected to increase production efficiency at the project.

Although production has been delayed, Premier African Minerals said initial production projections are still achievable.

In light of the request to return the repayment amount, Premier African Minerals are pursuing an alternative funding agreement but offers no guarantee alternative funding will be achieved. The company said cash reserves are constrained.

Premier African Minerals CEO, George Roach, did not provide a personal comment alongside today’s announcement.

Premier African Minerals shares were down 16% to 0.42p at 8.42am.

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