Aim-listed Premier African Minerals and Canmax Technologies have reached an agreement to amend and restate the offtake and prepayment agreement they entered into in August 2022.
The amended agreement restores the working arrangements between Premier and Canmax and therefore the force majeure and default notices have been withdrawn by the respective parties.
As previously announced on August 3, Canmax bought, in advance, $34.6-million worth of product to be sold by Premier, with the proceeds used to build and commission the plant at the Zulu lithium and tantalum project, in Zimbabwe.
Under the terms of the amended agreement, the parties have agreed a new schedule for the supply of product for the advance purchase amount plus accrued interest by Canmax.
The essential elements of the amended agreement remain the same as the original agreement entered into in August 2022, save that the parties have agreed to a revised product supply schedule (and alternative arrangements) in respect of the prepayment of $34.6-million plus accrued interest.
Moreover, the parties have agreed to a revised hybrid pricing agreement with the payment for Spodumene (SC6) supplied by Premier based on the SC6 price and a profit share whereby Premier and Canmax will share in the profit from production by Canmax of lithium hydroxide from SC6 supplied by Premier.
The independent directors are said to have considered that the amended agreement provides an agreed timetable and process for the supply of product pre-purchased under the amended agreement with alternative arrangements in the event of a delay in delivery, resolves the dispute between Canmax and Premier, and provides a basis for the parties to work together to resolve the plant issues at Zulu and achieve all parties' production objectives.
Operations at Zulu have been temporarily suspended to allow for the installation and commissioning of the mill from RHA Tungsten.
This is expected to be completed during early autumn and within sufficient time to meet the revised product delivery schedule which has been agreed at an initial rate of 1 000 t of product shipped to Canmax by the end of November.
Plant optimisation is ongoing and, largely as a result of the delays in resolving the plant issues, Premier needs immediate funding.
In addition, while the plant fixes are the acknowledged responsibility of Stark, who is the design, procurement, installation, and commissioning contractor, Premier will need to ensure that adequate funds are available to avoid any further delays, it says.
As announced earlier on August 15, the company has also now elected to draw down on the entire £2-million amended facility entered into with George Roach immediately following this announcement.