Aim-listed Premier African Minerals intends to raise £2.48-million before expenses through a subscription to advance its Zulu lithium and tantalum project.
“This placement assures Zulu of plant startup, subject only to suppliers meeting their obligations and undertakings. This has and remains Premier's single most important objective at this stage. That is targeted for next week and remains on target at this time.
“Early indications are that subsequent working capital finance will be available from commercial lenders at Zulu when production is under way as Zulu must begin to fund its operations without the assistance of Premier once commercial production has commenced,” says CEO George Roach.
Funds now raised will be used specifically for direct operating expenses at Zulu, including final payments related to the thickener purchase and installation; final payments related to the ball mill and associated hydrosizers, transport and installation thereof; plant operating spares and reagents; mining costs; and day-to-day operating expenses including diesel.
As announced last month, Premier elected to make a significant expansion in the mining operations to facilitate delivery of ore with less waste to mitigate any residual issues with the sorters (which continue to be optimised) when plant production restarts at Zulu.
While the mill has now been delivered and installed at Zulu, there was a delay with the delivery which further constrained Premier’s cash resources.
Premier says it continues to engage with Zimbabwe-based lenders for working capital facilities at Zulu – these potential lenders need to see production from Zulu, and while Premier strongly believes that Zulu will be able to source a working capital facility, this is now largely dependent on Zulu being in production.
Based on the above, Premier says it believes that securing funding through the above subscription is the best immediate solution to securing further project funding to see Zulu start production in late February.
Once production has begun, Premier posits it should see one or more of the alternatives to equity-based funding materialise.
On this basis, Premier’s current expectation is that it is now fully funded to first production at Zulu.