Online Reporter
Nqobile Bhebhe,Zimpapers Business Hub
PREMIER African Minerals Limited has urged shareholders to approve two critical resolutions at the forthcoming General Meeting, warning that failure to do so could jeopardise the company’s ability to continue operating as a going concern.
The General Meeting, scheduled for 30 October will deliberate on resolutions deemed vital to ensuring the company’s financial stability and operational continuity.
Premier operates the Zulu lithium plant in Fort Rixon, Matabeleland South Province.
In a notice to shareholders, managing director Mr Graham Hill stressed that the proposed special resolutions are essential for the company to raise capital and meet its financial obligations.
“Premier has limited funds and must secure additional financing arrangements to meet its payment commitments and obligations as they fall due,” said Mr Hill.
He cautioned that rejection of the special resolutions could have severe consequences for the company’s viability.
“If the special resolutions are not approved, a material uncertainty would arise which could cast significant doubt on the Group’s ability to continue as a going concern and, consequently, on its ability to realise assets and settle liabilities in the normal course of business,” he said.
The first proposed resolution seeks approval for the disapplication of pre-emption rights under the company’s articles of association for a 24-month period, allowing the board to issue or grant rights to subscribe for up to five billion ordinary shares.
The second resolution, which is conditional upon the first, proposes an additional one billion shares to be issued within 12 months, specifically to enable conversion rights in favour of Canmax, as previously notified on 24 December, 2024.
Mr Hill said the board “strongly encourages all members to vote on all the proposed resolutions,” noting that both measures are vital to maintaining financial flexibility.
“The Board considers the approval of the Resolutions being proposed at this GM to be in the best interests of the Company and its Shareholders as a whole and, accordingly, unanimously recommends that Shareholders vote in favour of the Resolutions,” he said.
The company also warned that if the resolutions are not passed, it might be forced to pursue alternative funding routes such as a discounted open offer to shareholders, which carries significant uncertainty.
“There can be no assurance that such an open offer would be fully taken up or that other funding arrangements could be secured within the required timeframe and on acceptable terms,” Premier said.
Failure to secure the required funding, the company added, could “have a material adverse effect on both Zulu Lithium and the financial position of the Company as a whole.”
Reiterating the urgency, Mr Hill stressed, “For these reasons, the Board considers it of the utmost importance that Shareholders vote in favour of the Resolutions.”
Premier, a UK-based mining and exploration company, has faced challenges with commissioning the lithium flotation circuit at its Zulu plant.
It has missed several delivery deadlines and, at one point, issued a force majeure notice to China’s Canmax Technologies, citing unforeseen operational hurdles encountered at the lithium plant in Fort Rixon.
Force majeure, a French term, is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties occurs.
The plant was reported to be unable to produce sufficient spodumene to meet the quantities required by the off-take agreement with Canmax.
Canmax wanted to terminate the agreement, a development that could have negatively affected the Zulu Lithium project.
However, after extensive discussions, the companies managed to restore their partnership.
