Online Reporter
PREMIER African Resources has prepared approximately US$13,4 million six – month interim budget covering February to July 2026 to fund critical operations at its Zulu Lithium project near Bulawayo.
This comes as the company is in a highly precarious financial position, characterised by significant debt, operational pauses and a reliance on shareholder, creditor and partner support to continue as a going concern.
Premier is addressing this through extensive, ongoing equity fundraising, debt restructuring and technical, operational changes to the processing plant.
The London – listed firm contracted its most significant debt, about US$46 million, to Canmax Technologies (Canmax) primarily following a prepayment agreement in 2023 designed to fund the construction and commissioning of the Zulu Lithium and Tantalum project in Zimbabwe.
Premier failed to meet its production targets, specifically failing to deliver a minimum of 1 000 tonnes of lithium spodumene per month in November and December 2023. This constituted a breach of the offtake agreement.
Following the default, Canmax invoked rights that increased the interest rate on the outstanding balance to 12 percent per annum.
To manage this debt, the companies amended the agreement, allowing Canmax to receive 25 percent to 50 percent of gross sale proceeds from lithium shipments.
The parties also agreed to convert accrued interest into equity (shares) in Premier, which has resulted in Canmax becoming a major shareholder (approximately 13,38 percent stake.
The Zulu lithium and tantalum project aligns with Zimbabwe’s efforts to become a major player in the global electric vehicle battery supply chain.
Zimbabwe’s lithium exports are highly significant, positioning the country as Africa’s top producer and a top-10 global supplier, with major investments from China boosting output.
Mining is the largest foreign currency earner for the southern African nation and accounts for 12-15 percent of gross domestic product.
Premier’s near-term funding requirements are focused on plant completion, commissioning and optimisation (US$0,8 million), operational suppliers and critical services (US$4,4 million), staff costs and statutory obligations (US$3,3 million), and legacy and long-standing payables of approximately US$4,9 million.
“These categories represent an aggregate near-term funding requirement of approximately US$13,4 million, based on current estimates and subject to refinement as commissioning progresses and operational conditions evolve.
“The proposed application of funds includes provision for a test-run period. The budget does not assume that there will be any operating revenues during the commissioning and optimisation phase and certain supplier payment arrangements do not require immediate settlement of all outstanding amounts,” the firm said in a statement to shareholders.
Premier is developing the Zulu Lithium project, potentially the largest undeveloped lithium-bearing pegmatite (igneous) in Zimbabwe, at a time when the country is positioning itself as a key global lithium supplier driven by demand for electric vehicles and renewable energy storage solutions.
Premier will seek shareholder approval at a forthcoming annual general meeting to issue up to thirty-five billion ordinary shares and to authorise the directors of the company to issue, or grant any right to subscribe for or convert any security into, shares in accordance with the provisions of this resolution.
Conditional on the approval of the first resolution, Premier will also seek approval to issue or grant the right to subscribe for or convert any security into a further five billion ordinary shares and to authorise the directors to issue such number of shares in favour of Canmax in accordance with their conversion rights as notified on 24 December 2024.
