Online Reporter
Nqobile Bhebhe, Zimpapers Business Hub
THE Zulu Lithium and Tantalum Project has been given additional time to resolve its funding and creditor arrangements after offtaker Canmax Technologies Co Ltd agreed to extend the project’s long-stop date to December 31, 2026.
Its development was partly financed by a US$35 million pre-funding agreement with partner Canmax Technologies.
One of several ongoing lithium projects in the country, the project will boost Zimbabwe’s mining, which provides 12-15 percent of gross domestic product and leads national export earnings.
The project positions Zimbabwe inside the global clean-energy and electric vehicle supply chain.
The latest agreement shows that project developer Premier Africa Minerals now owes more than US$104 million in combined senior and subordinated debt from its Insiza-based lithium project near Fort Rixon.
The extension gives Premier Africa Minerals and its subsidiary, Zulu Lithium Private Limited, more time to advance the project and address obligations under the amended offtake and prepayment agreement with Chinese technology company Canmax.
Under a tripartite priority and subordination agreement signed between Premier, Zulu Lithium and Canmax on September 10, 2026, Canmax’s outstanding senior indebtedness stood at approximately US$48,73 million as at that date.
This comprised about US$34,64 million in original advanced receipts and US$14,08 million in accrued interest.
At the same time, approximately US$55,75 million was owed by Zulu Lithium to Premier and other companies within the Premier Group, comprising loans, advances, inter-company balances and accrued amounts.
The agreement places the Premier Group debt behind Canmax’s claims, meaning the subordinated indebtedness cannot be repaid, enforced or otherwise satisfied without Canmax’s prior written consent while the senior indebtedness remains outstanding.
The arrangement provides an important window for the parties to pursue a longer-term solution for Zulu, whose development has been closely linked to the financing and offtake arrangements with Canmax.
Premier said the terms of the amended agreement otherwise remained substantially unchanged, while the security package previously granted in favour of Canmax would remain in full force.
Premier managing director Mr Graham Hill said the extension provided additional certainty as the company continued working towards a long-term resolution.
“We are grateful for Canmax’s continued support and constructive engagement with Premier and Zulu. The extension of the Long Stop Date to 31 December 2026 provides additional time and certainty as we continue to progress Zulu and work towards an appropriate long-term resolution of the existing arrangements with Canmax,” he said.
“The Subordination Agreement provides clarity as to the respective creditor positions between Canmax, Premier and Zulu Lithium while preserving Premier’s underlying claims against Zulu Lithium.
“We believe the combination of the extended Long Stop Date and continued support of our principal creditor provides an appropriate framework within which Premier can continue to advance Zulu.”
Under the new arrangement, Canmax remains the senior creditor while all existing and future amounts owed by Zulu Lithium to Premier or other Premier Group companies rank behind the Canmax debt.
The subordinated debt has not been written off, released or waived and can continue to accrue and be recorded as owing.
Premier Group companies may also continue to provide funding to Zulu Lithium, although any such funding would have to be subordinated to Canmax’s senior indebtedness.
However, Premier is not obliged to provide further financial support.
The subordination will remain in place until Canmax’s senior indebtedness has been irrevocably discharged in full or otherwise settled, refinanced, restructured or discharged in a manner that leaves Premier and Zulu Lithium with no further liability to Canmax.
The agreement does not create new security over the assets of Premier, Zulu Lithium or other Premier Group companies, but establishes contractual priority between existing and future creditor claims.
The development is significant for the Zimbabwean lithium project because the financing arrangements with Canmax have been central to efforts to progress Zulu.
The original offtake and prepayment agreement was entered into in August 2023 and subsequently amended, with the latest extension moving the long-stop date to the end of 2026.
Canmax is also a shareholder in Premier, holding more than 10 percent of the company’s issued ordinary share capital, making it a related party under the AIM Rules for Companies.
Consequently, the subordination agreement constituted a related-party transaction and was considered by Premier’s directors in consultation with the company’s nominated adviser, Beaumont Cornish.
The directors said that the terms were fair and reasonable to shareholders.
In reaching that assessment, the company said Canmax’s position as Premier’s principal secured creditor and strategic partner in Zulu, as well as its continued support for the project, were important considerations.
The directors also noted that the extension gives Premier and Zulu additional time to advance the project and address amounts owed to Canmax without the consequences that could otherwise arise from expiry of the previous long-stop date.
Premier said its underlying claims against Zulu Lithium remained intact despite the subordination arrangements.
The latest agreement therefore gives the project additional time to address its existing financial obligations while retaining the possibility of further funding to support its operations.
The company said the benefits of the long-stop extension and Canmax’s continued support outweighed the restrictions created by the subordination arrangements.
The December 31 deadline now provides the next major milestone for the parties as they work towards a longer-term resolution of the financial and commercial arrangements underpinning Zulu.
