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Highlights:
- Premier African Minerals is considering a full or partial sale of its Zulu lithium project or installing an additional flotation plant.
- The company faces significant debt and is evaluating funding options to restart operations if strategic alternatives are not realized.
- Premier reported operating losses of US$12.027 million for H1 2024, with shares down 38% following the update.
Premier African Minerals Ltd (LSE:PREM) announced that it is reviewing various strategic options to advance its Zulu lithium project in Zimbabwe. The company is evaluating the possibility of either a full or partial sale of the project, as well as exploring other alternatives to move forward. Among these options is the potential installation of an additional spodumene floatation plant, which could be funded internally while retaining ownership of the project.
Discussions have already been held with a Chinese firm experienced in building flotation plants internationally. One such plant is currently operational in Zimbabwe, processing ore similar to that found at the Zulu project. Premier revealed that an additional flotation plant is available, with an estimated cost of US$400,000, including civil and integration expenses. The timeline for installation and operation is projected to be around three months from the date of order.
However, Premier acknowledged that the Zulu project has incurred significant debt, and although some of it could potentially be restructured, restarting operations will require additional funding. The company’s board indicated that recommencing production is a viable option if ongoing discussions and alternative strategies for Zulu do not materialize.
In its latest financial update, Premier reported operating losses of US$12.027 million for the six months ending June 2024, with cash reserves of just US$0.243 million at the period's end. The company also emphasized the need to address significant creditor obligations in the near term.
Following the announcement, shares in Premier African Minerals dropped by 38%, trading at 0.03p.
