Premier African Minerals' revised production schedule for Zulu following the amended and restated prepayment agreement are encouraging developments, according to house broker Shore Capital.
Firstly, the working relationship between Premier and Canmax has been restored and the miner can now focus on the optimisation of the Zulu plant.
“It’s not surprising to us that there have been teething problems given the relatively short time frame from construction to commissioning.
“While the delays are frustrating, the commissioning phase has shown Zulu’s potential to produce SC6 [lithium concentrate],” said ShoreCap.
“As such, we now look forward to the first concentrate shipment now scheduled for November.
“We also highlight the revised pricing agreement where Premier, unlike most of its peers, could benefit from the value-added production of lithium hydroxide. “
Shore added that while SC6 (6% Li2O) prices in China have come off recent highs we expect prices to be well supported at these levels as increased global lithium demand is driven by the production of electric vehicles.
Shares fell 4% to 0.51p.