Premier African Minerals Ltd (AIM:PREM, OTC:PRMMF) is to raise up to £3.5 million through a placing finally to get its Zulu lithium and tantalum project in Zimbabwe up and running.
If fully subscribed, Premier African added that the money would settle certain immediately due creditor payments and essential staff payments ahead of operations recommencing.
In addition, the funding would pay for a planned test run of the Zulu plant operation for a 3-to-5-day test using ore already mined and secure a 15 to 20 tph Spodumene flotation plant currently in Harare.
Priced at 0.0275p a share, a 30% discount to last night’s close, partner Canmax will subscribe to maintain its holding its 13.38% holding.
The shares to be issued will amount to 25% of the current number in issue. A separate retail offer is also underway.
George Roach, Premier’s chief executive, commented: "The future of Zulu requires successfully completing the commissioning of the plant and seeing production on a profitable basis.
“Canmax's participation in this refinancing, applying interest due to them under the Offtake and Prepayment Agreement to a subscription to maintain their interest in the company at 13.38% is a demonstration of their shared determination to get the project into commercial production.
“Likewise my own participation. I have always tried to put the company first and I intend to demonstrate my confidence in the company by subscribing at the issue price for any remaining shares available under the existing share authorities through the partial repayment of my outstanding loan which is due in cash.
“My participation comes last in line as maximising new cash into the company is the priority. If the fundraising is fully subscribed, and with the issue of new shares to Canmax, it is expected that my participation will be substantially scaled back and the balance of the loan, which remains unsecured, will be rolled over for a further 13 months.
! I hope shareholders recognise my commitment to the Company with this gesture, and that I am fully aligned with them.
“This fundraising does not resolve everything, but I believe is the start of a reset of Premier and is required to stabilise our position.”