Premier African Minerals Ltd (AIM:PREM, OTC:PRMMF) shares dropped more than 27% to 0.1p on Friday after the company outlined plans to seek authority to issue tens of billions of new shares as it looks to fund the Zulu lithium project and strengthen its balance sheet.
Premier called a general meeting for 23 September, where shareholders will vote on proposals including authority to issue up to 58.63 billion ordinary shares to support the operational and funding plan for its Zulu Lithium and Tantalum Project in Zimbabwe.
A further 5.40 billion shares could be issued to settle outstanding creditor obligations, including approximately US$880,000 owed to J R Goddard Contracting and US$289,064 owed to China Zenith Capital.
Another resolution would authorise up to 8.57 billion shares for Canmax Technologies under existing conversion rights.
Premier's current financial forecast identifies a funding requirement of around $19.1 million through to the end of 2027, with the proposed initial share authority providing capacity to raise approximately $12.7 million based on a 0.016p share price.
Shareholders will also be asked to approve a further 10-for-one share consolidation, aimed at reducing the company's more than 50 billion shares currently in issue.
Premier cautioned that it has limited funds and needs additional financing to meet its obligations, warning that failure to secure funding could materially affect both Zulu and the group's financial position.
