Premier African Minerals Limited (LON:PREM) said the meteoric rise in its share price this month has improved the prospects of retaining full ownership of the Zulu lithium project.
The junior exploration company was formally granted an exclusive prospecting order (EPO) covering the company’s Zulu Lithium and Tantalum claims on March 12 but the share price was already shifting higher in anticipation of that award and during March the shares have risen from 0.08p to 0.25p.
That, said George Roach, the chief executive officer of Premier, caused the board to rethink assumptions that at some point it would have to surrender some of its ownership of Zulu to a joint venture partner.
“With both the emerging short supply and simultaneous escalating price and demand for spodumene and the grant of the Exclusive Prospecting Order … as announced on 17 March 2021, Premier's prospects are today fundamentally different,” Roach said.
“Premier's present market value suggests that retention of 100% of Zulu is now potentially a better option. The strategy related to the divestment of our Zimbabwe assets may no longer be appropriate. Accordingly, Premier will focus on the development of Zulu and realisation of the potential true value of this asset and proper exploration of the upside potential in the EPO,” Roach told investors.
The definitive feasibility study (DFS) timeline for Zulu is estimated at 14 months and this is unlikely to change, Roach said. Since the EPO was awarded the company has received several approaches from parties interested in funding the DFS, while it has also had expressions of interest from organisations interested in investing in the project as part of an off-take agreement.
“In closing, it is worth noting that the Zimbabwean Government's award of the EPO at Zulu and several other EPO applications, is a clear signal that Zimbabwe is truly open for business and is taking steps to achieving their long-term mining goal,” Premier’s stock market announcement concluded.
Meanwhile, Premier and MH Holdings will continue their mutual interests in the operating Otjozondu Manganese Mine in Namibia.
Shares in Premier African were trading at 0.25p following the announcement, having closed last night at 0.33p.