Premier African Minerals Limited (AIM: PREM) provides a further update on progress at Zulu Lithium and Tantalum Project (“Zulu”).
Key Updates:
- Plant provider has recommended staged approach to optimisation.
- First Spodumene (SC6) shipments now scheduled for June 2023.
- Final optimisation now expected in Quarter 4 of 2023 following plant modifications.
- Production from Spodumene float circuit expected to increase by 25% after final optimisation.
- Mining operations continue to confirm resource model.
The mining operations keep on validating the resource model.
George Roach, the CEO, stated, “The processing plant is fully operational and able to produce concentrate. The Plant Supplier has informed us that the milling and sizing section of the plant needs specific minor modifications for complete optimisation of the design capacity throughput. They have shared detailed plans and timelines for these adjustments. Following the completion of this work, they predict the concentrate production to be 1,376 tons by 30 June 2023, 1,137 tons/month for July and August, then increasing to 2,359 tons in September, 3,577 tons in October 2023, and 4,471 tons from 1 December 2023.
Given the current concentrate prices and production levels until the end of August, we anticipate Zulu to operate profitably.
The adjustments comprise screening upgrade, mill relocation, and the addition of cyclones to dispatch accurately sized material to the flotation plant. Premier understands the plant supplier will cover the costs of these modifications, and we will collaborate with them to ensure the plant reaches its designated throughput swiftly.
As reported on 29 March 2023, Premier’s obligation to Canmax Technologies Co., Ltd. (“Canmax”) is to ship the initial product by 30 May 2023 (which won’t be met now), otherwise CanMax has the right to terminate the Marketing and Pre-Payment Agreement and demand settlement of the prepayment plus interest within 90 days of notice. We continue to have positive interactions with Canmax, who have always been supportive, and are looking forward to our first shipment in June 2023.
Despite the frustration over the full production schedule for the plant, we are optimistic about our increasing trust in our resource and mining operations, the near completion of our dam and tailings facility, and the performance of the crushing, sorting, and flotation sections of the plant.
The Company previously disclosed that the delays had strained our cash reserves. However, the recent exercise of options and the issue of remaining shares free from preemptive rights through direct placement have provided temporary relief. If there are further significant shipment delays, we may need to explore additional funding options.”
