Premier African Minerals (AIM: PREM) shares plunged more than 27% to around 0.1p on Friday after the company unveiled proposals that could see tens of billions of new shares issued to fund its Zulu lithium project and meet outstanding obligations.
Premier has called a general meeting for 23 September, where shareholders will be asked to approve authority to issue up to 58.63 billion new ordinary shares in support of the operational and funding programme for the Zulu Lithium and Tantalum Project in Zimbabwe.
The company estimates it requires US$19.1 million of funding through to the end of 2027.
Based on an assumed issue price of 0.016p, the initial proposed share authority would provide capacity to raise approximately US$12.7 million.
Premier is also seeking authority to issue a further 5.40 billion shares to settle 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 permit the issue of up to 8.57 billion shares to Canmax Technologies under existing conversion rights.
The proposals therefore create authority for potentially more than 72 billion shares across the three categories, although approval would not necessarily mean that all of those shares are ultimately issued.
Premier currently has more than 50 billion shares in issue and is proposing another 10-for-one share consolidation in an attempt to reduce the company’s exceptionally large share count.
The company warned that its available funds are limited and that additional financing is required to meet its obligations and continue development at Zulu.
Failure to secure sufficient funding could have a material impact on both the Zulu project and Premier’s wider financial position.
