REG - Premier African Min. - Notice of GM

Premier African MineralsAnnouncement

04/12/2024 18:15

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RNS Number : 8715O  Premier African Minerals Limited  04 December 2024

4 December 2024

Premier African Minerals Limited

 

Notice of General Meeting

 

Premier African Minerals Limited ("Premier" or the "Company"), announces that
it will be holding a General Meeting ("GM") at the Cape St Francis Resort,
Gama Road, Cape St Francis, 6312, South Africa at 13:30 (GMT) on 23 December
2024.

 

The Notice of GM ("Notice") with both the Form of Instruction and Form of
Proxy are in process of being posted to shareholders and is also available
together with this announcement for download on the Company's website:

https://www.premierafricanminerals.com/investors/circulars-and-notices
(https://www.premierafricanminerals.com/investors/circulars-and-notices)

Shareholders are strongly encouraged to review the Explanatory Notes to the
resolution that is being proposed at the GM as set out in Appendix 1 of the
Notice and in the link below, and reproduced without amendment in the Appendix
to this announcement, and are strongly encouraged to vote in either person or
through the proxy of the Chairman of the meeting.

http://www.rns-pdf.londonstockexchange.com/rns/8715O_1-2024-12-4.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8715O_1-2024-12-4.pdf)

 

Webinar

The Company will also stream the Notice by a webinar that will allow direct
access to the meeting from any internet linked computer or smart device.
Shareholders can download via the link that will be provided two days before
the meeting on Premier webpage.

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR").

 

The person who arranged the release of this announcement on behalf of the
Company was George Roach.

 

Enquiries:

 

 George Roach                        Premier African Minerals Limited    Tel: +27 (0) 100 201 281
 Michael Cornish / Roland Cornish    Beaumont Cornish Limited            Tel: +44 (0) 20 7628 3396

                                     (Nominated Adviser)
 Douglas Crippen                     CMC Markets UK Plc                  Tel: +44 (0) 20 3003 8632
 Toby Gibbs/Rachel Goldstein         Shore Capital Stockbrokers Limited  Tel: +44 (0) 20 7408 4090
 Andrew Monk / Andrew Raca           VSA Capital                         Tel: +44 (0)20 3005 5000

 

Notes to Editors:

Premier African Minerals Limited (AIM: PREM) is a multi-commodity mining and
natural resource development company focused on Southern Africa with its RHA
Tungsten and Zulu Lithium projects in Zimbabwe.

 

The Company has a diverse portfolio of projects, which include tungsten, rare
earth elements, lithium and tantalum in Zimbabwe and lithium and gold in
Mozambique, encompassing brownfield projects with near-term production
potential to grass-roots exploration. The Company has accepted a share offer
by Vortex Limited ("Vortex") for the exchange of Premier's entire 4.8%
interest in Circum Minerals Limited ("Circum"), the owners of the Danakil
Potash Project in Ethiopia, for a 13.1% interest in the enlarged share capital
of Vortex. Vortex has an interest of 36.7% in Circum.

 

In addition, the Company holds a 19% interest in MN Holdings Limited, the
operator of the Otjozondu Manganese Mining Project in Namibia.

 

Nominated Adviser Statement

Beaumont Cornish Limited ("Beaumont Cornish"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is
acting as nominated adviser to the Company in connection with this
announcement and will not regard any other person as its client and will not
be responsible to anyone else for providing the protections afforded to the
clients of Beaumont Cornish or for providing advice in relation to such
proposals. Beaumont Cornish has not authorised the contents of, or any part
of, this document and no liability whatsoever is accepted by Beaumont Cornish
for the accuracy of any information, or opinions contained in this document or
for the omission of any information. Beaumont Cornish as nominated adviser to
the Company owes certain responsibilities to the London Stock Exchange which
are not owed to the Company, the Directors, Shareholders, or any other person.

 

APPENDIX

EXPLANATORY NOTES TO THE RESOLUTION

An explanation of the proposed Resolutions is set out below. Resolution 1 is
proposed as special resolution. This means that in order to have this
Resolution passed, in excess of three-fourths of the votes cast must be in
favour of the resolution.

The Board would strongly encourage all members to vote on all the proposed
Resolution below.

Resolution 1: To approve for the period commencing twenty four (24) months
following the date of this GM (Period), the disapplication of the pre-emption
provisions set out in Regulation 1.5 of the Company's articles of association
in relation to the issue of, or the grant of any right to subscribe for or
convert any security into, up to a further fifteen billion (15,000,000,000)
ordinary shares, and to authorise the Directors of the Company to issue, or
grant any right to subscribe for or convert any security into, shares in
accordance with the provisions of this resolution, but so that the Company may
make offers and enter into, agreements during the Period which would, or
might, require shares to be allotted or rights to subscribe for, or convert
other securities into shares to be granted after the Period ends.

Summary

Zulu Lithium and Tantalum Project ("Zulu")

The Company has provided various updates on the status of the Zulu plant,
these updates remain available for download at
https://premierafricanminerals.com/newsroom
(https://premierafricanminerals.com/newsroom) .  In short, the Zulu plant has
not run since July 2024 for the following reasons:

1. The current spodumene float circuit ("Spodumene Flotation Circuit") is not
fully commissioned and optimised and has not demonstrated the ability to meet
the continuous recovery of spodumene concentrate nor the expected grade, and

2. Zulu does not have funds to meet certain urgent creditor repayments, and
the money required to complete the work underway on the Primary Flotation
Circuit and accordingly reach definitive conclusions on what may possibly
still be required before target grade and recovery can be met from the Primary
Flotation Circuit. (for creditor details see below).

Since July 2024, the Company has undertaken extensive additional test work on
the Primary Flotation Circuit, both at Zulu laboratory and, by Enprotec (the
supplier of the Primary Flotation Circuit) and by Betachem (the principal
supplier of the reagents) at the independent Geolabs facility ("Independent
Reports").

The recommendations from the Independent Reports require that the Zulu plant
be run to establish definitively whether the test work results can be
replicated on the Spodumene Flotation Circuit. This will drive any decision
that may be needed to achieve grade and recovery through the Spodumene
Flotation Circuit ("Development Decision on the Current Flotation Plant"). The
Development Decision on the Current Flotation Plant will require an initial
5-day run, which will require a two-week lead time to run the Zulu plant, and
the targeted date is late December or January 2025, subject to funding.

The Development Decision on the Current Flotation Plant will deal with the
following four specific matters:

1. Reagent dosing will be managed by the Betachem team. Zulu will determine
whether the required grade and recovery can be achieved from modified dosing
and overall operating parameter management within the existing Spodumene
Flotation Circuit as installed;

2. Zulu will determine whether or not the Enprotec recommendation that cleaner
cell residence time should be reduced and whether the inserts recommended by
Enprotec to reduce the cell volume are indicated, or whether there are better
alternatives;

3. Zulu will determine whether or not the float cells as supplied have a
sufficient lip to surface area ratio to effectively cause an adequate flowrate
of froths over the lip without mechanical froth removal, and

4. Zulu will examine whether or not the Mica float section could be by-passed
completely,

collectively the "Test Parameters".

Plant Development and Two-phase Approach to Production at Zulu

Premier has on numerous occasions described the surplus capacity in the
crushing and comminution circuits. As much to attempt to accommodate some of
this surplus and to provide an alternative to the existing spodumene float
plant if the test run is unsuccessful, the Company will, subject to funding,
immediately acquire and install a 13 to 20 tph spodumene floatation plant
("Secondary Flotation Plant") currently in Harare and immediately available.
The rationale is simple, the Secondary Flotation Plant will mitigate any
unforeseen issues occurred under the Test Parameters, and essentially allow
Zulu to return to production regardless of the potential outcomes of the Test
Parameters.

The best result would be to place the plant into commercial production if the
test run is successful, and the worst outcome would likely see production
through the addition of the Secondary Flotation Circuit, from the end of
February 2025. It should be noted that the Secondary Flotation Plant uses
conventional froth recovery by mechanical scaping and Zulu ore has already
been successfully tested on similar plant.

While Premier's focus at Zulu remains principally on the Spodumene floatation
circuits, test work is also underway on wet high intensity magnetic separation
that is expected to recover tantalum and evaluation of alternative ore sorting
is nearing completion in Germany, all of which should lead to better
efficiency and overall improved profitability, but none of which prevent
production at Zulu now.

The Secondary Flotation Plant once installed is expected to see commercial
production from the time of commissioning, and while history has shown that we
all share the expectation that commercial production will follow this, there
can be no guarantee that the plant will be capable of commercial production
until such time as it can be fully commissioned and tested as referred to
above.

Use and Application of Funds

The purpose for seeking approval of the Resolution is to settle certain
immediately due creditor payments, complete the commissioning and optimisation
of both the Primary Flotation Plant and Secondary Flotation Plant to achieve
the targeted grade and recovery and provide additional working capital for the
Company.

As reported in the interim results published on 30 September 2024 ("Interim
Results"), at the reporting date of 30 June 2024, the Group's total assets
exceeded the total liabilities by $12.481 million and its current liabilities
exceeded its current assets by $47.815 million. The major component of the
current liability excess comprised the $42.8 million received from the Group's
Prepayment and Offtake Partner as an advance receipt which will be settled
from proceeds from the sale of SC6 to the Prepayment and Offtake Partner from
production at Zulu. The balance of liabilities principally comprised trade
creditors incurred by Zulu, and the proposed funding is intended to cover
these liabilities of Premier (including accruals since June 2024) until the
end of February 2025, with the planned utilisation of funds broken down into
the following essential categories:

 1.          Suppliers with a payment arrangement                                  US$3,955,000
 2.          Zulu Secondary Flotation Plant                                        US$400,000
 3.          5-day plant test run                                                  US$200,000
 4.          Zulu and Group staff accrued payment                                  US$974,000
 5.          Premier suppliers without payment arrangements but considered urgent  US$564,565
 6.          Premier suppliers without payment arrangements but less urgent        US$35,358
 7.          Critical suppliers for ongoing operations at Zulu                     US$520,145
 8.          Spares and consumables at Zulu                                        US$183,550
 9.          Zulu other outstanding creditors                                      US$114,895
 10.         Payroll and statutory deduction balances                              US$764,995

This proposed use of funds also includes a test run period and provides for
the purchase of Secondary Flotation Plant. However, the budget does not deal
with operating costs under normal production, and discussions remain ongoing
about the potential funding of the operations of Zulu. As previously reported,
internal Company estimates, which have not been independently verified,
indicate that the Secondary Flotation Plant could result in an illustrative
target mine gate production cost for spodumene concentrate of circa US$500 per
ton. Disbursements will be spread over at least the three-month period to end
February 2025.

It is important to note that Premier's key options regarding Zulu, as set out
in Interim Results all remain under review and are actively being explored.
However, Premier's Board of directors believe that the best means of both
realising and restoring shareholder value through either the possible sale of
Zulu in its entirety, securing an investment partner into Zulu via a partial
sale; or enter into a Joint Venture, all require that Zulu can demonstrate
that it can produce spodumene concentrate through either the Primary Flotation
Circuit and Secondary Flotation Circuit or ideally both.

Recommendation

The Board consider the approval of the Resolution being proposed at this GM to
be in the best interests of the Company and its Shareholders as a whole and,
accordingly, unanimously recommend Shareholders to vote in favour of the
Resolution.

Premier has limited funds and must put in place additional funding
arrangements to meet its payment commitments and obligations due at the end of
this month (i.e. December 2024). Shareholders should be aware that if the
Resolution is not passed at the GM, that Company will need to proceed with
alternative funding  arrangements, including a discounted open offer to
Shareholders, and  there is no assurance that such open offer will be taken
up or such other funding arrangements could be put in place in the timescale
required, which would potentially have a material adverse both effect on Zulu
and the Company as a whole. As previously reported, if the Company is unable
to obtain additional finance for the Group's working capital requirements, a
material uncertainty may exist which could cast significant doubt on the
ability of the Group to continue as a going concern and therefore be unable to
realise its assets and settle its liabilities in the normal course of
business.

The Board considers that it is therefore of the utmost importance that
Shareholders vote in favour of the Resolution.

Forward Looking Statements

Certain statements in this Appendix are or may be deemed to be forward looking
statements. Forward looking statements are identified by their use of terms
and phrases such as ''believe'' ''could'' "should" ''envisage'' ''estimate''
''intend'' ''may'' ''plan'' ''will'' or the negative of those variations or
comparable expressions including references to assumptions. These
forward-looking statements are not based on historical facts but rather on the
Directors' current expectations and assumptions regarding the Company's future
growth results of operations performance future capital and other expenditures
(including the amount. Nature and sources of funding thereof) competitive
advantages business prospects and opportunities. Such forward looking
statements reflect the Directors' current beliefs and assumptions and are
based on information currently available to the Directors. A number of factors
could cause actual results to differ materially from the results discussed in
the forward-looking statements including risks associated with vulnerability
to general economic and business conditions competition environmental and
other regulatory changes actions by governmental authorities the availability
of capital markets reliance on key personnel uninsured and underinsured losses
and other factors many of which are beyond the control of the Company.
Although any forward-looking statements contained in this announcement are
based upon what the Directors believe to be reasonable assumptions. The
Company cannot assure investors that actual results will be consistent with
such forward looking statements.

Ends

 

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