REG - Premier African Min. - Offtake and Prepayment Agreement

Premier African MineralsAnnouncement

24/12/2024 12:30

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RNS Number : 3219R  Premier African Minerals Limited  24 December 2024

24 December 2024

Premier African Minerals Limited

Offtake and Prepayment Agreement

 

Premier African Minerals Limited ("Premier" or the "Company") is pleased to
announce that Premier and Canmax Technologies Co., Ltd. ("Canmax") (together
the "Parties") have reached agreement on certain  amendments to the restated
Offtake and Prepayment Agreement which the parties had previously agreed
in August 2023 ("Amended Agreement") in respect of the Zulu Lithium and
Tantalum Project ("Zulu") and which resets the strategic relationship between
Premier and Canmax.

George Roach, CEO commented, "The support the Company has received from our
shareholders will allow completion of the spodumene float commissioning and
the installation of an alternative set of floatation cells which we expect
will meet our objective to produce and deliver spodumene at grade and meet
recovery targets.

Our focus will be centred on making Zulu deliver".

Addendum to Offtake and Prepayment Agreement

The Amended Agreement reaffirms the working arrangements between Premier and
Canmax.

The Amended Agreement remains the same as the Restated Offtake and Prepayment
Agreement which the parties had previously agreed in August 2023 ("Prepayment
Agreement"), save that that the Parties have agreed to adjust the settlement
options for Canmax in respect of prepayment amounts (plus interest) which
remaining outstanding on 1 April 2025 ("Offtake Agreement Settlement") and
provide security under the Prepayment Agreement ("Security").

Offtake Agreement Settlement

 

Premier and Canmax have agreed that in respect of any prepayment amount plus
interest which remains outstanding on 1 April 2025, and in the event that
Premier has not delivered the required product or provided cash settlement to
settle the prepayment amount plus interest, then Canmax will be entitled to
receive, as settlement of the outstanding prepayment amount plus interest, a
direct interest in Zulu Lithium based on a project valuation of US$100 million
which more accurately reflects the capital investment in Zulu to date.
Alternatively, Canmax can elect to accept settlement in new Premier ordinary
shares to be issued at the twenty-day volume-weighted average of the Premier
ordinary share price prior to the settlement date.

Security

In reflection of the delay to production and supply of product under the
Prepayment Agreement, Premier has agreed to provide Canmax with an extension
of their existing security by providing a fixed charge over the shares of Zulu
Lithium (but with no security over Premier's other assets or projects).

Conversion of interest

The initial agreements with Canmax envisaged a right to participate in Premier
fund raisings to enable Canmax to maintain its interest in Premier. The
Parties have therefore further agreed that Canmax, at its absolute discretion,
will have the right to receive partial repayment of interest owed by the
issuance of new ordinary shares in the Company, such that Canmax would hold
13.38% of the shares in issue of the Company on a fully diluted basis
immediately following the funding. In addition, while sums remain outstanding
and due to Canmax under the terms of the Prepayment Agreement, the Company has
agreed that it will not, without the prior written consent of Canmax (such
consent to not be unreasonably withheld or delayed) undertake further funding
without first offering to Canmax the ability to participate on identical terms
through the conversion of any amounts owed under the Prepayment Agreement so
to maintain Canmax holding of 13.38% in the Company on a fully diluted basis.

Related Party

Canmax is currently interested in more than 10 per cent. of the issued
ordinary share capital of the Company, and the Amended Prepayment Agreement,
security and conversion rights (together the "Transaction") is a related party
transaction for the purposes of Rule 13 of the AIM Rules. The Transaction has
been considered by the Independent Directors (being the Board other than a
board representative from Canmax). The Independent Directors of the Company
consider, having consulted with the Company's nominated adviser, Beaumont
Cornish, that the terms of the Transaction are fair and reasonable insofar as
Shareholders are concerned. The Independent Directors have in particular
taken into account that:

 

 i.            As previously notified in the announcement dated 4 December 2024
               ("Announcement"), the Company has significant creditors which require
               immediate settlement;

 ii.           Following approval of the resolution at the General Meeting on 23 December
               2024 with the support of Canmax, Premier is expected to have sufficient
               available share authorities to enable it to raise the required capital as
               detailed in the Announcement;

 iii.          There are no other sources of immediately available alternative funding on
               more advantageous terms for shareholders or in the timescale required;

 iv.           As previously reported, if the Company had been unable to secure the
               shareholder authority to obtain additional finance for the Group's working
               capital requirements through an issue of equity, there would have been a
               material uncertainty as to the ability of the Group to continue as a going
               concern; and

 v.            Canmax is the Company's principal creditor and funding partner in Zulu and its
               ongoing support of Premier and Zulu is critical to the future success of
               Premier.

The Independent Directors have further taken into account in relation to the
amended conversion rights, that Premier's Articles of Association incorporate
customary provisions and protections similar to those of the Takeover Code,
including the prohibition on any party acquiring an interest in shares
carrying 30 per cent. or more of Premier unless the Board consents to the
acquisition, or an offer is made in accordance with Rule 9 of the Takeover
Code (as if it so applied). The conversion price will be determined by the
20-day volume weighted average Premier ordinary share price at the relevant
time should Canmax elect to convert any amount owing under the Prepayment
Agreement into new ordinary shares in Premier (which shareholders should note
may result in significant dilution to them).

The Board also noted that Canmax, which has been granted the participation
right to maintain its interest in the Company at 13.38% through the
capitalisation of interest or the principal owed under the Prepayment
Agreement and the right to participate on identical terms , is listed on the
Shenzhen Stock Exchange under the ticker 300390 with a market capitalisation
of ¥ 20.7Billion (US$2.6 billion) and has a track record of providing
substantial shareholder support.

Market Abuse Regulation

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. The person who arranged the release of
this announcement on behalf of the Company was Godfrey Manhambara.

 

A copy of this announcement is available at the Company's website,
www.premierafrican (http://www.premierafrican) minerals .com

 

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

 

Beaumont Cornish Limited, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting as nominated adviser to
the Company in relation to the matters referred herein. Beaumont Cornish
Limited is acting exclusively for the Company and for no one else in relation
to the matters described in this announcement and is not advising any other
person and accordingly will not be responsible to anyone other than the
Company for providing the protections afforded to clients of Beaumont Cornish
Limited, or for providing advice in relation to the contents of this
announcement or any matter referred to in it.

 

Forward Looking Statements:

Certain statements in this announcement 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.

 

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.

 
Ends

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