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Premier African Minerals Ltd on Monday announced it has issued a force majeure notice to Canmax Technologies Co Ltd due to issues at its Zulu lithium and tantalum project plant. A force majeure is a clause that is included in contracts to remove liability for unforeseeable and unavoidable catastrophes that interrupt the expected course of events and prevent participants from fulfilling obligations. Canmax is based in Suzhou, China and holds a 13% interest in Premier African. As a result, Premier African’s offtake and pre-payment agreement with Canmax, including those associated with delivery and any consequences associated with it, has been suspended. Shares in the Zimbabwe-focused tungsten producer dropped 31% to 0.48 pence on Monday morning in London. ‘The issues at Zulu have been acknowledged by the plant contractor to be beyond the control of Premier, and could not have been foreseen by Premier. Whilst I am deeply upset and committed to finding an equitable way forward with Canmax, that solution should strive to be fair and reasonable and in the best interests of all Premier shareholders as whole,’ said Chief Executive George Roach. Premier said that while it and Canmax continue to talk, no amendment has currently been signed regarding the offtake and prepayment agreement for the spodumene concentrate produced at the Zulu lithium and tantalum project. It added that no amendment will be signed if it contains terms currently proposed by Canmax. These terms are: the conversion of the pre-payment amount into a convertible debt instrument in the event that Zulu is unable to meet its delivery obligations under the amended agreement or the conversion of a proportionate amount of the equity of Zulu, and the sale to Canmax of all concentrate produced at Zulu at fixed prices with ‘limited ability for Premier to accommodate cost variations’. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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