MTHANDAZO NYONI LONDON-listed resources outfit Premier African Minerals has received US$18,1 million from Suzhou TA&A Ultra Clean Technology, as part of the marketing and prepayment agreement, which the two parties entered into in June this year.
Under the agreement, clean technology developer Suzhou TA&A agreed to purchase, in advance, spodumene concentrate six (SC6) worth US$34,6 million from Premier to enable the construction and commissioning of a large-scale pilot plant at the Zulu lithium project.
Premier, which is developing the Zulu lithium and tantalum projects near Bulawayo, announced yesterday that it had signed definitive transaction documents in respect of the agreement and was in receipt of approximately US$18,1 million of the prepayment required to have been paid to date.
“I am pleased to confirm the signing of this agreement and the receipt of funds. Fabrication, site design and construction are underway and projected commencement of commercial production is now scheduled for quarter 1 of 2023,” George Roach, Premier chief executive officer, said in a shareholder update.
“The prepayment is expected to be fully offset against future shipments inside of 12 months at the prevailing SC6 pricing. We have recently appointed independent project and construction management teams to assist in ensuring compliance with timelines and budgets.
“At the same time, there has been an improved turn around in assays and we expect to release significant results as they come to hand. Further updates on the construction of the pilot plant will be provided in due course.”
Premier said the pilot plant would utilise state-of-the-art sensor-based ore sorting technologies to facilitate the separation of run-of-mine material into components. This will likely increase available capacity in the flotation recovery circuits, where lithium minerals are recovered.
The company said the ultimate production and recoveries were a factor of many variables, and that the pilot plant was likely to assist in dealing with these variables owing to the inherent flexibility of the use of multiple ore sorters.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
Moreover, stockpiles of tantalum, petalite and mica or lepidolite-rich material would facilitate further test work and flow sheet development to ensure that this material was true inventory for later profitable recovery.
The pilot plant will have a nameplate throughput of up to 190 tonnes per hour, however, it is planned to run at a more conservative 140 tonnes per hour at inception. At this rate, and based on a three-year life of the pilot plant operations — excluding plant upgrades, tantalum recovery, petalite production and any other revenue — a series of sensitivities indicated a robust project and an assurance that Premier would become cash generative from the time of first shipment.
Under the agreement, Suzhou TA&A would have the right to acquire the first three years of production of SC6, or until such time as the advance purchase amount has been offset in full or the first 50 000 tonnes have been shipped to Suzhou T&A.
The term of the agreement can be increased by a further three years, subject to the mutual agreement between the parties.
The sale of SC6 will be priced at a discount conditional on the approval of the Minerals Marketing Corporation of Zimbabwe on the first 50 000 tonnes of SC6 shipped or until the advance purchase amount has been fully offset.
Following completion of first delivery, the parties will agree to negotiate a discount based on market conditions for the remaining term. The purchase price will be subject to a floor price until such time as either the advance purchase amount has been fully offset or December 31, 2023.
The purchase price is also subject to target product specifications, with industry standard adjustment for variations.
- Follow us on Twitter @NewsDayZimbabwe
