It seems you blink and miss it with Premier African Minerals LON:PREM. Well, you miss another market update. Since we last visited the BVI-headquartered miner and its Zulu Lithium and Tantalum Project in Zimbabwe in February, the PAM newsroom has been busy updating the market on every stage of the tortuous process of getting its new mine up and running.
The company’s objective at the start of the year was to get the Zulu plant up and running by end-February 2024, but as George Roach, CEO, said, things were held up by: “by a number of system and control issues […] interrupting operations,” which he described as minor issues.
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As February closed, Premier said that the Zulu plant was running and mica and spodumene was being produced at the plant’s floatation units, but it then became an issue of quality and quantity, with pH monitoring not working properly, as Roach said the company was getting there, But “[…] not as quickly as [the company] had hoped and with more unnecessary remedial issues than [it] had anticipated.”
CEO “encouraged and frustrated”
However, the company still backed its spot analysis from its onsite lab that the spodumene retrieved to date had a 6.1% lithium concentration. But the delays had left Roach: “[…] simultaneously encouraged and frustrated.” Given that Premier fired its engineering partner, Stark International (not the fictitious Marvel one, I think) and took over running of the engineering itself, one would have hoped that it would be able to expedite the plant fixes. Not so.
But by April PAM’s team with help from OEMs (original equipment manufacturers) including Enprotect said it had: “identified both the cause and the remedy” and was adjusting its floatation cells. By May it had fixed the issues. But then the miner had to deal with issues with its ore sorters, milling and screening systems, magnetic separation and tantalum recovery unit. It’s as though someone had driven a wrecking-ball through the site, destroying all in its path.
Deeply frustrated and disappointed
By the end of the month Roach was back to being: “deeply frustrated and disappointed” (as might all the new shareholders) announcing that it was stopping the newly-fixed flow circuit to add another conditioning cell to the plant.
In its annual report in June, Roach noted that Zulu was causing so many hassles for the firm that none of PAM’s other projects had progressed during the year. This included the ‘worldclass’ Ethiopian project Vortex, its Namibian manganese venture MN Holdings, and its RHA Tungsten Mine near Bulawayo, Zimbabwe, which was under care and maintenance and to wit PAM still couldn’t find a buyer, or progress Turwi Gold, a new project also in Zimbabwe. Operational losses expanded from USD5.8m to USD20.8m year-on-year.
Things were looking up by July. The problems with the flow circuit were receding and a new scrubber had been installed. By last month – August – Roach was “pleased” that he was seeing the back of the optimisation process. In his latest presser from last week, PAM announced that it was lab testing the output from Enprotect’s floatation circuit. But as always the good news came with another call for more money. Roach said: “Premier will run the plant when the laboratory work has been completed and when we have resolved the optimisation issues that have prevented proper production to date. Whilst this has reduced current expenditure, the company will still need further funding and in particular to recommence production later this month.”
No lack of funds
The management of PAM can’t complain about a lack of funds. In April it went to market for GBP2m and the next day took another GBP1m off its AIM backers. Premier is also in the process of tapping up Zimbabwean-based lenders for working capital facilities, and the project managed to secure an interim working capital facility of USD300,000 in Zimbabwe. An extended and larger term facility from potential lenders will only be potentially available once Zulu can demonstrate a steady state of production.
The salesmanship of PAM’s management is incredible. Despite a never-ending litany of problems, not moving any of its other projects forward, increased losses and cratering share price, it still remains well-backed by the market. Moreover its suppliers seem to believe the story, too. PAM paid nearly GBP3m in invoices in shares as well as clearing a liability to China Zenith Capital of GBP1.4m. All-in, Pam raised USD17.5m in new funding in its 2023, well ahead of the USD14.8m it amassed in 2022, and still runs at an increasing loss and has problems with its main project.
The world awaits the first PAM lithium delivery. PAM opened the week (16th September) at 0.0502p, 89.7% down from a year ago and down 77.3% year-to-date. PAM’s shares have ranged between 0.05p and 0.57p over a 52-week period. Premier African Minerals has a market capitalisation of GBP17.7m.
