Premier African Minerals Ltd. saw a decline in its shares on Thursday as the company acknowledged its constrained cash reserves resulting from an ongoing dispute with Canmax over the termination of a supply deal.
At 0851 GMT, shares were down by 0.07 pence or 15%, reaching 0.43 pence.
On June 28, the London-listed miner received a notice of termination for the deal related to Premier’s Zulu Lithium and Tantalum project in Zimbabwe. Canmax cited force majeure and demanded a repayment of approximately $34.7 million within 90 days. Premier, however, contested the termination grounds based on legal advice.
Both parties are currently tasked with resolving the dispute through negotiation within 10 days. If unsuccessful, the matter will be referred to arbitration in Singapore. While discussions are ongoing, no agreements have been reached thus far.
The force majeure, disclosed on June 26, is expected to persist for approximately 14 weeks.
Premier highlighted that its cash reserves continue to be constrained, further exacerbated by shareholders rejecting a resolution to disapply pre-emption rights. Nevertheless, given the escalating disagreement with Canmax, the company intends to request another special general meeting as it anticipates more shareholders will now vote in favor.
Additionally, Premier is exploring potential options for securing interim short-term funding from members of the board.