Harare –Premier African Minerals Ltd shares dropped on Monday after it said it has not been able to reach final terms with Cadence Minerals PLC to fund the definitive feasibility study of the Zulu lithium and tantalum project.
Shares in the mining company fell 21 percent at 0.14 pence, while Cadence Minerals shares were down 4.1 percent at 0.18p on Monday.
In June 2018 Cadence Minerals announced it had entered into a conditional Heads of Terms with Premier African Minerals to earn up to 30 percent directly into the Zulu Lithium and Tantalum Project in Zimbabwe.
The deal was that the investment will fund the definitive feasibility study of the project, where a scoping study revealed a lithium concentrate net present value (NPV) of $127 million and lithium carbonate NPV of $718 million.
Before finalising the deal, Cadence wanted to carry out its due diligence on Zulu but the recent elections in Zimbabwe caused some “unexpected interruptions” so Premier granted Cadence an extra 20 days to cast its eye over the project.
The due diligence period ran until September 14.
In a statement Cadence Minerals said it completed its due diligence, however, it was unable to reach final terms with Premier.
“Cadence is continuing to review several upstream mineral assets, where we see the potential to deliver shareholder value by investing in projects that have a short development timeline to cash flow.
“Its intent is to earn in at a project level basis, and we are focused on assets where we can both hold larger stakes and also utilise our considerable mining and financial management expertise to achieve a high level of returns.”
In a statement on its website Premier said, “…….. it has been unable to reach final terms with Cadence Minerals plc to fully fund the Definitive Feasibility Study of the Zulu Lithium and Tantalum Project ("Zulu Lithium Project") as announced on 27 June 2018.
“The Company will provide a further update on alternative strategies for the development of the Zulu Lithium Project in the coming weeks.”
Premier African Minerals Limited (AIM: PREM) is a multi-commodity mining and natural resource development company focused on Southern Africa with its RHA project in Zimbabwe.
The Company has a diverse portfolio of projects, which include tungsten, rare earth elements, lithium and tantalum in Zimbabwe, encompassing brownfield projects with near-term production potential to grass-roots exploration.
In addition, the Company holds 5,010,333 shares in Circum Minerals Limited ("Circum"), the owners of the Danakil Potash Project in Ethiopia, which has the potential to be a world class asset. Premier also has an interest in Arc Minerals that has a number of mineral assets in Europe and Africa.
Cadence Minerals Plc engages in the exploration and development of mineral properties.
The firm involves in the identification, investment and development of Lithium and rare earth assets.
Its project portfolio includes Sonora Lithium, Auroch Minerals, Yangibana Rare Earth, Cinovec Lithium, Greenland Rare Earth, and Macarthur Minerals Lithium.
The company was founded on September 17, 2004 and is headquartered in London, the United Kingdom.
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