28th May 2019 16:32
LONDON (Alliance News) - Premier African Minerals Ltd on Tuesday said it has terminated discussions with KME Plant Hire Proprietary Ltd over the Zulu lithium project in Zimbabwe.
Premier African will now "urgently reopen previous discussions" with its former Zulu drill contractor to recommence drilling, believing the previous contractor to be most familiar with the project.
KME and Premier were "unable to conclude a revised pricing structure for the long form drilling contract" at Zulu in a way that satisfied both parties. The KME drill programme will not continue and discussions have been brought to an end.
Premier African had previously issued 212.4 million shares at a price of 0.145 pence each to KME as pre-payment. These shares were admitted to trading but not yet released to KME's control, pending a drill contract.
Given a contract will not materialise, all 212.4 million KME shares have been cancelled and Premier African has applied to AIM to cancel the shares, which is expected to occur on or near Tuesday next week.
Furthermore, Premier African added it has been in contact with the office of the Ministry of Mines and has been assured that it will have feedback on the long outstanding exclusive prospecting order application for areas surrounding Zulu.
"The company believes that the granting of this EPO will add significantly to Zulu and may assist in progressing discussions on alternative finance to progress the definitive feasibility study programme so as to minimise the requirement for Premier to raise funds directly," the firm added.
Additionally, the company said it has also been in constant contact with the Zimbabwe Ministry of Industry, Commerce and Enterprise Development who controls and operates National Indigenization and Economic Empowerment Fund of Zimbabwe (NIEEF).
The company's agreement with NIEEF in respect of RHA Tungsten, has a binding provision for NIEEF to provide financing of USD6 million. To date NIEEF has not provided the funds, Premier African explained.
"While Premier remains confident that the NIEEF will comply with their obligations, Premier has agreed to entertain a direct approach from a potential alternative buyer of wolframite and to facilitate a due diligence process by two other development finance institutions who have concluded confidentiality agreements with Premier," it concluded.
Premier African Minerals shares closed 1.4% lower on Tuesday at 0.084 pence each.
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