Premier African Minerals says it may move its Zimbabwe lithium assets into early production to take advantage of rising demand for the metal.
The London-listed company holds the Zulu lithium claims at Fort Rixon, near Bulawayo, where it has so far done 18,000 metres of exploration drilling to confirm a resource many in the industry believe is one of the largest in the country.
CEO George Roach says based on test work done on the asset, the company could build a plant by the first quarter of 2023, earlier than initially planned, to ride the lithium price wave. A “large-scale pilot plant” could be set up to produce a spodumene concentrate only and stockpile petalite for future processing.
“Based on this plan, it is possible that such a plant could be in production in Q1 2023, funded under an interest-free prepurchase payment for spodumene concentrate to be supplied,” Roach said on Monday.
Usually, companies use results from a definitive feasibility study, which details the resources there are and how profitable the mine would be, to raise money from investors. But Premier is instead betting on finding a buyer ready to pay for the concentrate before it is produced, in order to fund the cost of development.
“I remind shareholders that Premier is potentially following an accelerated programme of early production to exploit the current opportunity. There are identified risks and abatements inherent in this to a greater extent than may be the case following a fully developed DFS. However, the potential immediate availability of prepurchase payment and existing Spodumene price and demand are important and strong motivators in potentially pursuing this option,” Roach said.
Premier African Minerals is one of several foreign companies – mostly British and Chinese – that are racing to invest in Zimbabwean lithium to lock in supplies the metal, which is in demand from battery manufacturers.
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