London-listed resources outfit Premier African Minerals has received US$18.1 million from its Chinese Suzhou TA&A Ultra Clean Technology.
The money is part of the marketing and prepayment agreement which the two parties entered into in June this year.
Under the agreement, Suzhou TA&A agreed to purchase, in advance, spodumene concentrate six (SC6) worth US$34.6 million from Premier to enable the construction and commissioning of a large-scale pilot plant at the Zulu lithium project.
Premier is developing the Zulu lithium and tantalum projects near Bulawayo.
In a shareholder update issued on Friday, George Roach, Premier’s chief executive officer, said:
I am pleased to confirm the signing of this agreement and the receipt of funds. Fabrication, site design and construction are underway and projected commencement of commercial production is now scheduled for quarter 1 of 2023.
The prepayment is expected to be fully offset against future shipments inside of 12 months at the prevailing SC6 pricing. We have recently appointed independent project and construction management teams to assist in ensuring compliance with timelines and budgets.
At the same time, there has been an improved turnaround in assays and we expect to release significant results as they come to hand. Further updates on the construction of the pilot plant will be provided in due course.
Under the agreement, Suzhou TA&A would have the right to acquire the first three years of production of SC6, or until such time as the advance purchase amount has been offset in full or the first 50 000 tonnes have been shipped to Suzhou T&A.
The term of the agreement can be increased by a further three years, subject to the mutual agreement between the parties.