London-listed Premier African Minerals has reported a retail offer through a bookbuild of new ordinary shares of no par value each in the capital of the company at an issue price of 0.0275 p each to raise gross proceeds – before fees and expenses – of up to £2.3-million.

In addition to the retail offer, the company conducted a placing of new ordinary shares at the issue price to raise gross proceeds of £1.2-million.

The company notes that a separate announcement has been made regarding the placing and its terms and, to avoid doubt, explains that the retail offer is not part of the placing.

The issue price represents a discount of about 30% to the closing mid-market price on January 15.

Premier says the retail offer is conditional on the new ordinary shares to be issued pursuant to the retail offer being admitted to trading on the LSE’s Aim market.

Completion of each of the placing and retail offer is inter-conditional upon, inter alia, the gross proceeds of the fundraising, taken together with the value of liabilities that creditors agree to settle by accepting new shares, on the same terms as to price as the placing, being not materially less than £3.5-million.

Accordingly, should the gross proceeds of the fundraising, together the value of settlement shares issued at the issue price, be materially less than £3.5-million, the placing and retail offer will not proceed.

The company says the net proceeds of the fundraising are sufficient to start the final commissioning and optimisation of the primary flotation plant and to buy a secondary flotation plant, which the board believes will underpin the full restart of operations at the Zulu lithium and tantalum project, in Zimbabwe,  as well as to address those trade creditors that require immediate full or partial settlement in order to support the initial three-to-five-day test run.

Proceeds will also be allocated towards part payment to Zimbabwe government in respect of deferred value added tax and other statutory requirements of $250 000; part payment in respect of arrears of salaries and wages to employees of $400 000; and part payment to specific suppliers of plant spares and maintenance of $180 000.

Premier says any remaining balance will be used in part payments to contractors and other creditors to enable ongoing commercial operations.

Negotiations regarding certain creditors of the company and Zulu accepting new shares of the company in settlement in full or part settlement of the liabilities owing to them have been taking place for several weeks.

It is expected that agreement will be reached with certain of these parties once the terms of the placing are notified to them.