Addendum to offtake agreement between Premier and Canmax under negotiation
The offtake and prepayment agreement entered into previously between Premier African Minerals and Canmax Technologies – formerly known as Suzhou TA&A Ultra Clean Technology – might be off the table if an addendum to the original agreement is not entered into before June 25.
In accordance with the terms of the agreement entered into on August 3 last year, Premier was required to supply product by May 30. Canmax now has the right to terminate the agreement, whereupon Premier will need to enact repayment of the prepayment amount plus interest in full within 90 days.
Moreover, Premier has been accruing interest at 3.5% a year – subject to adjustment from time to time in accordance with the loan prime rate as published by the People's Bank of China – which will also be owed to Canmax.
Premier said on June 6, however, that it is in advanced discussions with Canmax pertaining to an addendum to the agreement.
This addendum will allow for an adjustment in the pricing mechanism, whereby both parties will equally share in the gross revenue from the sale of lithium hydroxide produced from spodumene supplied by Premier, after deduction of the production costs of both parties.
It will also allow for the further prepurchase of spodumene by Canmax from the Zulu lithium project, in Zimbabwe, to assist with ongoing operational costs associated with the revised timelines and expected production figures.
“I am deeply appreciative for the constructive discussion, further assistance, and confirmation of our relationship with Canmax,” Premier CEO George Roach said.
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