Explanation of Force Majeures26 Jun 2023 19:05
The latent defect in the bearing seal assembly will mean waiting until the specialist parts are available and, to this end, the Company has worked diligently with the main contractor responsible for the design and construction of the plant, Stark Resources, both to identify the issues with the plant which has caused the disruption, breakdown and failure and to ensure that the repair which is not in the ordinary course of business, can take place expeditiously. Stark has confirmed the defect and has undertaken to remedy it. In support thereof, I refer to correspondence from Stark Resources dated 23 May 2023 (the "Stark Letter"). The proposed remedy is set out by Stark Resources, as is the timeline in the Stark Letter. It is anticipated that up to 50% of required Product may become available from Late July 2023.
The remedy to the Force Majeures requires either the supply and installation of new EDS mills, or the addition of an additional conventional ball mill that is not immediately available. The specific remedies are set out in the Stark Letter, and it is expected that implementing a complete remedy is expected to require 16 weeks.
In accordance with Article 12 of the Offtake, this notice confirms that no liability for damage or delay will arise against either the Company or Zulu on account of its failure to perform its obligations under this Agreement or on account of any disruption or delay due to the Force Majeure or the consequences of it.
As the Force Majeure will likely defer or prevent future deliveries of a Parcel of Product, we look forward to discussing revisions to the Company's shipping schedule with you in due course, all as contemplated by Section 12.5 of the Offtake."
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