What is prem / Zulu worth28 Dec 2021 18:49
All things considered guys I’m in little doubt we’re about to witness a step change in Prems fortune and hopefully its SP shortly.
I believe the step change will come as a result of entering into a jv agreement with a suitable partner on Zulu's lithium. There are a number of unmistakable indicators telling us it’s likely once DD has been completed.
To be clear I believe the agreement will be on just the old license area which is currently the subject of the DFS and not on other areas. Well not yet anyway, I’m sure GR will want to “keep his powder dry” on those pending further exploration and analysis. Viz;-
George Roach Prems CEO is quoted as reporting to the markets on 14th December 2021.
“I have made reference to a number of ongoing negotiations intended to secure funding for the balance of the DFS underway at Zulu, against a small disposal of a direct interest in the project and assurance of mine build and off-take finance. Due diligence is being undertaken by more than one capable potential off-take partner.
As much as Premier is under due diligence, so too are those seeking to conclude an off-take agreement with us. Although progress is good in my CV, there is no certainty of outcome until final agreements are concluded and that is not the case at this time."
Looking at similar agreements recently entered into in the space I'm taking from GR’s statement that we're going to be hearing about a jv not only to finance the rest of the DFS but also to build the follow-on mine all in exchange for a % of it.
I see the finance for the rest of the DFS as slightly irrelevant as it’s likely to be just a cash down payment of the overall deal. I can see an overall jv being done on a 50/50 basis.
Given the small placing and the likelihood that some payments may now be called for on Pro-forma is just one indication that Prem is on the cusp of entering into such an agreement.
If I’m right the agreement will be transformational for Prem. Not just in financial terms but more importantly in terms of leadership, experience and skills.
The market is sure to see there’s a very significant likelihood that a mine will be built and the jv having the skills and the wherewithal to build it! It will also be seen that it puts Prem in a position that it shouldn't need to keep coming to the market to raise cash anywhere near as often as it has if ever at all.
As I say, the DFS currently being carried out is confined to what was the original licensed area before the Exclusive Prospecting Order was granted. That area is 350 hectares.
By granting the EPO earlier this year Prem was awarded a much larger area under a new license. The new area encompasses the original. But it is over 57 times larger. It measures a staggering 20,200 hectares which is over 85 square miles. Or as previously pointed out the equivalent of 20,000 rugby pitches!
To my mind the original area compared to the new one is akin to just one square on a chess boar
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