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  • Writer's pictureMark Watson-Mitchell

Premier African Metals – interesting £1.7m loan agreement by George Roach to fund working capital


Premier African Minerals (LON:PREM) has today announced that George Roach, its CEO, is granting the company an unsecured £1.7m loan facility.


To be drawn down in two stages, the first being for £1m, the balance £0.7m, both repayable six months from their drawdown.


Roach, who has some 7.13% of the group’s equity, will sell shares in the company in the market to fund the loan.


The company then will repay Roach in new shares upon the repayment date, with the number of shares being equal to the loan amount being divided by the price that his shares were sold for in the market, after being adjusted for broker fees.


Essentially, Roach, will be reissued the number of shares that will be sold in the market to raise loan funds.


Just what that will do to the group’s share price is the big question?


Canmax Dispute


The group is currently in a confrontational process with 13.14% shareholder Canmax, to whom Premier was supposed to deliver 48,000 metric tonnes of lithium concentrate per year under an ‘offtake’ deal.


The company has suffered delay at its recently assembled plant.


Failure to resolve this dispute threatens the future of the group’s operations.


This has meant that the group’s working capital has been stretched while the matter is somehow settled.


Conclusion – taking careful handling


The £107m capitalised group’s shares are currently holding fairly steady at around the 0.45p trading level.


It will be up to the group’s brokers to help to maintain an orderly market, especially if it is placing off Roach’s shares to fund the loan.

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